CPM stands for cost per thousand impressions. Every time your banner loads on a page, that is one impression. If a visitor moves to another page and sees it again, that is two. A thousand impressions might mean a thousand different people, or a few hundred people seeing the ad more than once.
What is an average banner CPM?
In 2014 the average CPM for online display ads was about $2.80, and Forrester expected it to reach $4.68 within three years. The rise came from a change in what counts. Originally a banner registered an impression whenever it loaded. Under the viewability standard, it counts only when it actually appears on the user's screen. Ads at the bottom of a page that nobody scrolls to stop counting, which pushes the price of the ones that are seen.
What is a visitor worth to you?
Before buying banners, work out what each visitor is worth. If 100 visitors from an ad bring 5 buyers who spend $500 in total, each visitor is worth $5. Paying one cent per visitor gives a huge return; paying $5 per visitor breaks even. Everything between is a business decision.
Online casinos and sportsbooks do this calculation better than almost anyone. They know their average player value by country and channel, so they can bid aggressively on banners that bring depositing players. It is why gambling banners often outbid other advertisers on sports and entertainment sites. For the publisher's side of that equation see gambling ad networks for publishers.
Banner CPM secrets
- Analyse click-through rate first. A low CTR makes CPM buying look expensive. Fix the creative before blaming the price.
- Test sizes and positions. 300×250 and 728×90 above the fold usually perform best.
- Target tightly. A smaller, relevant audience beats a big, random one.
- Match the landing page. The page must deliver what the banner promised.
- Use frequency caps. After a few views, extra impressions rarely help.
For publishers, banner space is also a way to sell traffic directly. Joining a banner network that tracks and controls placements, in exchange for a share of revenue, is the simplest way to start. See where to find prospect advertisers for selling direct.
