Reasons for Rise in CPM Prices – Interview with Scott Neslund

Analyst firm eMarketer recently interviewed Centro’s EVP of media services, Scott Neslund. Here’s an excerpt:

eMarketer: What are some of the overarching trends you’re seeing in the way of display ad pricing – specifically, as it relates to the CPM pricing model?

Neslund: When we look at our database going back to 2007 to today, we see overall CPMs down in the digital marketplace by more than 30%. That drop might seem dramatic, but there are three factors that we’ve seen driving down CPMs.

The first is the recession – we never saw a large recovery coming out of the recession because by that time, there was more inventory and more choice for media buyers, particularly in the long tail.

The rise of real-time bidding (RTB) is the next factor. Its influence started in 2010 and 2011. We’ve seen a good 10% to 15% drop in CPMs as a result of RTB.

The third factor is we’re seeing digital buyers utilizing a more efficient mix of digital properties than in the past. They’re using more lower-priced inventory.

To read more Scott Neslund’s views on CPMs and the online ad industry, log into www.emarketer.com (subscription required) and download the report, “Reasons for the Rise in CPM Prices.” Stay tuned for eMarketer’s full analysis on CPM trends later in October.