Everything in online advertising revolves around one simple formula

i × c / 1000 = g

i = impressions
c = CPM (cost per thousands)
g = gross revenue

e.g.
100,000 impressions × 20 CPM / 1000 = $2000 revenue

I just wanted to write that down.

Monday, December 10, 2007 10:36am
Work

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4 comments

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WillR
12/10/07 11:02am

Justin, any idea what a baseline CPM is for a niche ‘blog (like an OP)?

justin
12/10/07 12:05pm

It all depends on where advertisers want to spend money (and how good your sales force is).

OP is an interesting beast given its local focus. The best bet would probably be to hire a sales associate/ad ops person familiar with local businesses (maybe someone coming out of a newspaper?) to sell the blog locally and coordinate deals with national remnant networks. That is if Ruby had any intentions of using OP to generate revenue. I’d guess it could get around a $4-5 CPM.

FM doesn’t really get involved with political blogs (apparently traffic is too seasonal and the advertiser dollars aren’t there), but I know BlogAds does. Looking at their site, I see DailyKos, Raw Story, and Talking Points Memo getting $2-5 CPMs.

Google Adsense tends to pull in eCPMs of $1-3. It’s “e” or estimated because of course Google pays by click, not impression.

There are a whole bunch of other ad networks that may offer higher CPMs (Tacoda, Blue Lithium, Right Media come to mind) in the $5 range.

Josh Myer
12/11/07 8:00am

This is true, but only for CPM ad networks. There’s also CPC and CPA out there. It’s an ugly space, where the existing practices don’t really make the best sense.

FWIW, TechCrunch’s CPM is measured in thousands of dollars. Niches are the place to be advertising.

(I was about halfway through building edgeio’s CPC infrastructure, with provisions for CPM, when the company went fizzle Friday. Now i’m in Rome for a week.)

justin
12/11/07 1:50pm

Aww shit, dude, I heard about edgeio, but didn’t make the connection. Shoot me an email when you get back from Rome. Or now. Or whenever.

Ha, yes of course. The original title started “Everything I do at work…” but I thought that hyperbole might be misinterpreted, so I let the pendulum of over-simplification swing the other way.