Online Video Advertising CPM Rates - Currently A Bargain for Advertisers

We already know that online video advertising vs. traditional banner display advertising is 4-7 times more effective for advertisers. So it stands to reason that publishers should be able to generate more revenue, and they do. But advertisers can look at this as a bargain because video advertising only costs 2-3 times more on average, for now.

There was a nice article from eMarkerter that highlights recent research comparing online video advertising rates across 7 select US web publishers for video ads vs traditional video banner ads. According to the IAB/Bain "Digital Pricing Research” report, CPMs for online video ads were approximately $43CPM on average, almost 3 times more than display ads which generate $15 CPMs on average.

You can see from the figure on the right however, that this varies from publisher to publisher. company A is charging almost 5 times the amount, while company G is charging less than a 50% premium. So for those advertisers that know where to advertise, the bargain can be even greater.

Additional research from The Diffusion Group demonstrates that professional video content and long-form video content currently get the highest CPM, with short-form and then user-generated video content to follow.

• User Generated Video Advertising - $15CPM
• Short-clip / Short-form Video Advertising - $30CPM
• Long-form Video Advertising - $40CPM

The same report states that CPMs for all three will rise gradually through 2013, to account for revenues predicted to reach almost $10 Billion in 2013. Get em while they're cheap!

As eMarkerter points out, there are a few caveats that are important to mention:

• Although the research shows average CPMS, most of these rates are derived from publisher's rate cards, and we know that not all advertisers pay full rate.
• Even though the ad prices may be accurate, these are still averages.

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