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Deciding Between CPM and Time Based Sales

by John Ramey on October 29, 2008

A few weeks ago we announced CPM based direct sales for web display ads. We wanted to give some advice on which method was right based on a seller’s needs. This was our comment:

If your site either has high traffic numbers or a large amount of flow through traffic, CPM is usually better. If your site has a more tightly defined / niche audience or your traffic is very sticky / recurring, then selling in blocks of time might make more sense.

We recently stumbled upon another blog’s post that described this choice and included numbers from a survey, and we wanted to share it with you. From the post:

Direct ad space sales bring in some of the highest revenues but also require the greatest effort to arrange. In Scott’s recent interview, Jeremy from Shoemoney describes how he sells ad space on his blog using a fixed price monthly tenancy rather than using CPM, CPC or CPA rates.

We surveyed the OpenX community to find out how they package their inventory for direct ad sales:

  • 45% charge on a CPM rate (payment based on the number of times the ad is displayed)
  • 38% sell a tenancy (payment based on displaying ads for a fixed period of time, regardless of the number of impressions)
  • 13% charge on a CPC rate (payment based on the number of visitors who click on the ad)
  • 4% charge on a CPA rate (payment based on visitors which click on an ad and go on to purchase a product / service)

via OpenX blog

Tagged as: cpm, direct sales, display, web

{ 2 comments }

Thomas George November 6, 2008 at 2:03 pm

I believe CPP (cost per placement) ads should be explored for the benefit of small and local websites. It provides a small banner for branding and text keywords which will provide SEO. This is exactly how the local newspapers have been selling display classified ads. A lot of revenue can be created for these kinds of ads. It can be charged months, quarterly or yearly.

John November 11, 2008 at 3:39 am

Thanks Thomas, that’s a great point. I’ve definitely seen some of the self serve options (like at NY Times) use that method.

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