State of Paid Acquisition: Q1 2025 and the Advantage+ Default

State of Paid Acquisition. Quarterly read. Written May 6, 2025.

Meta's average price per ad is up 10% year over year, and the headlines are arguing about everything else.¹ Every quarter I read the platform's own numbers, then ask one question: what does this change about how an expert should run paid traffic next week? Not what makes a good headline. What changes Monday morning.

This quarter, three things moved at once. Prices rose. Automation became the default way to set up a campaign. And the TikTok scare reminded everyone that a channel can be taken away by a court or a politician. Here is the read.

What did Meta report for Q1 2025?

Meta reported results for the quarter ended March 31, 2025 on April 30. Total revenue was $42.31 billion, up 16% year over year. Advertising revenue was $41.39 billion, also up 16%.¹

The two numbers that matter to a buyer sit underneath that headline. Ad impressions grew 5%. The average price per ad grew 10%.¹

The arithmetic ties out

Do the multiplication. Roughly 5% more ads delivered, at roughly 10% higher average prices, gives you about 15.5% growth in ad dollars. Meta's reported 16% is right there. The revenue story is not a mystery. It is more inventory sold at a higher price.

What the price number does and does not tell you

Be careful. "Average price per ad" is a platform-wide average across every advertiser, placement and country. It does not mean your cost per lead rose 10%. Your costs depend on your audience, your creative, your offer and your competition. But I take the direction seriously, and I am not going to guess at the cause.

Other numbers from the release for context: Meta reported 3.43 billion daily active people on average in March 2025, up 6%, net income of $16.64 billion, and raised its 2025 capital expenditure guidance to $64 to $72 billion.¹ The company is spending heavily on infrastructure. The release also flagged legal and regulatory headwinds in the EU, including a European Commission decision about its ad-free subscription model that could significantly affect its European business as early as the third quarter.¹

Is the whole market growing, or just Meta?

The wider market is growing too. The IAB's full year 2024 report, released April 17, 2025, put US internet advertising revenue at a record $259 billion, up 15%.³

More money chasing the same attention is a quiet tax on everyone who buys it. If you are waiting for ads to get cheap again, I would not plan around that.

The practical read for a small operator: growth at this scale usually means more competitors, more creative in the feed and more pressure on anyone running average ads. Average work gets more expensive. Distinct work, with a clear promise and real proof, still has room to stand out.

What is the Advantage+ default, and why does it matter?

On February 6, 2025, Meta said it was testing a streamlined setup in which marketers would no longer have to choose between a manual campaign and an Advantage+ campaign. Advantage+ optimization would be available across all campaign elements, and campaigns would show an "On" label when the most advanced optimizations apply, which happens when you use Advantage+ audience, placements and campaign budget.² Meta also renamed Advantage+ shopping campaigns to Advantage+ sales campaigns, to reflect the full range of advertisers who can use them.² I broke the change down in Advantage+ Sales Campaigns.

Automation moves the lever, it does not remove it

When the system chooses more of the audience, the placement and the budget, your job shifts. You no longer win by out-tweaking targeting. You win by what you give the machine. Three inputs matter most.

Why I am not panicking about it

Every few years the platform removes a control and tells us the machine is better at it. Sometimes that is true and sometimes it is a cost saving dressed as a feature. My approach does not change: test it with a modest budget, compare it against what you know works, and keep a record. Do not turn on a default because it is the default. Turn it on because it earned its place in your numbers.

What did the TikTok scare teach about channel risk?

On January 17, 2025, the Supreme Court unanimously upheld the law requiring TikTok's divestiture, with the vote recorded as 9-0.⁴ The law set a January 19 date. On April 4, 2025, an executive order extended the enforcement delay again, to June 19, 2025.⁵

I am not here to argue politics (I covered the first blackout in TikTok Went Dark for a Day). I am here to point at the shape of the risk. A platform that millions of people and thousands of businesses built on moved from "stable" to "in court" in a matter of months, and the deadline kept moving.

Rented land, owned land

Any channel you do not own can be taken, throttled, repriced or restricted. That includes Meta. It includes Google. It includes the app you love today.

What you own is your email list, your phone numbers (with consent), your website, your customer data and your reputation. If 100% of your revenue depends on one ad account, you do not have a channel. You have a single point of failure.

How should an operator read a platform's earnings report?

Most of an earnings release is written for investors, so sort it before you react. I put each line into one of three piles.

Pile one: read closely

Ad impressions and average price per ad. These two numbers describe the market you are buying in. If impressions are growing faster than price, supply is loosening. If price is growing faster, demand is tightening. In Q1 2025, both grew, with price growing faster.¹

Pile two: note, do not act

Daily active people, net income, capital spending. They tell you the platform is healthy and investing heavily. Meta's guidance of $64 to $72 billion in 2025 capital spending suggests it expects to keep building the machinery that sells ads.¹ That is context for the next few years, not a to-do for next week.

Pile three: watch for risk language

Legal and regulatory notes are where a platform quietly tells you what might change. The EU decision about the ad-free subscription model is not your problem today, but it is a reminder that the rules of the places your audience lives are still moving.¹

What do these numbers do to your cost math?

This is where reading turns into decisions. Take the one calculation that matters, the most you can pay to acquire a client, and run it again with a cautious assumption: your costs might drift up before they drift down.

Here is the structure. Start with the cash you reliably collect from a client over the first stretch of the relationship. Multiply by the share of your leads that book, the share who show, and the share who buy. Subtract delivery cost and the profit you want to keep. What remains, divided by the number of leads it takes to get one client, is your ceiling for cost per lead.

An illustration, not data

Suppose, purely as arithmetic, that you collect $3,000 from a client, keep $1,500 after delivery, and want to keep $1,000 as profit. You can spend $500 to acquire that client. If one in ten leads becomes a client, your ceiling is $50 per lead. If your lead cost rises 10%, from $40 to $44, you still clear it. If it was $48 to begin with, a 10% rise puts you over the line. Those figures are made up to show the mechanics, not results from any account. The point is that thin margins cannot absorb a market that is getting more expensive.

If your math only works at a price Meta's own numbers say is moving the wrong way, the fix is rarely a cleverer audience. It is a better offer, a faster follow up or a shorter path from click to cash.

What should an expert do this quarter?

Here is the short action list I would work through.

What am I watching next quarter?

The previous read is in State of Paid Acquisition: Q4 2024. Three things. Whether the 10% price growth persists, or settles. How broadly the streamlined Advantage+ setup rolls out and what Meta says about results. And whether channel risk stays a headline or turns into a pattern.

If you want help stress-testing your paid acquisition plan against these numbers, see how I work with clients.

Keep building.Ekai