Advertising Digital Publishing
3 mins read

Which ad optimization factors are impacting CPM rates?

Report highlights advertising performance insights from 6,000 publishers across 60,000 sites

The new Advertising Performance Benchmark report from Sovrn, a Colorado-based ad-tech firm, delivers a ‘snapshot’ of advertising performance through the last quarter of 2021 and into the first half of 2022. The report highlights a return to seasonality in CPM factors, but also a common group of ad optimization factors that “consistently have an outsized impact on CPM rates.”

Takeways

  • Sovrn compiled the benchmark report using data from its own advertising network, offering insights gathered from 25 billion daily pageviews generated across 60,000 websites managed by more than 6,000 publishers. The firm presents the report as a reference guide for publishers to judge how their properties compare to industry averages.
  • Headline numbers, based on CPM analysis of 136,000 ad units, show a seasonal increase in CPMs towards the end of 2021. This drops off again early in 2022, with recovery slower than expected because of the challenges in the global economic landscape.
  • The report spotlights poor macroeconomic conditions; from new Covid variants leading to fresh waves of infection; the war in Ukraine and its impact on global energy and food supplies; and rising inflation globally. Against that background it shows CPM ranges fluctuating between $1.11 in January 2022 to $1.54 in June.

Ad optimization factors

Accepting that there is little that can be done to counter the effects of wider macroeconomic conditions on advertising rates, Sovrn has also looked at ad optimization factors publishers can use to influence their CPMs.

These fall into three broad areas:

  • Ad attributes – did a user see the ad; were they engaged; did they interact with the ad?
  • Page attributes – the environment in which the ad was served; was it high or low?
  • User attributes – who was the user; are they addressable; are they part of the target market?
  • Viewability is spotlighted as the key driver of ad performance and, ultimately, CPM rates. According to Sovrn’s data, with average viewability currently around 52%, ads with 80%+ viewability demand 3x greater CPMs. Highly visible inventory can can expect a 61% increase in CPM values.
  • Sovrn also focuses on viewing time, noting that the IAB’s viewability standard of 50% of ad pixels viewable for one continuous second are probably not enough to communicate a promotional message. Sovrn’s own attention metrics show that publishers can expect an 85% CPM uplift from 12 seconds of engaged time. The report says:

The longer an ad is visible, the greater the chances it will be seen — and command higher CPMs.

Page attributes

Clearly advertisers seek to reach consumers in the right environment at the right time. The report highlights that site traffic, used as a proxy for site quality does not correlate with the level of attention captured. Instead, page content is a more meaningful variable.

The data shows that higher dwell times – the length of time a user has the page open – and page engagement – the length of time the user is active on the page – do not necessarily deliver higher CPMs. However, scroll depth – the percentage of the page that is viewed – does have a notable impact, according to the report. Where users are consuming more than 80% of page content, publishers are seeing a doubling of CPMs.

User Attributes

Reaching the right users is also crucial and privacy challenges have made the long-term future of microtargetting unpredictable. Finding a solution to identifying and targeting prospective customers post-third party cookies is very high on the agenda for marketers and ad buyers.

Buyers are looking at Universal IDs (UIDs) as a possible alternative and the report says 61% of all bid requests now include UIDs. With Safari and Firefox, browsers that don’t support third-party cookies, where traffic had a UID match, it saw a 71% uplift in CPMs. The report highlights this as a ‘huge opportunity’ for publishers to monetize audiences using cookie-less browsers.

In the programmatic advertising marketplace, increasing the supply of addressable audiences could influence how buyers both place value on and pivot their spend to reach a greater target audience

Publishers should be exploring today the opportunities that alternative browsers offer to unlock more revenue from their existing audiences.

This piece was originally published in Spiny Trends and is re-published with permission. Spiny Trends delivers updates and analysis on the industry news you need to stay on top of if you’re running a media and publishing business. Subscribe to a weekly email roundup here.