This document discusses strategies for improving ad rates and reversing declining CPMs. It argues that poor ad relevance and execution have reduced click-through rates and CPMs over time. The document recommends that advertisers align ads more closely with relevant editorial content in order to increase user engagement. When ads are contextually relevant, click-through rates can jump from 0.05% to over 2%, improving CPMs. Programmatic ad stacks that rotate ads based on viewability and engagement can further increase rates.

1. The Incredible
Shrinking CPM 3 strategies for better ad rates
A P A S S F A I L W H I T E P A P E R

2. T H E I N C R E D I B L E S H R I N K I N G C P M
A P A S S F A I L W H I T E P A P E RA P A S S F A I L W H I T E P A P E R
We’re all painfully aware that banner click-through rates have slid steadily
over time, and there’s reason to suspect the same verdict (eventually) for
native ads. And lower CTRs mean lower CPMs. The tendency is to blame
ad blindness for all of this, but that misses the point.
Poor execution of banners has led to this decline and poor execution of
native ads will destroy the new format, if we fail to understand the core
issue of relevance.
Aligning ads with relevant editorial makes sense for readers. Vogue maga-
zine has done it for 50 years. Smart, sponsored content works, when the
content matters and the creative matches with audience intent.
HotWired.
Vogue’s

3. T H E I N C R E D I B L E S H R I N K I N G C P M
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When television launched, advertisers re-purposed creative from existing
mediums (print, billboards) for their ads. Today we know this doesn’t work,
Stop us if you’ve heard this before, but the web is also a new medium with
little rectangle ad positions.
But look what happens when advertisers align with relevant content. The
New York Times’ Orange is the New Black
(http://nyti.ms/1wqrn34). And Hinge’s sponsored post on eligible New
Business Insider last
month (http://read.bi/1AWfFEK).
Aligning with relevant content means higher engagement for brands.
Business Insider

4. T H E I N C R E D I B L E S H R I N K I N G C P M
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be compelling editorial.
Eyetracking studies show that today’s web reader is a consumer on a
mission, not a casual “lean back” reader.
Increasingly, people make decisions by seeking out data. Look at the suc-
cess of Nate Silver’s FiveThirtyEight. The trend is toward pure data and
away from traditional opinion or commentary.
A second trend is presenting stories as lists. “Listicles” are everywhere
from the Economist to Facebook. Buzzfeed has built an empire on them.
Why lists? The New Yorker recently reported on psychologists discovering
that humans were happier when the conscious work we had to do was
-
suring to our brains. Eye-tracking proves this out — we modern readers
like our lists.
Buzzfeed’s

5. T H E I N C R E D I B L E S H R I N K I N G C P M
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Providing data in list formats, or even better — in slideshow list format –
proves irresistible for readers. Once editorial is proven engaging, brands
can align with it.
Today, aligning is sophisticated. Programmatic advertising has grown from
a simple bid system to “ad stacks” — a series of ads displayed in appro-
priate context at appropriate times during a user session.
The chart on the right shows an ad stack built on the new measurement of
viewability. Standard banners are rotated with higher premium positions:
guaranteed in-view ads, and ads aligned with user engagement.
When these contextual ads appear, click throughs jump from the usual
.05% to over 2%. Like the good old days.
This CTR increase, combined with the ability for advertisers to choose
positions based on viewability and engagement means one thing for
CPMs: Finally, they are headed north.
-
User loads page
User scrolls,
widget in view
User scrolls further,
widget not in view
User scrolls back,
widget in view again
User engages with widget
$1
$4
$1
$4
$10
$

6. T H E I N C R E D I B L E S H R I N K I N G C P M
A P A S S F A I L W H I T E P A P E R
is the most comprehensive
automated content creation and revenue-
generting platform available to media
companies today.
Contact Us
John Miller
miller@passfail.com