Why Your Google Ads Cost More But Deliver Less

Google Ads performance for informational queries has collapsed dramatically since mid-2024, with paid click-through rates (CTR) plummeting from 19.7% to just 6.34% for searches triggering AI Overviews. For Southeast Wisconsin businesses investing in paid search, this 68% decline means the same advertising budget now delivers significantly fewer website visitors.

According to Seer Interactive’s November 2025 study analyzing 3,119 queries across 42 organizations, the culprit is clear: AI-generated summaries are answering user questions before they ever click on ads. If your paid search campaigns feel increasingly expensive while producing diminishing results, you are not imagining it.

CTR stands for click-through rate, which measures the percentage of people who click your ad after seeing it. When CTR drops, advertisers pay the same cost-per-click but receive fewer total clicks, making each conversion more expensive. For Milwaukee-area manufacturers, professional services firms, and B2B companies that depend on search advertising for lead generation, understanding this shift is essential for protecting marketing ROI. The old playbook of bidding on informational keywords to capture top-of-funnel prospects is becoming unsustainable. Businesses that adapt their strategy now will maintain competitive advantage while others watch their advertising efficiency erode.

What Caused Paid CTR to Drop 68% for Google Ads Campaigns

The primary driver behind declining paid search performance is Google’s aggressive rollout of AI Overviews, which now appear for 13.14% of all search queries and reach 1.5 billion users monthly across more than 200 countries. These AI-generated summaries sit at the very top of search results, answering questions directly and pushing both organic listings and paid advertisements further down the page. When users receive immediate answers without needing to click anything, traditional advertising metrics suffer dramatically. The Seer Interactive research revealed that even queries without AI Overviews experienced a 41% organic CTR decline year-over-year, suggesting broader behavioral shifts beyond just AI summaries.

Multiple factors are compounding this problem for advertisers. Users are increasingly seeking answers on alternative platforms like ChatGPT, which now has 800 million weekly active users, and Perplexity, which processed 780 million queries in May 2025 alone. This fragmentation means potential customers are finding information before they ever reach Google search results. Additionally, Skai’s Q3 2025 Digital Advertising Trends Report confirms that average cost-per-click has reached a six-year high, creating a double burden: advertisers pay more per click while receiving fewer clicks overall. For Wisconsin businesses operating on tight marketing budgets, this combination is particularly challenging.

How AI Overviews Are Impacting Your Milwaukee Advertising Budget

The financial impact of declining CTR extends beyond simple math. When your Wisconsin advertising campaigns experience 68% lower click-through rates, the effective cost per website visitor increases proportionally. A campaign that previously delivered 100 clicks at $5 each now delivers only 32 clicks for the same $500 budget. For Southeast Wisconsin B2B companies where each qualified lead might be worth thousands of dollars, this efficiency loss can translate to tens of thousands in unrealized revenue annually. The situation demands strategic response rather than simply increasing budgets to compensate for declining performance.

Local market conditions make this challenge particularly acute for Milwaukee-area businesses. The region’s strong manufacturing and professional services sectors rely heavily on informational search queries to attract potential clients researching solutions. These are precisely the query types most affected by AI Overviews. When a procurement manager searches for manufacturing process comparisons or a business owner researches software solutions, AI summaries often provide sufficient information without requiring any website visit. Understanding which of your campaigns target vulnerable query types is the first step toward protecting your advertising investment and reallocating resources effectively.

Should Wisconsin Businesses Reduce Google Ads Spend or Reallocate

The data suggests reallocation rather than reduction for most businesses. Lower-funnel keywords with clear transactional intent continue performing well because AI Overviews rarely satisfy purchase-ready queries. When someone searches for pricing, scheduling, or location-specific services, they typically need to click through to complete their objective. The Seer Interactive study recommends shifting budget away from high-funnel informational campaigns toward these conversion-focused opportunities. Additionally, branded keywords show remarkable resilience, with Amsive research indicating an 18.68% CTR increase when AI Overviews appear on brand-related searches, likely due to established user trust and familiarity.

Strategic diversification also merits consideration. Marketing budget optimization experts recommend testing alternative advertising platforms where AI disruption is less pronounced. For B2B companies specifically, LinkedIn advertising often delivers stronger results for considered purchases and professional services. Retargeting campaigns that reach users who have already visited your website also maintain effectiveness because these audiences have demonstrated existing interest. The key principle is matching your advertising investment to user intent signals rather than competing for attention in spaces where AI now dominates the conversation.

Budget Reallocation Strategies That Work for Southeast Wisconsin Companies

Successful budget reallocation requires understanding the new visibility metrics that matter. Traditional success measurements focused on clicks and traffic volume, but the Seer Interactive research suggests shifting focus toward share of voice and citation frequency. Brands that appear in AI Overviews experience dramatically better performance: 91% higher paid CTR and 35% higher organic CTR compared to non-cited competitors on identical queries. This means investing in Generative Engine Optimization alongside traditional paid search is no longer optional for businesses seeking sustainable advertising results.

Consider implementing these proven reallocation approaches for improved results:

• Shift 20-30% of informational keyword budget to transactional and branded terms where CTR remains stable
• Invest in citation-worthy content that positions your brand for AI Overview mentions, creating a visibility moat
• Test alternative platforms including LinkedIn, Microsoft Ads, and industry-specific advertising networks
• Implement remarketing campaigns targeting website visitors across multiple touchpoints
• Focus on local service keywords where AI Overviews appear less frequently and user intent favors clicking

The urgency for action is real. Seer Interactive projects that high-funnel query CTRs will decline an additional 20-30% through 2026 if current trends continue. Wisconsin businesses that proactively reallocate budgets now will capture market share from competitors still running inefficient informational campaigns. The window for competitive advantage is narrowing as more advertisers recognize these dynamics and adjust their strategies accordingly. Working with experienced partners who understand both traditional PPC and Southeast Wisconsin AI search visibility creates the integrated approach modern advertising requires.

How to Measure Google Ads Success After Shifting Your Strategy

Measurement frameworks must evolve alongside advertising strategies. Rather than obsessing over raw click volume, focus on cost-per-acquisition and revenue-per-click metrics that reflect actual business impact. A campaign generating fewer clicks but maintaining conversion rates is often more valuable than high-traffic campaigns with poor quality scores. Implement proper attribution tracking connecting ad clicks to downstream conversions, whether those are form submissions, phone calls, or e-commerce transactions. Milwaukee Web Design recommends establishing baseline metrics before making significant budget changes, then measuring improvement across 60-90 day windows to account for normal variation.

New KPIs should include visibility in AI-generated responses across Google, ChatGPT, and Perplexity. Manual testing of your top 30-50 keywords across these platforms monthly reveals whether your brand earns citations that amplify paid advertising effectiveness. Track the correlation between citation presence and paid campaign performance to quantify the value of integrated visibility strategies. Additionally, monitor competitor citation frequency to identify opportunities where improved content could capture share of voice. The businesses achieving strongest results in 2026 will be those treating AI visibility and paid advertising as complementary investments rather than separate channels operating independently.