Forum Moderators: skibum
Just wondering what an average CPM rate is and how is the best way to calculate it?
My site is a technology/home entertainment website if that factors into it at all.
Any pointers would be appreciated :)
I think you are asking, how much money might you expect to earn from advertising, or perhaps, what rate should you ask from advertisers?
The answer is, "it depends." And it depends on a whole lot of different factors, so many that there are entire books written on this subject.
In general, there are two kinds of advertisers: a small group who pay for an "audience," and a much larger group that pay for "results." Quite frankly, I view the first group as idiots, but it's important to recognize that they often pay more than the second group. Alas, you need to spend more staff time to sell ads to that first group.
You mentioned that this is a "technology/home entertainment website" but that's really not detailed enough. If your web site provides focused information that helps consumers make a buying decision, then you might be able to get a very high rate for advertising, because your visitors are at the "moment of decision" which is exactly what advertisers want: the consumer has read through the wonderful information about HDTV options at your web site, and he's decided that he's going to buy a Panasonic QX-3 40" HDTV, and the advertiser sells Panasonic QX-3 40" HDTVs at competitive prices. Bingo.
Alas, most of us can't deliver that kind of visitor to our advertisers.
So, let's look at CPM rates. I'll start by disclosing that in 1998-1999, I was earning rates of $50 to $100 per 1,000 adviews for some pages on one of my web sites, with an overall average of more than $10 CPM. That was an absurdly high rate, and I knew it, but I had multiple advertisers bidding for a limited number of adviews, and I loved it. Since I knew it was absurd, I sold the business, and it was no surprise to me when that advertising marketplace collapsed in 2000. That was an extremely targeted web site, which had earned a high level of trust from its visitors, who were in a key segment that advertisers wanted. (Ironically, the site was about internet advertising, and the audience was "web publishers seeking to make money from advertising.")
The world has changed, and I think that in 2006, such a site would be lucky to earn $2 to $3 CPM, on average, and that level of earnings would require a substantial expense to maintain the editorial quality and currency of the site.
Quite frankly, since 2001, I haven't sold any of my own ad space -- I used ad networks to sell most of my inventory in 2001-2004, and in the past couple of years I have used Google AdSense ads as the only form of traditional "advertising" on my new sites.
During July 2006, I earned an average "eCPM" (effective cost-per-thousand adviews) of $2.88 from Google AdSense. But that average might be deceptive: one of my sites earned $4.87 on average, and another earned $0.83 CPM on average.
But that's not all. Many of my web sites contain "affiliate links" in addition to "traditional" advertising, and I earn hundreds of dollars per month in affiliate earnings from those same sites.
I've had clients who run AdSense ads and earn an effective CPM (eCPM) of $10 or more; I've talked with many webmasters who earn an eCPM from Google AdSense that is less than 25 cents. Almost always, this depends on the nature of the traffic, inclding the mtoivation and "mode" of the visitor.
So, the answer to your question is, "it depends."
Definitely given me a lot to think over, i appreciate the help.
