11 Jan 2025

What are online ad prices in 2023?

Business/News

We've talked a lot about how online advertising can be good for your business, but we know that what every business owner cares about most is how much it will cost.

When building your marketing strategy and planning your campaigns, it's important to set goals and know what advertising budget you're willing to allocate. Of course, spend alone doesn't paint a complete picture - the other important metric is ROI.

While costs and returns are unique to each business, online ad pricing depends on many factors - some universal, others individual. We'll look specifically at Google Ads and Meta Network Ads (Facebook and Instagram) as the most used by native marketers.

Today we're going to talk about online advertising prices - what they depend on, how they are determined, what the average values were in 2023 and how to spend your budget wisely in 2024.

The cost of online advertising rises every year

With the exception of the years during the Kovid-19 pandemic, advertising prices have risen steadily every year. In recent years this increase has not been large - Facebook and Instagram ad prices have risen by between 2% and 3% per year between 2021 and 2023.

For ads on Google's network, the increase is significantly higher - between 20% and 30% for 2023.

Price depends on the platform

Choosing which platform to advertise on depends on many factors such as the demographics of your audience, the nature of your products/services and your marketing goals.

On Google's network, we mostly pay per click, so these ads are called PPC (pay-per-click). This option is most commonly used for ads on the Search network and is where we measure CPC (cost per click). Other variations are CPM (cost per mile), or cost per 1000 impressions, and cost per view (CPV), which are used in Display and Video formats.

The pricing method depends on the advertising objective - whether you want more clicks and increased traffic to your site to convert into customers or to promote your brand with an image campaign, where CPM or CPV options would be a better choice.

In Meta's advertising platform, we typically pay for results. This can be clicks if our goal is to send traffic to our site. It can be likes and other reactions if our goal is to increase engagement on a post. It can be completed purchases if that is our goal.

It is important to note that both platforms can display a variety of metrics for each platform. It's up to you to decide which ones work for you for your campaign analytics.

Other factors that influence the cost of online advertising

Industry. It depends on what you offer and to whom. In some industries, prices are higher because service prices are too. Acquiring new customers can be very expensive, but then the return is also great.
Advertising purposes. Whether you want to achieve more brand awareness, increase traffic to your site or have more completed sales.
Audience targeting. Platforms offer detailed targeting options by demographics, user path on your site, interests and more. Your people are out there, you just need to find them.
Creative elements. Once you find them, you need to know how to approach them. Find out what needs and problems they have and when you advertise your products, offer a solution.
Ad Schedule. You can let your ads run on certain days or even times of the day when you think your audience is more likely to be online. This option has some risks, but choosing it depends on the specifics of your business.
Seasonal differences. Around Black Friday and Christmas everyone is shopping. Accordingly, everyone advertises. Accordingly, positions in Google's Search results and Facebook's Newsfeed run out quickly - competition drives up the price.

Average online advertising prices for 2023

Let's get to the point. We know you want to see real figures, not just 'it depends' spin. So let's see how much online ads cost in 2023.

According to Gupta Media's highly detailed analysis, the average cost per 1,000 impressions (CPM) for ads on the Meta network (Facebook and Instagram) is $7.32.

For the month of December, that amount jumps to $8.18, and no wonder - the five weeks with the highest prices are in November and December. The record, however, was during Black Friday campaigns - when ad prices jumped about 66% compared to previous months and cost $8.80 per 1,000 impressions. Friday is also generally the day with the highest CPM - $7.20.

With Google Ads, pricing depends a lot on the niche in which your business operates. If for more expensive services like lawyers in 2023 we see a cost per click around $9 and for dentists around $7, then for real estate, tour operators, entertainment and e-commerce the values are $1.55, $1.63, $1.55 and $1.16 respectively.

The average cost per click for all niches is $4.22. The data is from Viden and Word Stream and is for Search Network ads.

How to spend your budget wisely

Try to achieve maximum relevance between your ads and your landing pages.
Take the time to create impactful creative elements - copy and design. They are the face of your ad, and it' s up to them whether you'll get the click you want at all.
Target your audiencesmartly. To do this, you first need to know them well, and then use the variety of options that different platforms offer to reach them.
Optimize your landing pages. If things are lame there, after the cherished click, a hit and "bye" will follow.
Analyze your previous campaigns regularly to see what worked and what didn't. The most useful thing is to learn from your mistakes, and in online advertising we often have to write down the formula that works because it is not universal. This is done with trial/error and analytics. If an approach costs you a lot and doesn't bring you revenue, dump it!