Right now, long-term (10 years) inflation is forecasted at less than 0.3%.  As long as inflation is very low and inventory growth continues to outpace advertisers’ budgets allocated to online advertising, then rates will decrease for CPM-priced ads.  Publishers need to create content acquisition models that will work with the current monetization available from ad networks.

Anecdotal evidence suggests that pure CPM-based buys across ad networks have decreased in favor of performance-based models (CPC and CPA, primarily).  For certain publishers this has caused a dramatic drop in the performance of their remnant inventory since the offers are much more heavily weighted to performance-based deals now (the CPM portion has dried up).

Our suggestion is to work on creating traffic that responds to performance-based ads (topical content that draws natural search traffic) and to cut costs if you are dependent on CPM ads.

This entry was posted on Friday, February 13th, 2009 at 7:00 am and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.