New Service to Track Average CPMs by Site

Media forecaster SQAD will soon launch its first Internet-oriented service, WebCosts, to provide advertisers with an average CPM per Web property.

The service will function much the same as SQAD’s broadcast product. The Tarrytown-NY-based company will anonymously collect pricing data from advertising agencies and clients, then use that data to calculate an average cost-per-thousand views for each Web site. Both advertisers and publishers can use that data as a negotiating tool, according to the company.

The goal for WebCost is ” to serve as the industry standard, a real-cost resource that will provide � a market perspective” for both the buy and sell side of the Web ad community, said SQAD President and CEO Neil Klar.

“There is no better way to determine real value than like-to-like cost comparisons,” he added. “When it comes right down to it, cost comparison is an undisputed truth.”

The service is now being tested with data contributed from a control community, and is slated to launch in Q3 of this year.

SQAD (pronounced “squad”) has long provided a similar service for broadcast media, and hence believes it is the natural choice to provide it for the Web. The company maintains that having an industry standard for Internet ad buys will not only help sales on an individual basis, but foster greater Web ad buys as a whole by providing a greater comfort level for advertisers and publishers. SQAD claims it will be the first company to compile and provide such data.

Jupiter Research Senior Analyst Emily Riley, who was personally briefed on the new service by SQAD, said the idea could be both a boon and a hindrance to Web advertisers and publishers.

“In theory I think the idea will be very popular with advertisers because they will finally get a general understanding of how more or less expensive different sites are,” she said.

“For publishers,” she added, “it could be a nightmare.” The problem, she said, is that an average CPM for any Web site is naturally misleading, because no site offers a universal price for every placement. For example, a Web site with an average CPM of $10 could have a $50 front-page CPM, but $5 placements elsewhere.

“It’s not a really good negotiating tool because some sites have a very long tail of remnant content,” she said. “I would say that it’s going to be very interesting to see how many people sign up and cooperate.”

Nonetheless, she praised the idea for its originality and ambition “It really seems like the first time I have heard someone trying to talk about CPM numbers” in this manner, she said. “Ad Relevance from Nielsen talks about total spending from the advertiser side, but not the publisher side.”