What’s a Good CPM?

December 24, 2018

Advertising Media Industry Insights

One thing RCG often hears from clients is “what is a good digital CPM?” Like most marketing questions, the answer depends on a wide range of variables. The most important of which may be where and how the creative will be placed.

Are we working with a programmatic vendor across the entire web? Or is this a direct buy on one specific site? Or maybe we’re utilizing a DSP (demand-side platform) with managed placements? Each of these scenarios can all have a significant impact on the CPM you are going to ultimately pay.

In the digital world, brand safety is a key concern and should be treated with the same level of attention as in more traditional media placements. If you wouldn’t want your ad to appear on a billboard above an unsavory retail store with blacked-out windows, imagine your digital ad on a website with similar content. While most of your audience would probably understand your placement isn’t the same as an endorsement, is that a risk you want to take?

Like most things, you get what you pay for in digital media.

Regardless of the vendor or how it is placed, the cheaper the CPM, the lower value websites your ad will be appearing on. If a CPM for video is $3.00 versus an industry average of $15.00, that video is probably being shown on sites that are $1.00 or less per ad placement. That means the content environment likely isn’t great, could be unsavory, and probably generates low traffic.

High-quality content sites charge more for a reason, and that’s where the quality traffic, and your customers, probably are.

So how does an advertiser avoid ads on sites they would be embarrassed to show their mother?

  1. Ensure it’s not “too cheap.” Currently, a typical video CPM should be $15.00 or more. Display ads should not have a CPM of $2.00, but closer to $5 or more. If the CPM is cheap, the ad is going on low-quality sites.
  2. Consider letting RCG work direct. It’s more complicated, but giving your agency the budget to invest in direct relationships with websites means your ads show on their site only. Local TV stations, newspapers, Facebook, etc. all have the ability to place ads directly on their page. Your budget will reflect more hours to place the buy, but, you know precisely what website your ads are appearing on.
  3. Create a whitelist. Programmatic vendors and DSPs can create brand safety mechanisms to keep you on the sites you would be proud to be associated with, but, it never hurts to give them some ideas on what you are comfortable with. RCG can help you create your own listing of acceptable sites and restrict your ads to be served there.
  4. Request reporting before you start. Before you sign on to any digital plan, see what reporting they will provide after the campaign ends, and if possible, get a blinded sample. At RCG, in addition to delivery and engagement reports, we also require a report showing the geographies we served to, websites they served on, and the target audience. This is one more touchpoint to give you peace of mind that your advertising dollars were served appropriately.

There are many factors to consider when choosing a digital vendor, but RCG has the know-how and relationships that are tested and re-tested with vendors across the digital spectrum. Contact us today for a digital plan that meets your needs, keeps your brand safe and stays within budget.