Cheap Social Media Inventory A Drag On CPM Prices

Comscore released some interesting data yesterday, indicating that cheap social media inventory is causing a significant drag on overall CPM prices. According to the Comscore numbers, the average CPM – without social media inventory included – stands at around $2.99 per thousand impressions. When social media inventory is included the price drops 19% to $2.43.

I’m not aware if figures are available for Europe – but it would seem a race to the bottom is happening in the display market as even greater amounts of cheap social media ad space are made available. Here’s the thing though, social media ad inventory continues to perform poorly (albeit for a couple of DR successes). And the brand safety element – something which Europeans are rightly obsessed with – is still a primary concern. This is some consolation for publishers for the moment. The other big issue facing pubs is that Facebook’s famed “social graph” continue to offer unbelievable targeting. If it starts to deliver better performance for advertisers, budget will inevitably flow to Facebook. The supply issue will continue to knock the stuffing out of CPM pricing - but context and brnad safe environments should stem the tide of bottom feeding social nets.

The graph below illustrates the disparity beween socila media and content sites (note the x-axis data is CPM pricing and this in US dollars):