Schedule a Demo
Does My Company Subscribe?
Jessica SanfilippoGroup Media Director360i
As group media director for digital advertising agency 360i, Jessica Sanfilippo oversees multiple areas of media planning including display, search, mobile, paid social and video. Sanfilippo recently spoke with eMarketer’s Lauren Fisher about multiple factors influencing desktop display CPMs, including programmatic advertising, a push toward more premium ad formats and the eventual switch to a viewable CPM.
eMarketer: What are some of the broader trends you’re seeing regarding display CPM price changes today?
Jessica Sanfilippo: In terms of the media we’re buying, it’s almost as if there are two opposing forces at play right now. One is sort of this programmatic pull, where dollars flowing into more direct-response-oriented mechanisms are driving prices down. What’s balancing that is the second force, though, which is this push toward premium.
Specifically, we’ve seen a lot more emphasis in the last couple of years on things like native advertising and premium ad space that are designed to enhance publishers’ real estate and drive up prices.
Overall, we’re seeing digital CPMs going up, and I think part of that is due to a stronger focus on performance. Our advertisers and clients are more comfortable with higher CPMs if they can see the back end working for them and you can prove the value of these placements.
Now that we have even more ways of monetizing branding display through enhancements in research technology, brand studies and different types of interaction metrics, there’s more of a comfort level in going premium.
eMarketer: Beyond native advertising, what other ad formats do you see commanding premium CPM prices?
Sanfilippo: Anything custom—that’s always been the case, and that will continue to stand the test of time. Video CPMs are still pretty high, and the IAB Rising Stars prices are too, though we’re actually seeing Rising Stars costs stabilizing a bit. But I think that’s reflective of a typical shift that happens any time a new format enters the market. As we get more comfortable with an ad unit size, we tend to see CPMs stabilize as newer, larger or more buzzworthy ad formats are introduced.
eMarketer: You mentioned programmatic as the lowering pull on CPM prices, but what about the emergence of more premium-type programmatic buying channels such as private marketplaces or programmatic guaranteed? Are these areas exerting any influence at all on programmatic CPMs?
Sanfilippo: Yes, the private marketplace is definitely changing things a lot, and so that’s why we’re talking about the dual forces affecting CPMs right now. In a way, programmatic has largely been populated by the long tail. But that’s changed with the emergence of private marketplaces and more premium publishers willing to open up their high-profile inventory onto the exchanges. Those prices on the private exchanges will be somewhere between the open exchange and what you would get if you went publisher direct, so we are definitely seeing a shift.
eMarketer: How is viewability and this impending switch to a viewable CPM affecting things?
Sanfilippo: When we do tack viewability onto campaigns, we actually see a substantial uptick on CPMs. Time will tell if the performance merits that. There’s going to have to be a tradeoff when it comes to paying for impressions that are not in view and considered wasteful, and there may be some negotiations required as CPMs are marked up to make sure they’re done in a reasonable manner.
Overall, I think it’s going to be a big year for viewability to be put into practice. I wouldn’t be surprised to see the cost-per-viewed impression take off. If it does, I think it will create a ripple effect and pave the way for a digital GRP [gross rating point].
We’re seeing a lot of movement on the digital GRP front, and with the NewFronts and AOL and others announcing models that more rapidly and easily integrate TV efforts through the use of GRPs and Nielsen’s Online Campaign Ratings (OCR) product, that will also enhance that opportunity.
This will happen on a more microbasis—CPMs will continue to remain king for now in the display realm, and I don’t see that changing much, at least in 2014. But I do think you’ll see the digital GRP begin to become more of a buy model and not just a concept, especially among more brand-centric TV advertisers that want to integrate their efforts more seamlessly.
eMarketer: What about audience data? Is the incorporation of either first- or third-party data having a significant effect on CPM prices?
Sanfilippo: Audience data is definitely part of the same trends we discussed earlier that are driving prices up. We’ll see CPM upticks as much as three times the amount of the base media. So in some cases, the data is being valued at higher levels than the media itself—that has a pretty profound effect on CPMs.
And I don’t see this slowing down. I think part of what makes it expensive is that the access to this data is still kind of limited and complicated, depending on the technologies available. I would say the thing that could even costs out would be the ubiquity of data and technology. So as data partnerships become more pervasive, that could drive costs down.
eMarketer: At this point, are the majority of your buys leveraging some form of data?
Sanfilippo: I would say a very large majority. For most that are bought programmatically, we are laying on some type of data enhancement to our placements to improve targeting or improve the performance. And for custom native opportunities, we’re applying a lot of data to that.
Join eMarketer for a free webinar:
Thursday, October 27, 1pm ET
Space is limited.
made possible by
You've never experienced research like this.
Nearly all Fortune 500 companies rely on us.
Inquire about corporate subscriptions today.