Continued downward pressures on CPMs and CPCs are visible, and additional evidence comes from the 4th straight decline in CPCs for Google.

1. CPM and CPC
Pricing Trends
Dr. Augustine Fou
http://www.linkedin.com/in/augustinefou
October 19, 2012.

2. CPM Pricing Benchmarks
Display ad eCPM $1.06 March 2013
Mobile ad eCPMApril 2013 2013
Source: Turn, $0.72 March
Social ad eCPM $0.24 March 2013
Video ad eCOM $9.99 March 2013
October 19, 2012
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3. Display Ads
October 19, 2012
3

4. Display Advertising
Big Portals
Large audience
Publisher/portal
has more power
CPM
10’s of dollars
CTR
0.1%
Ad Networks
Facebook
Lots of long-tail
small websites
Massive number of
impressions
Advertiser has
more power
“Junk” quality and
super-low prices
1’s of dollars
0.01%
10’s of cents
0.001%
Shift allocation to get more impressions or lower cost
October 19, 2012
4

5. Display Ad Global eCPM
Display ad CPMs are in the $0.10 - $0.80 range
Source: Turn, June 2013
October 19, 2012
5

6. Desktop vs Mobile eCPM
Source: KPCB Internet Trends 2012
October 19, 2012
6

7. Display CTRs by Category
Source: MediaMind, April 2011
October 19, 2012
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8. Mobile Ads
October 19, 2012
8

9. Mobile Ad Global eCPM
Mobile ad CPMs are in the $0.10 - $1.00 range
Source: Turn, June 2013
October 19, 2012
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10. Mobile Ad CPM Trends
Source: MoPub Q1 2013
iPhone CPM $0.88
iPod Touch CPM $0.96
iPad CPM $1.16
Android tablet CPM $0.53
Android CPM $0.50
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11. Mobile Ad CTR Trends
Source: MoPub Q1 2013
iPhone CTR 1.7%
iPod Touch CTR 2.2%
iPad CTR 2.5%
Android tablet CTR 1.0%
Android CTR 1.1%
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12. Search Ads
October 19, 2012
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13. Search Ads, SEO
Paid/ SEM
Organic
For long tail,
descriptive
keywords
For brand terms
and expensive
keywords
CTR
1 - 5%
13 - 21%
CPC
$1 - $10
FREE
Source: SlingShot SEO
Shift allocation to get more clicks at lower cost
October 19, 2012
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14. Search CPCs by Category
Source: TBG Digital July 2012
October 19, 2012
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15. Search CTRs (natural, paid)
Most users
click on
natural search
results
15-25% of clicks
1-9% avg CTRs
75-85% of clicks
13-21% avg CTRs
Source: go-Digital Blog, July 2012
Natural results
have 10x the
click through
rate of paid ads

16. Impact on Google
Source: BusinessInsider
Google Earnings Call
October 18, 2012
1. Aggregate paid
clicks growth
declined
2. Cost-per-click
growth remained
negative for 4th
straight month
October 19, 2012
16

17. GOOG: -9% on earnings
51% higher
revenue
($11.33B from $7.51B)
BUT still …
5% lower
profits
($3.01B from $3.18B
October 18, 2012
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18. Social Ads
October 19, 2012
18

19. Social Ad Global eCPM
Social ad CPMs are in the $0.10 - $0.50 range
Source: Turn, June 2013
October 19, 2012
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20. Facebook Ad Benchmarks
NOTE: these figures
refer to Facebook
display ads (by
category)
Source: WebTrends, January 2011
October 19, 2012
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21. Video Ads
October 19, 2012
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22. Video Ad Global eCPM
Video ad CPMs are in the $8 - $12 range
Source: Turn, June 2013
October 19, 2012
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23. Dr. Augustine Fou – Agency Czar
“I study digital marketing trends
and advise clients on pre-emptively
optimizing across channels and
within channels.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou
Slideshares: http://www.slideshare.net/augustinefou
LinkedIn: http://www.linkedin.com/in/augustinefou
October 19, 2012
acfou@mktsci.com
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