Industry News Planning Strategy

Chart of the Day: Display Pricing

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Boy, the Canadian online ad environment sure is different from that of the US.

This Chart of the Day story shows how the average CPM in the US for most display campaigns averages $2.43.  Facebook CPM rates average around $0.56.

Yowza!

The Canadian Experience

In Canada, the running range for most display rates is a minimum $5 CPM (although admittedly, I could get lower with ad networks) to about $20 for most standard display campaigns.

There are a lot of reasons why there’s such a drastic difference between the two markets, but the core rationale is related to competition.  In Canada, most of the ‘mainstream’ publishers are held by a handful of owners.  When I speak with reps from these publishers about what keeps them up at night, the response is usually ‘ad networks’.  In other words, it’s the ad networks that are chipping away at their business and their revenue base.

This should come as no surprise.  Ad networks represent the most effective way for most ‘average’ advertisers to get online with display advertising.  In most cases, ad networks offer self-serve environments.  An example of this is the Content Network of Google AdWords product.  All you have to do is create an account, submit billing info, create a couple of basic ads and you’re off !

In fact, when I use Google, I’m able to keep my average CPM more in line with what the US average is.  The down-side for clients is that the sites may not be ‘premium’ or recognizable web sites.  The same goes with a few other self-serve platforms, including Facebook and LinkedIn.

Is MSN Trying to Deflate the Market?

It seems curious that Keith Lorizio, Head of Sales in the US, would be complaining about Facebook, particularly given that Microsoft owns a chunk of this popular social network.

One might think he’s trying to call out how cheap Facebook is (possibly to attract more small business owners and advertisers?) and widely used the platform has become (as part of an effort to enhance the overall appeal of Facebook?).

Regardless, it’s important to note that the net effect of all of this is that lower costs of advertising, combined with better targeting and other tracking tools make online advertising much more feasible for your average small advertiser than it used to be.

That can’t be all bad, can it?