How much do online ads cost?
April 23rd, 2009
Posted by Danny Allen
I frequently get people calling me to ask what the average CPM is for online ads, or Hispanic online ads, or online video pre-roll. I usually won’t give a number, but instead give a range, based on my recent anecdotal observations.
eMarketer seems to think that’s good policy, as it seems that nobody really knows how much online ads cost. They cite a study that “puts a hard number on the cost of traditional ads in 2008,” but when it comes to online ads, you get stuff like this:
â€œIt is all over the place,â€ said Rino Scanzoni of GroupM in a MediaPost article.
â€œIt is very hard to say this is what the average is. The average is made up of some big, big swings, depending on
what you are buying.â€
The truth is that the online market is so fragmented it is really difficult to say what the average price is for a particular kind of ad. There are a ton of factors that could play into prices: quality of the website, your user demographic, placement of the ads on a page, ability to do sophisticated targeting, how good your ad sales team is, what other ads are showing on your site, and on and on. Add to this that there is imperfect information in such a huge market and you can get a wide range of prices.
The eMarketer report cites some studies estimating average prices for online display, video, and search. The average prices in them don’t look unrealistic, but marketers and media sellers should keep in mind that these are estimates and averages. A marketer isn’t going to get the front page of the New York Times website for $2.39, or even ten times that. At the same time, the newest social network isn’t going to sell all of your remnant for that or even half that. Use these numbers as a benchmark and proceed accordingly.
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