Plan for higher digital advertising costs in 2022

November 1, 2021

The last 21 months have been difficult, for so many reasons. As we head into 2022, be prepared for one more blow from the pandemic: rising costs of digital advertising. 

Thanks to lockdowns around the world, there has been a dramatic rise in competition online, and advertising costs are rising because of the demand.  

 Here’s a breakdown of advertising trends from the past year: 

  • Google Ad’s cost per click is up 23% 
  • The cost to advertise on Facebook is 33% higher than it was at the end of 2019 
  • The cost per thousand impressions on Instagram is up 23% 
  • Anecdotal feedback shows companies’ paid ad budgets have gone up as much as 50% in less than a year 

Why are digital ad costs rising?

Digital advertising is part of a complex ecosystem where global trends influence online marketing. In the case of digital advertising costs trending upward, there appear to be three major factors at play:

1. Covid-19

Back around April 2020, many companies initially axed any extra expenditures, so advertising spends decreased. Things changed, however, once we recognized the lockdowns were lasting longer than originally anticipated. Businesses responded to closing their physical doors by ramping up their online presence. This caused an influx into the (already) competitive online market – as more brands were vying for ad space. This leads to our next factor…

2. Competition

When it comes to digital advertising, the more businesses playing, the more competitive the game. This is true because both paid and organic advertising relies on keyword and audience targeting. The more brands that are targeting their audience with similar keywords, the more difficult it is to hold onto that top spot.

3. Apple’s iOS update

Thanks to Apple’s newest iOS update, you should apply their “Think Differently” tagline to your ad campaign – because thinking different is exactly what you’ll need to do to remain visible to your target audiences.

Apple’s recent security update, which prioritizes user privacy and data protection, has further complicated the ability for Google, Instagram and Facebook to target users. And with approximately 1 billion iPhone users worldwide, this is significant. The iOS update is contributing to the rising cost of impressions and clicks, as businesses are being forced to cast a wider net to catch fish… I mean, leads.

How to plan your advertising budgets for 2022.  

The best way to cope with rising digital advertising costs is twofold: plan accordingly and spend strategically.  

As you budget for 2022, allocate an extra 25% towards your online ad spending. A bigger budget will help you remain visible and competitive within this challenging market. 

Next, spend strategically. Work with a team that lives and breathes digital marketing. They understand the ever-changing landscape and will use their experience to your advantage, getting you the best ROI.  

Do you have a resolution for success in 2022? Reach out to Ontario SEO and let’s chat about how we can help you navigate digital advertising in this competitive market.