The trend: Global Meta (Facebook and Instagram) ad cost per click (CPCs) split sharply over the past year. Retail CPCs nearly doubled from 16 cents in Q3 2024 to 32 cents in Q3 2025, while ecommerce CPCs fell from 23 cents to 19 cents as AI-driven optimization cut waste, according to KPI data from our partner Emplifi.

• The overall median CPC declined from 19 cents to 15 cents, a move consistent with advertisers reallocating spend—not pulling back—by leaning into automation and performance efficiency.
• Major earnings support this pattern, with Meta (26% ad revenue growth), Google (12.6%), Walmart (53% global ad revenue growth), and Target (22%) all reporting strong ad momentum.

Emplifi defines “retail” as brands with physical stores or multilocation presence (e.g. grocery, big-box, department stores, home improvement, and specialty retail). “Ecommerce” refers to online-only stores (e.g. direct-to-consumer brands and digital-native verticals across fashion, beauty, home goods, and consumer electronics).

Why the drop in ecommerce CPCs? “Meta’s AI-driven optimization tends to deliver stronger efficiencies for ecommerce advertisers, since their campaigns usually have clearer online conversion signals,” explains Emplifi’s marketing director Jordan Lukeš.

Retail advertisers, however, often have a mix of online and offline goals, which can make it more difficult for automation to drive the same level of CPC efficiency, hence the diverging costs. This also means a channel that is already higher margin like ecommerce becomes even more profitable, while the more-expensive brick and mortar channel sees its ad costs go up.

Why it matters: Competition over the final weeks of December is expected to be fierce, especially among retailers looking to hit their goals.

• We forecast US holiday ecommerce sales to reach $284.83 billion in 2025, up 7% YoY, with total retail holiday sales hitting $1.37 trillion. Retailers are bidding more aggressively as holidays compress purchase windows, amplifying auction pressure throughout Q4.
• Nearly 21% of total holiday retail spending will occur online, intensifying competition across social platforms.
• Ecommerce advertisers are benefiting from smarter AI tooling—like automated bidding, improved creative iteration, and better signal use—pushing CPCs lower despite steady demand.

What it means for advertisers: Assume you’ll have to be nimble and agile with your budgeting and strategies.

Even beyond Q4, expect CPC swings, with retail costs rising sharply and AI efficiency gains becoming the key advantage for ecommerce players.