Where does such a dynamic increase in costs in Ads come from ?
Posted: Wed Sep 24, 2025 1:16 pm
The rising cost of advertising is primarily driven by the auction model, which underlies the vast majority of online advertising systems (Meta Ads, Google Ads, TikTok Ads, LinkedIn Ads, and others). Advertising space and the number of users that can be reached are limited, so the more advertisers interested, the higher the potential cost of advertising.
More and more global brands are investing in paid traffic to achieve quick results, which we observe especially in the e-commerce, iraq cell phone database SaaS and fintech industries, which is why the increase in advertising costs may be felt most in these sectors.
What will be important from the CFO's point of view?
Paid advertising doesn't suffer from the compounding effect, where past actions and investments build future value. With ads, the situation is simple – they're great tools for generating quick sales, but as soon as you stop paying, the impact disappears. Paid advertising doesn't create long-term impact on its own, because once the budget is exhausted, the ad automatically stops showing, losing visibility and conversions.
In SEO, on the other hand, the effects can last for months or even years if we build a solid foundation and periodically introduce changes and optimizations to the website.
From a CFO perspective, paid traffic will therefore be an operating expense that will not accumulate its value over time.
SEO + AISO as long-term CAC stabilization
In online marketing, SEO works similarly to an investment – once you put in the work, such as a written article, an optimized page, or a link, it sticks around and pays off in the future. Unlike with paid traffic, where you immediately lose your results after cutting your budget. With SEO, once you build visibility, it will remain high, even if you later reduce your website activities.
And what about AISO ? Visibility in AI tools like ChatGPT, Gemini, and Perplexity offers the opportunity to reach customers on new channels. Users are increasingly willing to ask LLMs for recommendations regarding services or products, creating a huge opportunity for businesses to gain exposure to potential customers early in the customer journey. Importantly, traffic from these tools is highly qualitative and converts much better than traffic from Google, which can significantly reduce CAC.
More and more global brands are investing in paid traffic to achieve quick results, which we observe especially in the e-commerce, iraq cell phone database SaaS and fintech industries, which is why the increase in advertising costs may be felt most in these sectors.
What will be important from the CFO's point of view?
Paid advertising doesn't suffer from the compounding effect, where past actions and investments build future value. With ads, the situation is simple – they're great tools for generating quick sales, but as soon as you stop paying, the impact disappears. Paid advertising doesn't create long-term impact on its own, because once the budget is exhausted, the ad automatically stops showing, losing visibility and conversions.
In SEO, on the other hand, the effects can last for months or even years if we build a solid foundation and periodically introduce changes and optimizations to the website.
From a CFO perspective, paid traffic will therefore be an operating expense that will not accumulate its value over time.
SEO + AISO as long-term CAC stabilization
In online marketing, SEO works similarly to an investment – once you put in the work, such as a written article, an optimized page, or a link, it sticks around and pays off in the future. Unlike with paid traffic, where you immediately lose your results after cutting your budget. With SEO, once you build visibility, it will remain high, even if you later reduce your website activities.
And what about AISO ? Visibility in AI tools like ChatGPT, Gemini, and Perplexity offers the opportunity to reach customers on new channels. Users are increasingly willing to ask LLMs for recommendations regarding services or products, creating a huge opportunity for businesses to gain exposure to potential customers early in the customer journey. Importantly, traffic from these tools is highly qualitative and converts much better than traffic from Google, which can significantly reduce CAC.