Dynamic pricing models have a significant impact on online ad costs. As demand for online advertising space increases, the cost of ads also rises. This is evident in the increase in the average starting cost of 1000 impressions for a Facebook ad, which went up from $5.12 in 2019 to $7.19 in May 2020, and then to $11 in October 2021. This increase in cost is a result of the dynamic pricing model employed by online platforms like Facebook, where the price of ads is determined by the level of demand.
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