Video Ads Generate 3 Times The CPM of Banner Ads

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More and more, publishers are turning to ad networks to monetize unsold inventory. In fact, the use of ad networks has surged from 5% of total ad impressions sold in 2006 to 30% in 2007, according to the newly released “Digital Pricing Benchmarking Study.” So, are publishers turning more and more to video ad networks to monetize remnant video advertising?

First, lets take a look at the CPMs that publishers are generating for the different ad formats.

The study reports that video advertising generates 2-3 times the CPMs (costs-per-thousand impressions) display advertising sold by publishers as well as 20-30 times higher CPMs than display advertising sold through ad networks. This makes sense when you compare the effectiveness of video advertising to that of banner advertising.

Average CPMs provided to publishers according to the study:

• Average ad network inventory ~ $0.60 to $1.10 CPM
• Publisher sold display advertising ~ $10 to $20 CPM
• Video advertising ~ $40 to $50 CPM

In addition, the report highlights the fact that for the most part, video ad sellout rates are significantly higher than any other format due to their popularity. Because of this, none of the participants in the study were utilizing intermediaries or ad networks to monetize video advertising.

However, as online video consumption and online video content continues to grow, video ad networks like Yume, Adap.tv, and others, will have an opportunity to work even more with premium publishers and media outlets.

The Digital Pricing Study was developed as a benchmark to examine the impact of online ad networks on ad rates, profitability and inventory management for media companies (publishers) and it is available for free. Download the study on IAB.net

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About the Author - Mark R Robertson
Mark Robertson is the Founder and Publisher of ReelSEO, an online information resource dedicated to the fusion of video, technology, social media, search, and internet marketing. He is a professional online video marketing consultant and video SEO expert, popular speaker, and considered to be a passionate leader within the online video and search marketing industries. Follow Mark on Twitter (@markrrobertson), or Google+. - View All Posts By Mark R Robertson