CPM Values Are at an All-time Low…Here’s Why

By Editorial Staff

What’s a CPM?

CPM, or Cost Per Thousand, is a marketing term that reflects the price of 1,000 advertisement impressions on a given website. For example, if a publisher charges $1 every 1,000 impressions an ad gets, its CPM is $1.00. The “M” stands for the Latin word “mille” which means “thousands”. This key performance indicator (KPI) is commonly used to price web ads and can be measured by its click-through rate (CTR).

How low have CPMs gotten?

From March 2018 to February 2020, the average CPM in the United States was $4.67. On Sunday, March 22, the average fell below $3.00 for the first time since then. Facebook, in particular, saw their average global CPM drop to an all-time low of $1.95. Similarly, their average CPM in the United States dropped as low as $2.65, according to Gupta Media’s reports.

The following is a graph of the daily average of CPMs in different countries around the world from these reports:

Daily Average CPM by country at all time low

For Facebook, this means their average CPMs, across the Facebook Ads marketplace, declined between 35% and 50%. This marks the largest CPM drop the social media giant has seen in its history.

Here are the day-by-day CPMs in the United States for Instagram and Facebook (according to Gupta Media):

DateFacebook FeedInstagram FeedInstagram Stories
Apr 15, 2020$0.98$1.45$0.96
Apr 14, 2020$1.33$1.57$0.86
Apr 13, 2020$1.23$1.26$0.96
Apr 12, 2020$1.06$1.16$0.91
Apr 11, 2020$1.22$1.27$0.92
Apr 10, 2020$1.25$1.66$0.96
Apr 9, 2020$1.27$1.65$0.93
Apr 8, 2020$1.16$1.54$0.88
Apr 7, 2020$1.14$1.35$0.77
Apr 6, 2020$0.92$1.29$0.80

So why have CPMs reached an all-time low?

An advertisement’s CPM decreases as its audience grows. When more people are online, an ad is exposed to a larger audience. With the Coronavirus outbreak in recent months, and people being forced to stay home, online usage has increased, reaching numbers never seen before.

According to Cloudfare CEO Matthew Prince, “This is the largest work-from-home experiment ever to be conducted in human history.” His company observed a 20% to 40% increase in daily traffic in addition to nearly a 20% increase in internet exchange points, which are locations internet service and content providers use to exchange data directly without a third party.

Looking at China’s experience with the coronavirus alone, the average user’s time spent online rose 20% during life in quarantine, and a similar increase is starting to take place in the United States. CPM numbers have seen around a 23% decrease in the last week, according to Primer’s figures. Some brands’ CPMs have even decreased up to as much as 40%.

What does this mean for advertisers?

While online usage is increasing during the COVID-19 pandemic, content creators’ advertising rates have plummeted. Although overall traffic has increased across the site by 15%, YouTubers claim the rates companies are paying to advertise on videos are dropping, reaching an average of 50% less than they were at the start of February.

Even YouTube channels that many would consider immune to a stay-at-home order are being negatively impacted. Video game content, which gained 13% more views across five major markets in Europe in March than the same time last year, is still experiencing drops in CPM, according to Tubular Labs.

These drops have left many YouTubers dumbfounded, watching their views increase while their average incomes fall. Hank Green, one half of the Vlogbrothers channel with 3.3 million subscribers, tweeted the following:

Hank Green influencer marketing tweet as a result of dropping CPM

Another popular YouTuber, who uploads drumming videos, said the following:

Drummer Boy tweets response to decreasing CPM numbers

It’s estimated that one in four brands and media buyers have stopped all advertising for the first half of 2020, with 46% cutting back on their ad spending, according to the Interactive Advertising Bureau.

According to their polls of approximately 400 media professionals, nearly three-quarters of media buyers, planners, and brands feel the coronavirus will have a larger impact on advertising than the 2008 financial crisis.

They also found digital ad spending is down 33% and traditional media has dropped 39%. A majority of advertisers are now focusing on mission-based marketing (+42%) and cause-related marketing (+41%).

The coronavirus has undoubtedly made its presence felt online, causing unprecedented jumps and declines in numbers across categories. However, one thing is certain: CPM values have reached an all-time low.

This article was written by Ryan Eaton

Take advantage of this low cost, high reward opportunity. Get started with us today!

Next Posts

Best Practices

Best Practices: TikTok Hashtags

Looking for the best TikTok hashtags for growth and exposure? Well, you’ve come to the right place. It is no secret that TikTok’s growth has been fast and furious. With over 800 million users, ...

How To

How to Go Viral on Instagram

Going viral on Instagram is a growing trend among Millennials and Gen Z. While this may seem unattainable to most, is it anything but a pipe dream. Social media has taken the world by storm…and ...

What are you searching for?

    Start a campaign with us!

    Submit the form below, tell us a bit more about
    your business, and we’ll be in touch shortly.
    Are you an Influencer? Sign up here

      We use cookies to help improve our website. By continuing to use this website, you agree to our use of cookies. Read More