2025 was a great year for Meta

Based on the report they released yesterday, 2025 was a great year for Meta. Revenue grew 22% versus last year.

If you're an advertiser, that should make you nervous.

The issue

In Q4 2025, ad impressions were up 18% and the average price per ad was up 6%.

For all of 2025, ad impressions were up 12% and the average price per ad was up 9%.

That's a concern. More supply, and the price still went up.

Where the money is going

Now follow the spend.

Meta spent $72.22B on capital spending in 2025, and expects $115-$135B in 2026.

Total costs and expenses were $117.69B in 2025, up 24%, and they expect $162-$169B in 2026.

This is a huge jump.

What matters is what they say next. Despite the big step up in infrastructure investment, they still expect 2026 operating income to exceed 2025.

Someone has to fund it.

Meta's revenue model is ads so the plan is pretty clear. Keep spending and raise prices. The funding source is the advertiser.

Why this is scary

Meta can raise prices because they control access to billions of users. For a lot of businesses, especially small ones, Meta isn't optional. It's still the most direct path to demand at scale.

But every brand has a limit. There's a number where the math stops working.

Meta doesn't have to care if it works for you. If enough other advertisers can pay the higher price, you get pushed out.

The advertiser's problem

If you rely on Meta to acquire customers, you're getting squeezed.

Prices can increase without you getting anything better in return. Your cost to get a customer goes up, and your margin gets worse.

What happens next

If these trends continue, prices keep rising through 2026 and beyond.

More direct to consumer brands drop out because the numbers stop working. They don't have enough margin, repeat buying, or pricing power to keep up.

Spend concentrates into brands with bigger orders, better margins, and stronger repeat buying.

The middle gets squeezed.

The question

Where is your limit, and how close are you to it? If Meta gets meaningfully more expensive again, what is your plan B?