Stop Looking at CPMs for Health of the Industry

Posted by Darren on Nov 3, 2008 • (Comments)

It is worth noting that CPMs do not tell a full story regarding the health of the online advertising economy.  The pace of growth in the supply of Internet advertising inventory is simply faster than the growth in ad dollars spent.  As a result, CPMs are dropping in many areas.  If every site on the Internet doubled the number of ad units per page, as an example, CPMs would drop by half, though overall revenue would remain constant.  Hence CPM is a relevant metric, but not an overall indicator of market health.  Total revenue and ad spend are the correct indicators.  - Rubicon Project Ad Network Review and Forecast.

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  • kchmdj
    As a result, CPMs are dropping in many areas..................
  • kchmdj
    Hence CPM is a relevant metric, but not an overall indicator of market health................
  • kchmdj
    The pace of growth in the supply of Internet advertising inventory is simply faster than the growth in ad dollars spent................
  • t is worth noting that CPMs do not tell a full story regarding the health of the online advertising economy. ..........
  • As a result, CPMs are dropping in many areas. If every site on the Internet doubled the number of ad units per page, as an example, CPMs would drop by half, though overall revenue would remain constant. ...........
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