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Thursday, September 08, 2005
It's all well and good to speculate (as I recently did) about whether $1 or $2 is a fair minimum CPM rate for ads near online content.
But it's also interesting to benchmark going CPM rates for search, by calculating the effective CPM rates on keywords that do well in a paid search account (even though the actual payment method is "per click").
Glancing at a recent tracking report for one client, I see that one of our "go-to" keywords has an effective CPM of $77. This just emphasizes the key difference between search and nearly every other type of advertising. The market will continue to push effective CPM rates higher on the most valuable inventory.
Importantly, this inventory isn't deemed valuable by virtue of glowing adjectives or spin. The advertiser makes sufficient money from the ad that the $77 is gladly paid with an easy-to-read ROI report in hand. It's valuable not because the ad is near "trusted content" or a "flagship something-or-other," but because it has real, proven value.
When there are so many publishers now out there willing to take 25 cent CPM's or less for their advertising (in other words, admitting their inventory is virtually worthless), it makes you wonder what some publishers are selling, exactly... and why it's even considered advertising.
Now I must go raise my bid on that "go-to" keyword. We'll gladly pay $85 CPM. I'll keep the CPC confidential, though. :)
Posted by
Andrew Goodman
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D'oh!
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