An interesting post today on Techcrunch suggests that we should kill the CPM to save the online advertising industry. As the argument goes, by using CPM as a prime measurement of campaign ROI advertisers and publishers are missing the real goals of relevance, engagement and conversions, and consumers suffer as a result.
I agree that CPM is not a good primary measurement of advertising success, even for brand awareness only campaigns. However do we really have to ‘kill it’ to make people stop using it that way? I argue that we shouldn’t, and certainly not on mobile. Here’s why:
- CPM is still a viable and useful measure, if not the primary one. As a publisher selling ad space on your site, you want to maximise revenue for that space. Each page view needs to deliver great content and a great monetisation opportunity if that’s your business model. So you want to track if those extra pages of content you add are bringing in the money or not. As a ‘brand awareness’ advertiser where your goal is to create long term loyalty to your brand, CPM is a good measure to compare the cost of advertising across potential publishers you may choose for a given campaign …. assuming you also know how to factor in the relative quality of each publishers’ sites and the relative value of each publishers’ audiences.
- Market dynamics will rectify the situation anyway. If you sell only on CPM, or you buy only on CPM, without looking at other measures of engagement and action, then you will lose out. Poor content sites with lots of ads will command lower and lower CPMs because advertisers value your disenchanted audience less. Poorly targeted, cheap CPM campaigns will cost you more in the long run as an advertiser because they won’t have the desired effect. Users will vote with their mouse/thumb and avoid sites with poor content and ad overload, and go to better quality sites where there are fewer, more relevant ads.
- On mobile, the above applies, except even more. You cannot fill a mobile webpage with more than 2 or maybe 3 ads maximum (for a long page) without really annoying the visitor. Their perception of your site degrades in proportion to the volume of advertising you fill it up with. The quality of your mobile pages needs to be even more engaging because of longer download times and the small screen size.
It’s true that CPC and CPA are becoming more useful measures for ‘performance advertisers’ who want their ads to generate immediate action and response. But CPM still has its place as a useful measure, and should not be so easily dismissed.
Tags: CPM, measurement, premium