5 Factors on How to determine CPM rates

<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody> <tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjArQFAgv6A5JkB4f-K5YPebRnQfF8ziRhGDw3nHHicLS1lFXfH4htFkcyntBhFvtrG9Or5jrrZa-byP9kvAkWvcf1irG7GnOPxLlxmsZegHsglMn-2wU4G7NCCD1N8dSMOBrdENE5b3jI/s1600/NewsBlogPNG.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="How to determine CPM rates" border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjArQFAgv6A5JkB4f-K5YPebRnQfF8ziRhGDw3nHHicLS1lFXfH4htFkcyntBhFvtrG9Or5jrrZa-byP9kvAkWvcf1irG7GnOPxLlxmsZegHsglMn-2wU4G7NCCD1N8dSMOBrdENE5b3jI/s640/NewsBlogPNG.png" title="5 Factors on How to determine CPM rates" width="640" /></a></td></tr> <tr><td class="tr-caption" style="text-align: center;">How to determine CPM rates</td></tr> </tbody></table> <div style="text-align: justify;"> How to determine CPM rates: This post is going to teach you how to determine your Advertising CPM rates using these simple 5 factors below.  Know how to determine your CPM rates if you use AdSense, Propeller Ads, Ad dynamo or any CPM Advertising Companies.</div> <div style="text-align: justify;">  </div> <div style="text-align: justify;"> An interesting article at TechCrunch: <a href="http://www.techcrunch.com/2008/04/07/pubmatic-data-suggests-small-sites-command-higher-rates-for-remnant-ads-than-large-sites/" rel="nofollow" title="Pubmatic Data Suggests Small Sites Command Higher Rates For Remnant Ads Than Large Sites.">Pubmatic Data Suggests Small Sites Command Higher Rates For Remnant Ads Than Large Sites.</a></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> I find it interesting seeing this cross-site ad monetization data, since it’s rare to get your hands on it unless you work for an advertising network. For people outside the advertising company, advertising CPM seem like black-boxes.</div> <h2 style="text-align: justify;"> How to determine CPM rates</h2> <div style="text-align: justify;"> At Revenue Science, a regular game of mine was to eyeball a site and guesstimate the CPM rate.</div> <div style="text-align: justify;"> A couple of the factors that I’d use:</div> <div style="text-align: justify;"> <br /></div> <ol> <li><div style="text-align: justify;">     Is the site “sticky” or is it a one-hit wonder (like a reference site)?</div> </li> <li><div style="text-align: justify;">     Is the site pretty general, or is it in a particular category (like cars)?</div> </li> <li><div style="text-align: justify;">     Who uses the site? Everyone (including international) or just US?</div> </li> <li><div style="text-align: justify;">     How dependent is the site on Google SEO versus a community site that draws people back?</div> </li> <li><div style="text-align: justify;">     How many pageviews does the site have? Is it a lot? Or is it a small amount</div> </li> </ol> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <strong>Easy to monetize, hard to monetize</strong></div> <div style="text-align: justify;"> For the people who are curious, this is the easiest to monetize:</div> <blockquote class="tr_bq"> <div style="text-align: justify;"> One-hit wonder site that exist in a particular category, are based in the US, and have lots of search traffic</div> </blockquote> <div style="text-align: justify;"> In particular, your site is likely to have high CTRs since people are in a “transactional” mode. If you have all of those, and have a ton of pageviews, then you’ll make a ton of money.</div> <div style="text-align: justify;"> The hardest to monetize?</div> <blockquote class="tr_bq"> <div style="text-align: justify;"> Highly sticky sites that are general (like communication), based 100% outside of the US/Europe/Japan, with lots of pageviews</div> </blockquote> <div style="text-align: justify;"> In a setup like this, not only are people unlikely to want to buy anything, even if they did, there’d be no way to make money off of this group.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <strong>Example categories of CPM rates</strong></div> <div style="text-align: justify;"> As a rough rule of thumb, I’d typically guess the following – these are very rough approximations, just to illustrate a couple points:</div> <div style="text-align: justify;">  </div> <ul> <li><div style="text-align: justify;">     Social sites (forums/chat/etc) without direct ad sales teams: <$0.25 CPM</div> </li> <li><div style="text-align: justify;">     Largely international sites: <$0.50 CPM</div> </li> <li><div style="text-align: justify;">     Medium-sized sites that use banner ad networks: <$1 CPM</div> </li> <li><div style="text-align: justify;">     Reference sites in a specific category: >$5 CPM or sometimes much higher, depending on category – we ran into home improvement reference sites that did $20 CPM</div> </li> </ul> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Because we were mostly dealing with so-called “remnant” advertising, these numbers are likely to be at the bottom of the range for these sites. That is, social networks might quote a CPM of $20 CPM, but what they really mean is that 1% of their inventory is sold at that, and the rest of the 99% is sold at <$0.25 prices.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> As you can see, as a website property, you fall into either of two categories:</div> <ul> <li><div style="text-align: justify;">    Horizontal sites used daily which command low CPM with huge pageviews</div> </li> <div style="text-align: justify;">  </div> <li><div style="text-align: justify;">    Vertical sites that capture user intent – often used intermittently (with lots of traffic from search) with high CPM and low pageviews</div> </li> </ul> <div style="text-align: justify;"> Horizontal sites, when scaled up to a large enough site, can employ direct ad sales teams that raise the CPM by a significant amount, but the entire process is demand-constrained.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Google is lucky to be both horizontal and vertical – it’s used everyday by people, but also captures user intent.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <strong>As stated before, social networks monetize poorly</strong></div> <div style="text-align: justify;"> Of course, sites with lots of pageviews are often ones that are general, are sticky, and have lots of context-less social content. </div> <div style="text-align: justify;"> Back to small sites versus large sites</div> <div style="text-align: justify;"> Now, the TechCrunch article discusses the idea that small sites monetize better than large ones. I think that’s actually a correlation rather than a causation. There are a ton of small sites out there, and much of their traffic comes from Google. It’s much harder to build a functioning social site where people coming back daily than a site where people occasionally stumble on it through their search engine.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> As a result, my guess is that the mindset of the typical user includes intent – and that makes all the difference.</div>

5 Factors on How to determine CPM rates

How to determine CPM rates How to determine CPM rates: This post is going to teach you how to determine your Advertising CPM rates usin...

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