Just as Effi­cient Fron­tier reg­u­larly does with search CPC (cost per click) trends, we have decided to begin report­ing on dis­play CPM (cost per thou­sand impres­sions) trends.

Fig­ure 1: Dis­play Trends

In Jan­u­ary, CPM lev­els on Dis­play fol­lowed search CPC trends and are down Month Over Month (MoM) but more sim­i­lar Year Over Year (YoY).

In dis­play, it is often the case that CPM lev­els become more volatile at the end of quar­ters as many Dis­play adver­tis­ers have to adjust their spend to meet pre-determined Quar­terly bud­gets. Addi­tion­ally a lot more inven­tory is sold on a guar­an­teed basis in Decem­ber, par­tic­u­larly the more pre­mium place­ments, mean­ing less of that type of inven­tory avail­able in the bid­d­a­ble mar­ket.  All of this makes CPM lev­els a lot more var­ied and com­bined with the fact Decem­ber is a low sea­son for tra­di­tion­ally larger Dis­play spend adver­tis­ers like Finance, this may be influ­enc­ing the large MoM differences.

Direct response adver­tis­ers have to be more vig­i­lant and sophis­ti­cated in opti­miz­ing their cam­paigns dur­ing these peri­ods as they expe­ri­ence the unique nature of the Dis­play mar­ket­place. We would expect CPM lev­els to con­tinue to rise through Q1 2011 with more vol­ume from cur­rent dis­play adver­tis­ers and newer entrants to bid­d­a­ble dis­play con­tin­u­ing to enter the market.

Chris Jacob