Rising CPM: What It Means for You

2025 CPM Prices in Digital Marketing

Dezember 4, 2024

How Inflation is Driving Up CPM Prices and What Marketers Can Do to Adapt

You’ve likely encountered this situation: you go to fill up your car at the gas station, only to find fuel prices have increased by 25%, or you walk into your favorite coffee shop and notice your usual latte now costs 15% more.

Even your monthly streaming service bills have crept up, along with the cost of your favorite restaurant meal. 

Just like these everyday expenses, the cost of digital advertising is also climbing, with CPM prices increasing steadily as inflation affects every aspect of business.

CPM (Cost Per Mille) prices have surged by 2% to 10% since 2021, making it more expensive to get the same visibility. The inflation you’re feeling at the gas station is also hitting your advertising budget—and if you don’t adapt, those rising costs can take a big bite out of your marketing ROI.

Inflation: The Rise of Marketing Costs

In 2023, inflation continued to ripple across industries, causing many businesses to reevaluate their budgets. 

Digital marketing is one area seeing noticeable changes, especially in Cost Per Mille (CPM) and Cost Per Click (CPC) pricing. 

Marketers worldwide are grappling with rising CPM rates across advertising platforms—from social media to programmatic advertising — and adjusting to a new landscape where higher ad costs are the norm.

This article examines how inflation has affected CPM and CPC prices across social media, affiliate marketing, banner display advertising, and programmatic advertising. You’ll also learn how you can adapt and maintain campaign profitability despite this new reality, where advertising costs are rising up to 10% compared to 2021.

Just in 2023, global media inflation was as high as 4.4% in online media. Online Video continues to experience higher inflation than Online Display, thanks mainly to the rising popularity of streaming services. Print is showing some signs of recovery after a difficult 2023, although this recovery is by no means spectacular.

Inflation’s Impact on CPM Prices Across Digital Advertising

CPM, or Cost Per Mille, refers to the price an advertiser pays for 1,000 impressions of an ad. The higher the CPM, the more an advertiser spends to achieve the same reach, making rising CPM rates a critical issue in digital marketing.

Various factors have contributed to the increase in CPM prices, including inflationary pressures such as rising wages, higher operating costs, and increased demand for online advertising.

Between 2021 and 2023, many advertising platforms reported that their CPMs had increased by 5% to 10%, a significant change that is putting pressure on marketing budgets. This uptick is a direct result of broader economic inflation, and marketers are feeling the effects across multiple channels, including social media, affiliate marketing, banner display advertising, and programmatic advertising.

Banner Display Advertising: Costs Rise as Competition Increases

Banner display advertising, though considered a traditional format, remains a core strategy for many brands. However, inflation is also impacting CPM prices for display ads, especially in premium ad placements.

Rise in Display Ad CPMs

The average CPM for display ads in 2021 ranged between $2.80 and $3.10 across most major ad networks. By 2023, the average had increased to between $3.50 and $3.80, reflecting a nearly 10% rise. This inflationary pressure is attributed to increased competition for ad space, as well as higher production costs for display creatives.

Brands seeking prime ad real estate on high-traffic sites are facing tougher competition, and advertisers are being forced to pay more for placements that offer guaranteed impressions in valuable online real estate.

Affiliate Marketing: Narrowing Margins Due to Rising CPM and CPC

Affiliate marketing has long been seen as a cost-effective way to drive traffic and conversions through performance-based models. However, rising CPM and CPC prices are putting pressure on affiliates, leading to an increase in fraud.

In fact, a 2024 Sumsub report showed that iGaming affiliate fraud increased by 64% YoY. 

As inflation has driven up the cost of buying traffic, the price advertisers are willing to pay for affiliate-generated impressions has also increased. Reports from affiliate networks show that CPM rates for premium affiliate placements have increased by as much as 12% between 2021 and 2023.

This has led to a reduction in profitability for some affiliates who rely on high-traffic, low-cost models. For example, an affiliate who once paid $3.50 CPM for traffic acquisition might now be paying $4.20, squeezing their margins if conversion rates and payout rates don’t keep pace with rising costs.

Many advertisers within iGaming, fintech, and e-commerce has noticed how this has recently led to low quality traffic. As affiliates start struggling with higher costs, many have implemented tactics such as ad stacking, brand bidding, and invalid clicks.

Programmatic Advertising: Navigating CPM Inflation

Programmatic advertising, known for automating the buying and selling of digital ads through real-time bidding, has also experienced inflation-driven increases in CPM prices. As more brands shift towards programmatic to streamline ad placements, costs in this space have soared.

Data Processing and Storage Costs

One of the key drivers of inflation in programmatic advertising is the increased cost of data processing and storage. Programmatic relies on vast amounts of user data to make bidding decisions in real-time, and the cost of storing and processing this data has risen due to inflation.

The average programmatic CPM in 2021 was around $6.50, but by 2023, it had increased to approximately $7.50. This is a direct result of both inflation and the growing complexity of data-driven advertising. More data means better targeting, but it also means higher costs, both in terms of technology and operational expenses.

Increased Demand for Programmatic Inventory

Another factor contributing to rising CPMs in programmatic is the increased demand for programmatic inventory. As brands have realized the value of real-time bidding and highly targeted ad placements, competition for ad space has increased, pushing prices higher. According to eMarketer, the global programmatic ad spend grew by 20% from 2021 to 2023, which has further tightened the supply of available impressions, driving up CPM rates.

Adapting to Higher CPM Prices

With inflation pushing CPM prices higher across all digital marketing channels, marketers must be more strategic in managing their budgets. Here are some actionable steps to adapt to rising CPM prices:

1. Refine Audience Targeting: As CPM prices rise, so does the importance of reaching the right audience. By using advanced audience targeting tools, marketers can focus their campaigns on the most relevant users, ensuring that each impression has a higher likelihood of converting. Platforms like Facebook offer granular targeting options based on demographics, interests, and behaviors, which can help optimize ad spend.
2. Invest in Creative Optimization: High-quality creative assets can significantly boost engagement and conversion rates. Testing different ad formats, visuals, and messaging can improve the performance of your campaigns, maximizing the value of each impression.
3. Implement Data-Driven Optimization: Analyzing campaign performance in real-time allows marketers to adjust their strategies quickly. Use data analytics tools to track CPM fluctuations and campaign performance, and adjust your bidding strategies and budgets accordingly.
4. Focus on Lifetime Value (LTV): Instead of focusing solely on the cost of acquiring new customers, marketers should also consider the lifetime value of those customers. By aligning your advertising efforts with customer retention and long-term value, you can justify higher upfront CPM costs.
5. Explore New Channels: Rising CPM prices in popular platforms may make alternative or emerging platforms more attractive. Consider exploring new ad formats like TikTok, Snapchat, or even podcast advertising, where CPM rates may be lower, and competition less intense.

Wrapping up – Inflation’s Effect on Digital Marketing 

Inflation has brought significant challenges to digital marketing, particularly in terms of rising CPM prices across social media, affiliate marketing, banner display advertising, and programmatic advertising. 

As costs rise, marketers need to refine their strategies to ensure that they are getting the most value out of every advertising dollar spent.

By optimizing audience targeting, focusing on creative quality, leveraging data for real-time optimization, and exploring alternative channels, marketers can adapt to the new landscape of higher CPM prices and continue to drive results. While inflation is pushing costs higher, smart marketing strategies can help mitigate these impacts and deliver strong returns on investment.