Interesting. So online advertising (at around $2.40 according to the article) is barely above outdoor advertising in terms of CPM. Makes you realize how big Internet advertising is going to grow. (via eMarketer)Not sure I buy that we have that much room to grow in CPMs. The more inventory comes online the more commoditized the overall marketplace becomes. Some inventory (niche video) will be able to demand outsize CPMs, some inventory (social media) will demand underweight CPMs. I’m not convinced that Internet advertising as a whole will necessarily be priced much higher than outdoor. The impact of banner blindness alone could be responsible.
I was thinking a little about this in the shower this morning and the big issue is how you measure an “impression” in different media. The problem with web media is you’re paying to have the ad show up, not for how long it’s actually visable on the screen. For most content sites people need to scroll to read, meaning the ad may only be on screen for five or ten seconds. Say we put it at ten for argument’s sake, that would make the CPM $7.20, much more inline with other CPMs.
What’s more, you have to assume that web CPMs take into account (lack of) efficiency. It costs more in terms of agency time to buy on the web since yo have to work across so many additional sites. Factor that in as well and you’re pretty much even.
@mikehudack Why shouldn’t online advertising be higher than outdoor? Surely it’s not much different from magazine and newspaper advertising right now. Also, you can’t click through outdoor advertising. I do agree with you that the “internet” as a whole may not have large CPM pricing, mainly because the Internet as a medium is gigantic. It’s much more likely to get splintered into “sub-channels” just as TV is spread over three different graphs in this chart. But as the above vehicles for advertising disintegrate, surely the competition for Internet ad space is going to drive up prices?
@heyitsnoah Interesting thought about online ads only being on the screen for 10 seconds. You’re probably right. Any idea how long somebody lingers on any of the ads in print media? Or what about the value of Broadcast TV ads that are being fast-forwarded through routinely nowadays?
