Advertising CPM Sees 33% Decrease YoY

After a turbulent time during which Apple’s App Tracking Transparency Protocol coupled with the EU’s new GDRP regulations wreaked havoc with the advertising ecosystem, it seems like the industry is getting a well deserved break. Data derived from the State of Digital Marketing report released by Adroll revealed that advertising CPM saw a massive 33% decline in the first quarter of 2023 as compared to the first quarter of 2022.

With all of that having been said and now out of the way, it is important to note that website visitors also increased by 13% in the same time period. This can make ads even more valuable than might have been the case otherwise. Cheaper ads will be seen by a greater number of users, although the data might also be misleading if taken at face value.

The fourth quarter of 2022 saw an abnormally low CPM which dragged the average down. Also, while site visits are certainly looking up, conversion rates saw a decline of 19%. This seems to suggest that fewer users are clicking on ads, and it also explains why CPM might be seeing its lowest levels in a long time.

Low conversion rates are bound to bring down CPM because of the fact that this is the sort of thing that could potentially end up making ads less valuable. However, the numbers still show some strong movement that could give the industry some much needed relief with all things having been considered and taken into account.

With ad costs reaching two year lows, marketers will be looking to capitalize on the current state of the industry. Some experts are predicting that CPM might rise over the course of the rest of the year, but in spite of the fact that this is the case, the cost per mille will still be lower than what was seen during the aftermath of the pandemic in 2021 and 2022.

All in all, the aftershocks that ensued after the multiple obstacles faced by the industry seem to be subsiding somewhat. It will be interesting to see what the future holds for digital ads and the platforms that use them.

Read next: Search Ad Conversion Rates Drastic Decrease Report; CPR Goes Up in 2023
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