Paid Advertising Cost Trends 2025: What Marketers Must Know
This webinar, led by Jack Butler, Group Director of Paid Media at Tag Digital, sharing the paid advertising cost trends for 2025, including what’s driving paid media changes and how your team can stay ahead.
Explore how paid advertising cost trends for 2025, including shifts in CPC and CPM, are impacting your event marketing performance.
Jack shares data trends from the past five years, highlighting how market changes and new technologies like AI are influencing ad prices. He breaks down the impact of platforms like Google, Meta, and LinkedIn, and how tools like Performance Max (PMax) and Advantage+ are shaping results.
The webinar also offers guidance on adapting your campaigns, improving creative content, and managing performance in a fast-changing digital environment.
Key Topics:
- CPC and CPM trends across platforms
- How AI features are impacting Google ad costs
- Performance Max (PMax) and Advantage+ tools
- Meta’s seasonal cost shifts
- LinkedIn’s high cost and first-party data advantage
- Future challenges and tips for adapting
CPC and CPM: Why They Matter
CPC (cost-per-click) and CPM (cost-per-thousand impressions) are important because they affect how far your budget goes.
If CPC or CPM increases, you get fewer clicks or impressions for the same spend, which means fewer conversions and a higher CPA (cost-per-acquisition).
Jack explains that these trends are driven by auction prices, and it’s essential to track these to understand how the market is shifting. He highlights that 2024 was the most expensive year to advertise on Google in the last five years.
A key reason is the launch of Google’s AI Overview, which pushes down traditional ad placements and makes top spots more competitive. Jack also shows a chart covering five years of CPC data to prove how ad costs dropped in 2020 (when more people were online during lockdowns), then rose as demand returned in 2021 and beyond.
He points to a major spike in 2024 around the time Google’s Gemini-powered AI began summarising search results. This new feature sits at the top of the results page, reducing the space available for ads and making clicks more expensive.
Performance Max and Automation Tools
Performance Max (PMax) is a campaign tool that uses automation and AI to find the best ways to deliver ads. Jack explains that using PMax in campaigns resulted in a 30% drop in CPC for some brands, helping them get more conversions.
However, it does have challenges. PMax works across different platforms, including YouTube, and often requires video content. While it helps reach more people, the quality of those leads or registrations can sometimes be lower.
Jack suggests using creative strategies to pre-qualify users or adjust registration processes to make sure the right people are converting. Instead of avoiding these tools, he recommends finding smarter ways to work with them.
“These tools are the future… so we need to think of ways to operate around them rather than saying we’re just going to discount them.”
As privacy rules tighten and third-party data becomes harder to use, automated tools will become more common. Brands need to understand their limitations and plan accordingly, especially when measuring success.
Meta’s Ad Costs and Seasonal Trends
Jack also shares insights into Meta’s (Facebook and Instagram) advertising trends between 2023 and 2025. Costs on Meta vary throughout the year, with big spikes during high-demand periods like Black Friday in Q4.
In contrast, January tends to be quieter and cheaper. Jack presents data showing Meta ad costs fluctuating between £8.23 and £11.12, with an average of £7.34. One major change was Meta’s shift to Advantage+, a tool similar to PMax, which automatically targets the people most likely to convert.
“It’s being now forced on us, we have to come up with ways to navigate around that rather than trying to force our way out of it.”
This switch caused a drop in average CPC, but like PMax, it may reduce the quality of results. Because marketers are now required to use Advantage+, Jack stresses the importance of adapting strategies rather than resisting change.
He suggests preparing for more algorithm-driven tools like this and finding ways to ensure high-quality engagement.
LinkedIn’s High Costs and Targeting Power
LinkedIn stands out for being much more expensive than other platforms, 221% higher, on average. Jack explains this is because LinkedIn offers something unique: highly accurate, first-party data.
People are far more likely to list their real job titles on LinkedIn compared to other social platforms. This makes LinkedIn especially powerful for targeting specific professional audiences. Because it’s so targeted, costs are higher and you get fewer impressions.
Jack recommends using LinkedIn mainly for awareness, rather than direct conversions. It’s ideal for reaching senior leaders or niche segments. He suggests using engaging formats like InMail and tracking the effect of these campaigns on broader results.
With more focus in the industry on “incrementality” and campaign uplift, Jack sees this kind of targeting as key to future measurement strategies.
Final Thoughts: Why This All Matters
Jack ends the session by stressing why marketers need to pay attention to rising paid advertising costs and changing tools. As platform prices increase, staying within the same budget year after year will lead to fewer results.
While tools like PMax can help at first, their value drops as more advertisers start using them. That’s why creative planning, better audience targeting, and smart measurement are more important than ever.
He advises being realistic about what automated tools can do and finding ways to improve outcomes through better content and tighter registration processes.
Finally, he underlines the growing importance of video. Video is now essential in digital campaigns, and it plays a major role in how people engage with content in an AI-led world.
“Video is essential in your campaigns and really thinking about your creative… is more important than ever.”