The Truth About Rising CPCs: Insights from Hundreds of UK Campaigns

If you’re running paid search ads, you’ve probably noticed that clicks aren’t as cheap as they used to be.

LOCALiQ’s latest benchmark data found that the average UK cost per click (CPC) increased by 17% year-on-year, rising from £1.72 to £2.01, with 71% of industries seeing CPC increase over the same period.

At first glance, that’s not particularly welcome news. Higher click costs can put pressure on budgets and make it more expensive to generate leads and sales. But an increase in CPC doesn’t automatically mean your campaigns are becoming less effective.

So, why are CPCs increasing, what does it mean for paid search performance, and what can businesses do about it?

• What does a higher CPC mean for UK businesses?
• Why is CPC increasing?
• What to do when your CPC rises

Rising CPC doesn’t automatically mean worse results

What does a higher CPC mean for UK businesses? Naturally, it can be easy to interpret it as bad news. If every click costs more, it can feel as though you’re getting less for your money, and, without stronger results to show for it, that can be true.

But that wasn’t the full picture we saw in our latest paid search data. While average CPC increased, click-through rates more than doubled, and conversion rates also improved. In other words, advertisers were paying more per click, but those clicks were more likely to lead to a conversion. In fact, Around 67% of industries that experienced higher CPCs in 2025 also improved their conversion rates, suggesting that higher click costs were often accompanied by more valuable traffic rather than wasted spend.

This is important because whilst CPC tells you what it costs to attract a visitor; it does not tell you whether that visitor was worth paying for. The more useful question is whether your higher click costs are being offset by stronger conversion performance, and ultimately, whether your cost per lead or sale is still sustainable.

The next question, then, is why those clicks are becoming more expensive in the first place.

Why is CPC increasing?

CPC is rising because search visibility is becoming both more valuable and harder to win.

Businesses are competing for searches that are most likely to lead to an enquiry, booking or sale. But the results page is also more crowded than it used to be. Paid ads now compete for attention alongside map listings, Shopping results, organic links, rich features and, increasingly, AI Overviews.

That does not mean AI Overviews are directly causing every CPC increase. However, they are changing the environment advertisers operate in. When Google can answer part of a search directly on the results page, some users have less reason to click through to a website. Research has found that the presence of an AI Overview can lower organic click-through rates on affected queries.

As competition for attention increases, advertisers are increasingly competing for the clicks that remain, particularly from users showing strong commercial intent.

High-intent searches attract higher bids

Not every search has the same value to a business. Someone researching a topic is different from someone searching for a local service, checking prices or looking to book.

It is those action-led searches where competition is usually strongest. When several businesses know a single new customer could be worth hundreds or thousands of pounds, they can justify bidding more to appear prominently. That is reflected in LOCALiQ’s benchmark data. Aesthetic, Solicitors, Family & Personal Services and Recruitment were among the higher-CPC industries in 2025.

A higher CPC is not automatically a positive sign. But it can reflect the commercial value of the search, rather than an inefficient campaign.

Better targeting is concentrating spend

Advertisers are also more able to focus spend on the auctions that matter most. Google’s Smart Bidding can adjust bids in real time using contextual signals including location, device, language and time of day, helping campaigns bid more competitively when a conversion appears more likely.

This helps explain the broader pattern in our data. Average CPC increased but click-through rate and conversion rate improved too. For many businesses, that suggests they were paying more for traffic that was more likely to engage and take action, not simply paying more for the same traffic.

What to do when your CPC rises

A higher CPC is not automatically a problem. The real concern is whether you are paying more without getting more in return.

Before reducing bids or cutting budget, look at what happens after the click. Are people still converting? Are enquiries turning into customers? Is your ad spend still delivering a worthwhile return? These are the questions that tell you whether higher click costs are sustainable for your business.

If your conversion rate and lead quality are holding up, a higher CPC may mean you are competing for more valuable traffic. If they are falling, it is time to look beyond the bid itself.

1. Check what the higher costs mean for your bottom line

A higher CPC is only a concern if it is eating into your bottom line.

Rather than focusing on the cost of each click, ask whether your ads are still bringing in enough enquiries, bookings or sales to justify what you are spending. If you are paying more per click but attracting more customers, the increase may be worth it. If your ad spend is rising but the phone is not ringing, forms are not being completed or sales are flat, it is time to take a closer look.

Start with the campaigns taking the biggest share of your budget. Continue investing in the ones bringing in valuable customers, and review or reduce spend on those that are not. The aim is not to lower CPC across the board. It is to put more of your budget behind the campaigns where the higher cost is still earning its keep.

2. Tighten the link between your advert and landing page

A click is more likely to convert when the page delivers exactly what the advert promised. Review your highest-spend keywords and check that your advert copy, offer, page headline, content and call to action all match what the person searched for.

If someone searches for a specific service, they should land on a page about that service, rather than a generic homepage. Better message match can help more visitors take action, which can offset higher click costs.

3. Review search terms and cut wasted spend

Higher CPC makes irrelevant clicks even more expensive. Check your search terms report regularly to see the phrases people actually used before clicking your advert.

Look for searches that are using budget but not bringing useful enquiries or sales. You may be able to add negative keywords to stop your adverts appearing for them, or refine the keywords you are targeting. This

helps focus your budget on searches more likely to bring in business.

4. Make sure automation is working towards the right goal

Google’s automated bidding can help you compete for clicks that are more likely to convert. But it can only work with the information and goals you give it.

Check that you are tracking the actions that genuinely matter to your business. A completed form is useful, but not if most submissions are unsuitable. If possible, use your sales or CRM data to identify which enquiries

become real customers, so you can make better decisions about where to spend.

5. Improve the journey after someone clicks

If you are paying more for visitors, make it as easy as possible for them to take the next step. Check that your page loads quickly, works well on mobile, clearly explains your service and makes it simple to call, book or send an enquiry.

You could also test whether a shorter form, clearer call to action, stronger reviews or more upfront pricing information improves results. Improving your conversion rate can be more valuable than reducing CPC by a few pence, because it helps you get more from every visit.

Paid search is excellent for reaching people with clear intent, but it should not be your only route to visibility. The more people already know and trust your business, the less you need to rely on an advert to introduce yourself at the point of search.

Invest in the channels that support demand before someone is ready to click an advert. This could include helpful website content, local SEO, customer reviews, social media, email marketing and brand-building activity. A stronger overall presence can make your ads more recognisable, improve click-through rates and help you get more from paid search when you do use it.

6. Make your adverts work harder

Use all the relevant ad assets available to you, such as sitelinks, callouts, structured snippets, images and location information. These can make your advert more useful and prominent, giving people more reasons to choose you.

Use them to answer the questions people may have before clicking, such as what services you offer, where you are based, what makes you different, whether you have availability, or what they should do next.

7. Don’t rely on paid search alone

Paid search is excellent for reaching people with clear intent, but it works best as part of a broader marketing strategy. The more familiar potential customers are with your business, the more likely they are to engage with your adverts when they are ready to search.

Invest in the channels that help build visibility and trust before someone is ready to click an advert. This could include helpful website content, local SEO, customer reviews, social media, and broader brand-building activity. Together, these channels can strengthen your presence in the market, making your business more recognisable in search results and helping you get more from your paid search investment.

The strongest results often come when paid search is supported by activity elsewhere. While search helps capture demand, other marketing channels can help create and nurture it, giving potential customers more

reasons to choose your business when they are ready to take action.

Wrapping up

Rising CPCs can be frustrating, but they do not automatically signal declining performance. In many cases, higher click costs are a reflection of increased competition for valuable searches and can be accompanied by stronger engagement and conversion rates.

Rather than focusing solely on the cost of a click, businesses should evaluate the wider picture, including traffic quality, conversion performance and return on investment. After all, the most important metric isn’t what you pay for a click, but the value that click delivers to your business.

Paying more for clicks but not seeing enough enquiries? Our award-winning team can help you build a paid search strategy designed to reach the people most likely to become customers and generate more valuable leads. Get in touch with us today.

Meet the Author

Leah Davies

Leah is a marketing manager with over 10 years of experience in advertising and marketing. She holds a Diploma in Digital Marketing and a specialist certification in Social Media, both awarded by the DMI. Leah helps businesses build stronger connections with their audiences through smart and effective digital strategies.

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