Display Ad CPM / RPM

[Darth]

Any other display publishers getting absolutely CRUSHED the last few days?
At first I thought I wasn't getting too effected by the crisis, but CPMs in last few days have been brutally low.
Now my network is telling me they expect the Q1 drop off to be even worse. Hate to see how low we could go.
Assuming that you have already considered alternative monetisation methods several times, are you just planning to ride it out?

PS: I have a smaller Amazon affiliate site that is absolutely killing it this month, opposite of my display sites. Weird.

 

[Potatoe]

To piggyback on this topic a bit from the other side of the coin...

To the folks who are buying ads, have your bids dropped, is there a firesale on paid traffic atm?

 

[Ryuzaki]

My CPMs are down to about 60% of what they normally are. Amazon hasn't suffered a single bit. Thankfully my traffic is up substantially to help offset the "losses." It's still great money, crazily enough. I wish things hadn't tanked. I'd be stacking some major cheddar right now.

I'm sure it'll drop some more entering Q2, but there will also be a floor to it. I don't imagine it getting into the single digits. Companies still have to operate and advertise. There will be enough bidding pressure to keep us in play.

 

[secretagentdad]

Time to swap to traffic buying biz models.

I'm jacking up marketing spend and competing aggressively on price.

HMU if you got traffic for b2b tools.

 

[Ryuzaki]

@Darth, my network is saying to expect Q2 (starting yesterday) to be like a 2nd January this year - A drop back to the start of Q1 numbers, which are traditionally the worst of the year.

It sucks, but since there's nothing we can do, I'm trying to reframe it positively. I want to publish my damn ass off, outsource content and write it myself, spend a lot of time formatting posts and pressing publish. That will position us to crush it when things bounce back, which they will with a fury I think once everyone feels safe again.

My suspicion is that companies aren't going to just throw their hands in the air and say "well shit, there went 4 months of the year and now our numbers are down." They're going to blast most of the budgets they held back to try to make up the losses. I think this holiday season we're going to see some astronomical CPMs.

The best thing we can do is start getting into position NOW. We need to be blasting out content like mad men, identifying high volume terms that we're close to winning that would takeover if we hit it with even one exact match anchor, etc. There's a lot we can do to boost our traffic before then, and then we shall feast at the table for kings by the end of the year!

 

[Darth]

@Ryuzaki Yep I am taking the same approach Traffic numbers are through the roof and rankings going up, so when advertisers turn the taps on again it will be time to make bank!

Also my 1 April stats are out and yes, it's bad, very bad. Like 50% lower than end of March, which was already 1/3 of normal CPMs bad. Just lucky traffic is up.

 

[Ryuzaki]

I don't imagine it getting into the single digits.

Oh boy. We're at the turning point for sure. As the virus peaks, CPMs are hitting their deepest trough. I predicted we wouldn't see single digit CPMs, but it's getting awfully close. Yesterday I finally hit the $10.xx range. I'm hoping that's the floor and I never see a $9.xx day.

You hanging in there, @Darth?

 

[mrodriguez27]

Same experience as you guys, I'm getting completely crushed. End of march was bearable, april is being horrible. If I had these traffic stats with normal CPM's... one can dream. Shame I sold my last Amazon site back in January, 80% of my business is display atm.

But as @Ryuzaki pointed out, I think Christmas will be strong and even if it's not, it's bound to go back up more or less the same way it came down, so I'll just double down.

 

[Calamari]

My average page RPM over the last 7 days is in the single digits. I'm talking adsense specifically. For comparison I'm usually in the mid to high teens.

It also looks like the company I sell leads to does not plan to send me a check for leads I sent them in Febuary so I doubt I'll be seeing a payment for March leads either.

I might switch to a larger network and hope I start getting paid or just go with more adsense since I'm confident they'll keep paying.

 

[miketpowell]

I hate to have a pessimistic view but I don't see the CPMs going back up until weeks after the lockdowns are over. That puts us at least Q3. But really I would expect them to drag well into 2021 really.

The bottom line is most companies cut marketing first thing in downtimes, it's actually pretty stupid but that's what ends up happening. Also regardless of what happens, there is a huge efficiency loss to the entire economy from this.

@Ryuzaki - Sorry man but I don't think it's gonna be a very big holiday season this year. But I do think those with capital to invest this year will be the big winners in the future. I think it will be a year to advance a ton for those that have capital pretty much.

But I've been pretty dead wrong about things before. I mean I thought it was stupid of Apple to try to make a phone so WTF do I know about predicting anything

 

[MrMedia]

I think it will be a year to advance a ton for those that have capital pretty much.

This is me right now. My assets are all monetized with display ads so I'm basically writing this year off at an overall drop of -60% vs 2019. Sucks but I have a ton of captial from recent sales and good biz moves.

@miketpowell - when you say advance do you mean buy up cheap / distressed web assets and ride the storm with them until better days arrive in 2021/22?

Seems very risky to buy assets in a declining world of RPMs in the hope that the RPMs come back one day and also that while waiting for that day Google does not wipe out that asset, assuming it is dependent on SEO.

Interested to hear thoughts.

 

[miketpowell]

@MrMedia - Well you don't make huge returns without taking the risk right?

But yes buying properties, buying links and just growing customer size in general. I have a project this year that because of the RPM changes I will make much less per user, but I can also drive the users for less money now as well so it will balance out. The real benefit will come after 2020 when I have more total users than I would have if 2020 was "normal" for the same level of investment this year.

In Las Vegas in 2009, you could buy houses for 40k that by 2013 were worth 250k and 2018 350k. The reason those houses were 40k is in 2009 in Vegas you couldn't even rent out a property, so many vacant houses people would just squat wherever they could find, no reason to pay someone. It scared enough investors to drop the price that low, those with guts made some huge returns, eventually. First, they had to pay 40k and property taxes/insurance/HOA maybe even for 1-3 years then clean up the property all with no revenue yet.

There will probably be plenty of brands that go from being cash flow positive to cash flow negative overnight. Negative cash flow businesses are worth effectively zero in a world where capital is in demand. Buy something for 2mm that would have sold last year for 25mm and it could be worth 0 or 50mm by 2022. Some companies that build large authority content sites with borrowed money will not be able to service their debt load or refinance with the revenue drops they are facing.

Plenty of risk in buying assets that literally have negative cash flow, but that is how you buy something that 2 years from now nets what you bought it for monthly.

 

[Ryuzaki]

@miketpowell, I'd hope that's not the case with CPMs. I do think we'll see a faster recovery than we've seen historically since this was an artificial (as in not economically-created) recession.

There is the conundrum of the 2-3 months that millions will have gone furloughed or unemployed. There will be a loss of income that will impact spending for a substantial number of people. At the same time, I tend to think that the people it impacted aren't necessarily the highest spenders anyways, and that those people will compensate for themselves and their children for missed "grand" birthdays and holiday events and to make up for their suffering during quarantine.

There's also the case that most industries aren't going to continue suffering. It will get right back to business as usual. Some classic examples and explanations are those of movie theaters and restaurants. Nobody will go see two movies or go eat two meals at once to make up for the lost time. That revenue is lost in those industries.

But then you have ones like the automotive industry. If you needed a car, you may have had to delay your purchase, but you'll still make that purchase once this blows over. That money isn't lost to those companies, only delayed. Their 3rd and 4th quarters are going to look mighty fine.

And again, I think many companies, especially big ones, aren't going to be okay with posting crappy quarters past where they have to, and they may even try to make up for the bad Q2 by competing with each other with advertising come Q3 (maybe) and Q4 (hopefully). And that can create enough bidding pressure to at least keep CPMs up, perhaps way up.

I agree with the sentiment that advertising gets cut first, but I also know there's a lot of absolute killers out there that know that when everyone else recedes (and stops advertising or slows down) you go balls to the wall to dominate every space possible. There's enough killers in big killer companies that will all act on this that may cushion or even elevate CPMs.

We'll see. I'm 100% speculating. There's possibly fewer industries negatively affected as there are neutrally or positively affected. And the negative ones are going to be clamoring for sales ASAP.

 

[Ryuzaki]

I'm back with some actual information. The IAB (Internet Advertising Bureau) polled around 400 big boy buy-side decision-makers about their changes to ad spend. You can find the full report here.

A whole bunch of it says what we know:

• 24% paused all advertising.
• 46% are adjusting their rates in Q1 & Q2.
• Traditional media is taking a slightly harder hit than digital.
• Impact on Q3 and Q4 spending will be more modest.
• Expect a 20% decrease in Upfront spend vs. original plan.
• Digital ad spend is down 33%.

The good news is most are "undecided" if they'll continue to pause or decrease spend in Q3 and Q4. Meaning most are ready and willing to hit the ground running for the most part. Here's a graphic related to that:

67% say they don't know how they'll respond yet. 8% say they won't decrease at all. 25% that said "yes" are only looking to dip to 75% in Q3 and then 88% in Q4. But if things go well that's likely to change and they'll be a lot less cautious.

The question is, what will make them feel less cautious? They answered that:

​

Basically, they want to see quarantine and shelter-in-place initiatives go away and then businesses open back up. Duh. But the other stuff is that they want to see the public's confidence return, like going to sporting events, traveling, and going to concerts. Great news is they want to see the stock market rebound, which it is already doing.

Some people aren't being optimistic, which will change over time. I think this quote reflects the truth, no matter what comes out of their mouths otherwise:

​

If things go good, they'll respond in real time. All of their own predictions and felonious mopery just reflects their moods in this current snap shot in time (3/27/20). I'd reckon they're already feeling more positive as we're seeing curves flatten all over the world and more realistic data coming out and understanding how some numbers are being artificially inflated, etc.

I think we have a real great shot at an okay Q3 and an astounding Q4.

 

[Darth]

You hanging in there, @Darth?

Yes, although RPMs are down even more. Traffic is still fantastic and some recent SEO campaigns are paying off with ranks too. But RPMs are brutally SLAUGHTERED for me right now so earnings overall are down maybe 50-70%.

I hate to have a pessimistic view but I don't see the CPMs going back up until weeks after the lockdowns are over. That puts us at least Q3. But really I would expect them to drag well into 2021 really.

I agree with this, I think we are in for several months of pain and a very slow recovery.

I do think we'll see a faster recovery than we've seen historically since this was an artificial (as in not economically-created) recession.

I don't think it matters how it was created. A lot of the world's commerce is shut down as a result.

But then you have ones like the automotive industry. If you needed a car, you may have had to delay your purchase, but you'll still make that purchase once this blows over.

No one will have money to buy cars after this. A lot will be out of work or on reduced wages.

Some of my comments spill over to other threads, but for me personally, this got a whole lot more real over the last two weeks and I am a lot more bearish than ever in terms of the overall world economy and RPMs/recovery.

 

[Potatoe]

Let's see who can take the crown for having the lowest RPMs during this downturn. Minimum 10k impressions (just so it's not brand new sites that are still warming up to a network), on a per-site basis instead of your whole account, so choose your lowest-earning property.

I'm getting $0.19 rpm from media.net on a site that gets about 1500 impressions per day - can anyone "beat" that?

 

[miketpowell]

The big problem IMHO is the job losses. Hiring and growing, building, training teams takes time. You can shut down a warehouse in a day and layoff all the workers but it's gonna take months(maybe even years) to get the warehouse operating at the same level of efficiency again if it cannot just rehire the exact same people again.

Economics is based on momentum. Once the ball stops it's hard to start again and the ball has never "stopped" this much and this suddenly before. It will create so much interesting data to study after all this is over.

 

[MrMedia]

I worked in an ad agency for 13 years including the 2008 crash, handling multi million $ ad campaigns for major public and private sector clients.

The first thing to go is always advertising. It is the exact opposite of what brands should do, but it is what it is.

There is zero chance that things are going to bounce in time for Q4 this year. Q4 NEXT YEAR maybe.

I had a major exit underway so it is effectively dead right now.

Currently down around 50-60% on a few Million pages views per month.

I expect that I will be holding on to this website for another 2 years at least based on recovery starting next year and needing 12 months of solid revenue data for a proper valuation for a sale.

5 years exit in the making on pause for another 2 years. Thanks China.

So for me it is back into growth mode for this site and then push for a sale in 24 months time.

Paid traffic, funnels, Pinterest and social, email, etc.

Basically all the things I was putting off doing on this site I will now do to increase the overall valuation when I do exit in 2 years time.

 

[Ryuzaki]

I'm getting $0.19 rpm from media.net on a site that gets about 1500 impressions per day - can anyone "beat" that?

It's looking like $11.00 +/- 20¢ is going to be the bottom for me. Thankfully Amazon is doing better than ever for me with higher conversion rates than normal. For context, I should be around $19 - $20 RPMs on just the ads right now. Sucks but thankfully $11 is still doable since I've managed to double my traffic in the past month.

 

[miketpowell]

So I just got word from a little bird on what is further compounding RPM issues. Pretty much all networks that take a non-disclosed rate are increasing that rate ie Google.

Google does not want to lose revenue, so they are making sure publishers are going to take a bigger hit by giving a smaller % out of net advertising payments.

This is internal only at this point and a story Google does NOT want the public to know about.

So while total ad revenue might go down 20%, that might end up lowering the RPMs paid out to publishers much more.

 

[secretagentdad]

So I just got word from a little bird on what is further compounding RPM issues. Pretty much all networks that take a non-disclosed rate are increasing that rate ie Google.

Google does not want to lose revenue, so they are making sure publishers are going to take a bigger hit by giving a smaller % out of net advertising payments.

This is internal only at this point and a story Google does NOT want the public to know about.

So while total ad revenue might go down 20%, that might end up lowering the RPMs paid out to publishers much more.

Whats with all the network effect companies lately.

First Amazon now Google.

I guess that means there is an opening in the market.

 

[Calamari]

So I just got word from a little bird on what is further compounding RPM issues. Pretty much all networks that take a non-disclosed rate are increasing that rate ie Google.

Google does not want to lose revenue, so they are making sure publishers are going to take a bigger hit by giving a smaller % out of net advertising payments.

This is internal only at this point and a story Google does NOT want the public to know about.

So while total ad revenue might go down 20%, that might end up lowering the RPMs paid out to publishers much more.

Adsense shows the revenue share percentage that we get in our account settings. Am I interpreting that number or what you're saying incorrectly?