One thing that many paid media professionals have been noticing in recent years is the constant increase in the cost of paid ads, whether they are Google Ads, Meta Ads, TikTok Ads, etc. Following this idea, some doubts arise about the theme: what are the reasons for the rising cost of ads and how long will they continue to get more expensive?
Even though it is not an organic and free resource, investing in paid ads can bring extremely significant returns for companies, as they allow for a broader reach of publications developed so that the brand reaches a more extensive and, at the same time, segmented audience according to the persona designed in the services or products offered. And for this reason, even with the growing increase in prices, investments continue.
The problem, however, is that there has been a clear perception of the increase in prices in the area in recent years, mainly triggered by the pandemic. After all, with the global spread of Covid-19 in 2020 and 2021, several establishments had to close their doors. In response to this strong impact on the physical market, we consequently saw a significant push in the use of the internet by the population, which began to participate daily in the lives of many people who, until then, had no contact or interest in the virtual space.
Data from the WHO, as evidence of this, show that there was an increase from 71% to 83% in the number of households with internet access between 2019 and 2020, equivalent to about 61.8 million connected homes. In this scenario, as physical stores could not reopen quickly, the great idea that many entrepreneurs had was to start selling through the internet, where all people ended up spending long hours.
Furthermore, during the period of social isolation, many professionals became unemployed and had the need to seek something to sustain themselves financially, which also triggered another movement of great prominence during this period: infoproducts. Among them, the popularization of paid traffic management content was notable.
Therefore, we had three main pillars for the event we are analyzing, namely: the employers (from stores that closed during the pandemic), professionals who had their jobs terminated, and lastly, the sale of the knowledge needed for unemployed individuals to start simple jobs in the field – leading to an oversaturation of both online stores and traffic managers. The result? Several stores in the same segment competing, in an auction system, for ad platforms using the same keywords.
In a parallel idea, for example, when there is high demand for a certain type of product and the market faces a shortage of stock, what happens? The price increases. And that’s what happened in recent years. There was a lack of audience for all these stores that did not know how to specialize their e-commerce.
This movement of rising prices was closely monitored by the entire global market, impacting even a variety of popular food products on the Brazilian table, as shown in a report by O Globo, ‘In January and February, the cost of food at home rose by 2.95%, compared to 1.25% of the IPCA. El Niño affected harvests. Beans, rice, potatoes, and carrots already have increases above 10% in 2024.’
Related to international economics, we have, for example, the data shared in the research “UK inflation rate: How quickly are prices rising?”, in which it was noted that, although inflation has fallen significantly since it reached 11.1% in October 2022, which was the highest rate in 40 years, this does not mean that prices are falling – just that they are rising less rapidly. All this indicates that not only are ad prices going up; but all costs are on the rise.
In this general context, the reason for the increase in paid campaign prices is clear, summed up as: due to the overall increase in prices universally (even in first-world countries); the overpopulation of advertisers in the same niche, without differentiating points; and the devaluation of the Brazilian currency, which worsens the situation. Given this, the trend for PPC and CPM (pay-per-click and cost-per-impression, respectively) campaign prices is a continuous increase in costs, or at least, that is the shared view of some paid traffic professionals with years of experience in the market.
