Ad Prices are Going Back Up

Meta released their Q4 earnings, and the average price per ad was up year over year for the first time in three nearly years.

Average Price Per Ad Meta

What’s causing this?

The percentage increase in ad impressions delivered is finally slowing down. Ad impressions are now up 21 percent year over year after increases of 23 to 34 percent during the prior four quarters.

Meta Ad Impressions Year Over Year

This slowdown in ad impressions is while usage continues to climb. There are nearly 4 Billion monthly users on the Meta family of apps now…

Meta Family of Apps Monthly Active Users

…with an all-time high 80 percent of those users on the app on any given day.

Meta Daily Active Users vs. Monthly Active Users

So usage continues to climb while ad impressions aren’t increasing as much as they were. Meta may be simply showing fewer ads now, though that’s not easy to prove.

It could also be that advertisers are spending more than ever. Meta’s total ad revenue skyrocketed to $38.7 Billion in Q4. While it was the fourth quarter, that is a 24% increase from Q4 in 2022.

Meta Ad Revenue

It’ll be interesting to see what happens this quarter. Are your ad costs going up?

[View our special analysis of Meta’s quarterly reports.]