Analyze pricing trend reports

| Ad Networks + Ad Spending

Be careful when interpreting the pricing trend reports that some of the ad networks and other sources are publishing. Many of these reports are focused on subsections of the Internet and oftentimes are statistically not relevant due to sample size.

It is clear that marketers want to maximize ROI/efficiency, especially in a challenging economy. However, what makes viewing the Internet as a whole challenging is that there are few apples-to-apples comparisons. Every publisher, network, etc. is different.

Our internal research has shown that oftentimes the most expensive placements drive the best value, which is ultimately what clients are looking for. If a publisher reduces their sell CPM from $20 to $10, but increases the number of ads on the page from two to five, does that benefit the marketer? It allows the publisher to drive an increased eCPM of $50 from $40 (assuming complete sell out), while the marketer’s effectiveness is greatly reduced because there is more ad competition on the page.

My advice to marketers is to be aware of market and pricing trends, and avoid making rash decisions. While reducing one’s CPM by 20% may be attractive initially, the resulting 40% decline in performance will be counterproductive to your overall marketing objectives. Sometimes a price reduction is incredibly valuable, but from my experience, there are times when it has the opposite effect.


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