Thursday, April 23, 2009

How Much Ads Cost

APRIL 23, 2009

Online ads “all over the place” says one executive.

Data from Jefferies and Company puts a hard number on the cost of traditional ads in 2008.

The firm estimates that broadcast TV had the highest cost-per-thousand (CPM) rate of $10.25, with syndicated TV at $8.77. Magazines, cable TV, newspapers, radio and outdoor advertising round out the space.

As for spending in the online sector... it’s a little more complicated.

“It is all over the place,” said Rino Scanzoni of GroupM in a MediaPost article.

“It is very hard to say this is what the average is. The average is made up of some big, big swings, depending on what you are buying.”

A few companies have tried to measure those swings.

For display advertising, Credit Suisse estimated that in 2009 the average CPM will be $2.39, down from $2.46 in 2008.

Pricing for video ads also varied depending on where they were located on-screen. Online video consultancy LiveRail estimated that overlay ads ran CPMs of $7.40 and in-stream ads were priced at $16.40 in Q4 2008. AccuStream iMedia Research put the average 2008 figure as high as $35 for premium preroll online video ads.

As for paid search, JPMorgan projected that for every 1,000 searches, $75.33 would be generated from ads in 2009.

Getting a complete picture of CPMs for the online advertising space is difficult—especially when published rate card prices don’t always reflect reality. But averages and estimates reveal important trends and tendencies.

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