How much does an advertiser pay for 1,000 web impressions? In 2012 the average was $2.66 in the US, according to Forrester Research, and the research firm expected it to rise by about 76 percent to $4.68 by 2017.
Why CPMs were expected to rise
Forrester's forecast, based on a survey of 232 marketers, counted text ads, banners, rich media and video together. The good news for publishers was the higher price. The bad news was the reason: the industry was moving to the viewable impression standard, where advertisers pay only for ads that actually appear on screen. For many publishers that meant fewer billable impressions, which could cancel out part of the CPM gain. Forrester also cut its forecast for overall online ad growth to 17 percent a year, down from 20 percent.
Exchanges and real-time bidding
CPMs on ad exchanges were expected to grow faster, more than doubling from $3.17 to $6.64 in the US by 2017, as marketers adopted real-time bidding. Forrester estimated exchange spending would reach about $8.3 billion and 30 percent of US display spend, up from 16 percent. Television, for comparison, cost advertisers around $24.68 per thousand viewers according to Nielsen. ZenithOptimedia forecast that online would account for 59 percent of global ad spending growth over three years.
Where the averages hide the real money
Averages mix cheap remnant inventory with premium placements. In practice the spread between verticals is huge. A general entertainment page might clear a dollar or two, while a page in a competitive, high-value niche can clear many times that. Online gambling is one of those niches: a depositing casino player or sports bettor is worth a lot to the operator, so CPM, CPC and CPA bids are high wherever betting is legal. See iGaming CPM and CPC rates for how that looks country by country.
Related: how to calculate an average CPM rate and banner advertising effective CPM cost.
