The Impact of Rising Digital Marketing Costs in 2025 and How Small Businesses Can Combat Them
Trying to get the word out about your business can seem like an uphill battle in today’s world—a battle that’s increasingly difficult as we see an uptick in the costs of digital advertising and marketing. Owners of small and growing operations find themselves looking for the most cost-effective ways to keep ahead of the competition.
Where Are We Seeing Increasing Digital Advertising Costs?
Honestly? A little bit everywhere. From social media platforms to Google search ads, there’s been an upward trend in the costs of digital marketing for a variety of reasons. A quick rundown:
- Meta/Facebook’s CPM has increased 61% year over year
- Tiktok’s CPM soared by 185% year over year
- Google Search CPC rates went up by 22% between 2022 and late 2024
- Amazon CPCs for sponsored product offerings rose 14% year over year
- Instagram’s CPM increased by 23% year over year
Just last year, GroupM published a report stating that digital advertising costs have risen by 15-20%.
Why Are Digital Advertising Costs Rising?
Like most things in life, this shift can’t be explained by a singular reason. A lot of the groundwork for this trend was laid in 2020 during the COVID pandemic, when many advertising routes dried up during lockdowns, leaving heavy competition for limited digital ad space. It’s an economic tale as old as time. Limited supply meant that companies were willing to shell out cold hard cash if it meant securing their marketing.
This has been exacerbated by recent changes that include changes to consumer privacy laws and the growing prevalence of artificial intelligence.
We’ve actually touched on the consumer and data privacy changes, covering what the new landscape looks like and how to adapt accordingly. To comply with these laws and to get out ahead of the rising consumer desire for data control, a lot of tech companies are adjusting how they use third-party cookie, setting tracking limitations, and requiring stricter opt-out options. All of these together make it more challenging to gather information and target your ideal audience.
Meanwhile, the rapid integration and growth of AI into search results is having a major impact on organic and paid visibility, making it more costly and for diminishing returns. If you’re looking for an article that really focuses on this aspect, we discussed recently how best to optimize for AI and voice search.
7 Cost-Effective Digital Marketing Strategies Small Businesses Can Utilize
So what is a business owner to do? Especially owners of smaller business and start-ups who are already a one-stop shop and managing limited resources. There are some low-effort, less costly digital marketing strategies you can leverage:
Content, Content, Content
It’s the drum we’re constantly banging on: consistent, quality content is your best marketing friend.
Start with your website. When was the last time you did a comprehensive content assessment of it? Do you have a blog and are you updating it on a consistent basis? Search engine optimization is part of this, but your goal is to have both your blog and your static pages offer valuable content that helps prospective customers.
When we say content, though, don’t limit yourself to writing articles or blog posts. You can also look at leveraging videos, both long and short-form; infographics; images; and case studies. And don’t just discuss your products and services. Talk to your consumers. What information might they be interested in? How can you utilize your expertise to provide value to them?
Generating content regularly engages your old customers but also grabs new ones as well. Many digital marketing agencies prefer creating content as it is a perfect low-cost online advertising tool. Furthermore, through content marketing, a firm can address customer pain points and earn their loyalty.
Localized Searches
Small and growing businesses have such an opportunity to benefit from connecting to their local area and community, and one of the easiest ways to do that is to integrate it into your digital footprint.
- With your search engine optimization efforts, make sure you’re including location-specific keywords.
- Claim and optimize your Google Business profile if you haven’t already and look into getting local business listings on other platforms and directories.
- Partner with community platforms and other complementary local businesses to both increase your connections and build your brand with local consumers.
Email Marketing
We’ve said it…at least once before. Probably several times, to be honest, but it’s already been a long year. Email marketing is one of the most cost-effective marketing tactics you can use, with the highest potential return on investment. It gives you a way to stay in touch with the customers and prospective customers who have expressed interest in what you have to offer. It also provides you with good data to help you understand what messages are working—or not working.
Create a streamlined, highly visible contact or signup form. Create a consistent schedule for sending out unique, valuable content. Test new messages, new offerings, different subject lines, and then monitor the results to get a clearer idea of what resonates with your audience.
First Party Data
This one pairs with the email marketing point above; the new changes in data collection and consumer privacy make it imperative that you have ways of gathering first party data.
First party data is information that your business has collected directly from users, whether that’s from your website, your social media, or elsewhere.
Having an established email marketing campaign gives you a specific goal to drive potential customers toward by encouraging them to subscribe for regular updates. Also, creating a valuable, desirable resource—like a webinar, a report or white paper, a tool or digital product—can serve as a lead magnet by exchanging the resource for user data.
The better first party data you have, the better your chances of being able to moderate your Google Search ad spends.
Online Communities and Forums
Consumers like to see authenticity in the businesses they work with these days, and one way to do that is to engage with relevant online communities. Not in a self-promotional way, but in a way that demonstrates your expertise and shows that you care. A place like Reddit, Quora, and groups on social media platforms like Facebook can give you the chance to interact with your ideal customers, participate in discussions, answer questions and share resources, and establish yourself as a voice of authority in your industry.
Social Media
Love it, hate it, love-to-hate it—social media continues to be extremely popular and an effective marketing tool for small businesses. You first need to know where your ideal customers are more likely to hang out. You don’t want to put all your efforts into LinkedIn if your audience is chilling on TikTok.
There are a few different ways you can utilize these platforms. Like with content, it’s important to post consistently. Social media loves a set schedule, and they’re more likely to push your content out if they know you’re regularly coming back for more. Ensure that you’re investing in high-quality images or videos and that you’re not just throwing anything up there. You want to provide value, draw attention, and give users a reason to follow you. And once you do get engagement, encourage it by interacting with comments and messages.
You can also run targeted ads on social media, but we encourage clients to keep it small, highly targeted, and strategic to make the most of your money.
Monitoring and Analysis
The last strategy we have is arguably the most important.
You have to regularly step back, assess everything you’re doing, analyze the data you’re receiving, and be brutally honest about what is and isn’t working. Nothing is going to save your marketing budget as much as slowing down and being very strategic. Prune the tactics that are doing nothing but draining your time or resources with no return. And invest more into those that are showing the most benefit.
That’s how you stay ahead of the digital marketing game in 2025.
