Are Advertising Expenses Fixed or Variable?

07/21/2025 Katrina Leung Optimize your media budgets

You know this: advertising isn’t a one-size-fits-all budget item.

Some formats come with set prices (relatively...), others depend entirely on performance, and many campaigns sit somewhere in between.

That’s why business owners and marketers often ask:
"How much control do I really have over my advertising costs?"

The short answer?
It depends on the formats you choose and how you structure your campaign.

Let’s break it down so you can make smarter, more predictable decisions for your business.

What are “Fixed” and “Variable” Costs?

Before diving into the question "Are advertising expenses fixed or variable costs?". Let's define what they are first:

Fixed costs stay the same no matter how much activity or output there is. Think: office rent, monthly software subscriptions, or a fixed media rental.
Variable costs change depending on usage or performance. The more you do or get, the more you pay. Think: printing 10,000 flyers instead of 1,000, or spending more on Facebook ads because your campaign went viral.

Hint, hint: In advertising, both types exist. Sometimes even within the same ad campaign.

Fixed Cost Examples in Advertising

Some formats are predictable and booked on a set schedule. Once you sign the contract, your costs are locked in.

Fixed formats include:

Bus shelter advertising in high-traffic areas like Central or Mong Kok (e.g. HKD 6,000 for a 7-day slot)
MTR advertising lightbox — typically rented by 2-week or monthly blocks with fixed fees
Print magazine or newspaper ads — where rates are pre-agreed per issue
Outdoor advertising billboard rentals — especially those booked long-term (e.g. 1 month or more)

Example:
You rent an MTR concourse advertising panel in Admiralty for 2 weeks at HKD 22,000. That price won’t change, regardless of how many people see it or interact with your brand.

This gives you predictability, which is great when you’re working with a set budget.

Lo Wu Port Advertising

Shenzhen

Event Truck

Hong Kong

Bus Advertising

Hong Kong

SCMP Advertising

Hong Kong

Variable Cost Examples in Advertising

On the flip side, performance-based channels like digital ads work differently. You often pay based on results: clicks, views, impressions, or actions.

Variable formats include:

Facebook and Instagram ads, for example, are charged per click, impression, or conversion
Google Ads (Search or Display) — operates on bidding systems
YouTube pre-roll ads — where you pay only if someone watches 30 seconds or more
Programmatic advertising — based on real-time bidding for ad placements
Influencer marketing campaigns with commission models (e.g. HKD 500 per sale driven)

Example:
You set a HKD 5,000 budget for a Facebook ad campaign promoting your summer sale. Depending on your audience size, bidding cost, and engagement rate, you could get 50,000 views or only 10,000. There’s no guaranteed reach, but you can track every cent.

This model offers flexibility and control, especially if you want to scale up or pause campaigns quickly.

MTR Mobile App

Hong Kong

Citybus Network

Hong Kong

Instagram Video Ads

Online

Facebook Carousel Ads

Online

How to Approach Advertising Costs Like a Pro

Start by: What kind of outcome are you aiming for?

Objective	Best Approach	Example in HK Context
Build brand awareness	Fixed-heavy	MTR concourse panels in Central or Tsim Sha Tsui
Drive web traffic or sales	Variable-first	Facebook Ads, Google Search, Programmatic DOOH
Dominate a local area visibly	Fixed formats	Bus shelters and LED billboards in one district
Test offers or creatives quickly	Variable	Instagram Stories, YouTube bumper ads
Launch and sustain brand recall	Mix of both	MTR for presence + retargeting on mobile/social

What Smart Advertisers Actually Do

In practice, successful advertisers don’t choose one format type; they adapt based on campaign timing, budget fluidity, and audience behaviour.

Let’s say you're launching a new product for the holiday season:

You might lock in fixed placements now like a prominent lightbox ads in Mong Kok to secure visibility when foot traffic is highest.
At the same time, you leave room in your budget to ramp up variable campaigns, like Meta or Google Ads, as you see which messages resonate best.

It’s not about fixed vs. variable costs. It’s about how much control, risk, and scalability you want at any given time.