Why Ad Rates Are Plummeting And What It Means For Publishers
The amount Web publishers can charge advertisers for every thousand impressions of their ads -- a rate called the CPM in industry jargon -- is off by about 20% industry-wide. Worse, that's with publishers only selling around 30% of their inventory, down from 60%.
Some say the ad networks are to blame. Essentially, the argument goes: Publishers can't sell out their inventory, so they turn to ad networks, which sell remnant ads at a 89% to 94% discount. Agencies and advertisers can't resist the discount and begin to buy their way onto premium sites through ad networks only. This drives down the amount of inventory publishers can sell on their own and increases their reliance on ad networks. The vicious cycle continues.
The message behind this argument is: publishers must ween themselves off ad networks or their ad rates will eventually crash 90%.
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