The IncredibleShrinking CPM 3 strategies for better ad rates

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We’re all painfully aware that banner click-through rates have slid steadily over time, and there’s reason to suspect the same verdict (eventually) for native ads. And lower CTRs mean lower CPMs. The tendency is to blame ad blindness for all of this, but that misses the point.

Poor execution of banners has led to this decline and poor execution of native ads will destroy the new format, if we fail to understand the core issue of relevance.

Aligning ads with relevant editorial makes sense for readers. Vogue maga-zine has done it for 50 years. Smart, sponsored content works, when the content matters and the creative matches with audience intent.

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When television launched, advertisers re-purposed creative from existing mediums (print, billboards) for their ads. Today we know this doesn’t work, ZPUJL�[LSL]PZPVU�PZ�H�KPќLYLU[�RPUK�VM�TLKP\T�^P[O�KPќLYLU[�]PL^PUN�OHIP[Z��

Stop us if you’ve heard this before, but the web is also a new medium with KPќLYLU[�]PL^PUN�OHIP[Z��@L[��MVY�[OL�TVZ[�WHY[��^L�Z[PSS�NS\L�WYPU[�HKZ�PU[V�little rectangle ad positions.

But look what happens when advertisers align with relevant content. The

New York Times’� ZWVUZVYLK�WVZ[� MVY�5L[ÅP_»Z�Orange is the New Black

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Aligning with relevant content means higher engagement for brands.

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Eyetracking studies show that today’s web reader is a consumer on a mission, not a casual “lean back” reader.

Increasingly, people make decisions by seeking out data. Look at the suc-cess of Nate Silver’s FiveThirtyEight. The trend is toward pure data and away from traditional opinion or commentary.

A second trend is presenting stories as lists. “Listicles” are everywhere from the Economist to Facebook. Buzzfeed has built an empire on them.

Why lists? The New Yorker recently reported on psychologists discovering that humans were happier when the conscious work we had to do was SPTP[LK��3PZ[Z�WYV]PKL�H�KLÄUP[L�LUKPUN��ZVTL[OPUN�[OH[�PZ�HSS\YPUN�HUK�YLHZ-suring to our brains. Eye-tracking proves this out — we modern readers like our lists.

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Providing data in list formats, or even better — in slideshow list format – proves irresistible for readers. Once editorial is proven engaging, brands can align with it.

Today, aligning is sophisticated. Programmatic advertising has grown from a simple bid system to “ad stacks” — a series of ads displayed in appro-priate context at appropriate times during a user session.

The chart on the right shows an ad stack built on the new measurement of viewability. Standard banners are rotated with higher premium positions: guaranteed in-view ads, and ads aligned with user engagement.

When these contextual ads appear, click throughs jump from the usual .05% to over 2%. Like the good old days.

This CTR increase, combined with the ability for advertisers to choose positions based on viewability and engagement means one thing for CPMs: Finally, they are headed north.

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