With so many marketing channels available to publicize products and services, advertisers must choose the right outlet to ensure they get the best return on investment. Many businesses use banner ads to drive traffic to websites. Also known as display ads, this form of advertising appears somewhere on a webpage in hopes of grabbing the consumer's attention. The rate to run a banner ad is based on a factor known as cost per mille (CPM). Mille is defined as 1,000 impressions and an impression is a page view by a consumer.
The average CPM rate for online display ads was $2.80 as of the date of publication. Those rates may reach an average of $4.68 over the following three years, according to Forrester Research, a global research and advisory firm. The jump is largely due to a potential shift in what is considered an impression. Originally, an ad racked up impressions each time it appeared on a web page. In the future, however, the ad will have to be visible on the user's computer screen to count as an impression. If, for example, the user doesn't scroll down on a web page, ads at the bottom wouldn't be considered an impression, as they are now.
Premium or Not Premium
The placement of a banner ad can significantly affect its cost. Premium placement, for example, provides the most visibility as the ad appears “above the fold,” which means no scrolling is needed for users to see it. The average CPM rate for premium placement was $10.40 as of this article's publication date. Non-premium ads had an average CPM rate closer to $1.90, a significant difference in cost.
With an increasing number of consumers using mobile devices to access the Internet, businesses must now have a mobile site designed for smaller screens. That provides another opportunity to sell ad space to advertisers because CPM is based largely on the access device. For example, the rate for an ad viewed on a Windows Phone was $0.20 as of 2012 while the CPM was $0.59 on a Symbian and $0.64 on a BlackBerry. The highest rate was for iPhones, with a CPM of $2.85.
The type of website can also affect an ad's CPM. The highest rates were found on business and finance sites, with an average of $6.15 as of publication. Technology-related sites came in second at an average CPM of $4.56. In third were home improvement and architecture sites at an average $3.68. Gaming sites brought in some of the lowest CPMs at an average $1.27.