In December, according to AdRoll’s Q1 2024 State of Digital Marketing Report, there was a 7% uptick in CPM (Cost per thousand impressions). AdRoll, a marketing and advertising platform, released the Q1 2024 edition of its State of Digital Marketing Report, a summary drawing from marketing trends and insights consolidated from more than 20,000 online businesses. It offers ideas to help digital marketers improve marketing ROI. The report points out some highlights:
2024 Q1 Report Highlights
- Advertising CPM in Q4 2023 was 23% lower than a year ago, the smallest year-over-year decline since Q2 2023. Adroll particularly noticed an unusual 7% uptick in CPMs from November to December, signaling advertisers were getting more optimistic toward the end of last year.
- The U.S. economic data released at the beginning of 2024 showed a rapidly improving U.S. economy. The January U.S. consumer sentiment index reached its highest level in two and a half years.
- Advertising spending is expected to grow significantly in 2024. Insider Intelligence predicts advertising spend growth in 2024 will be the second highest since 2011, and AdRoll customer survey indicates 40% of marketers plan to increase their advertising spend in 2024.
- According to the AdRoll survey, the average brand uses six advertising channels. Search, display and Meta’s channels are the top choices for advertisers.
- In order to optimize campaign performance across multiple channels, marketers need to understand the customer journey and use a cross-channel attribution tool to measure the performance of their campaigns accurately.
- It’s important for marketers to invest in both present and future revenue growth. By taking a full-funnel approach to advertising, marketers can build a revenue pipeline for sustainable growth.
“AdRoll customer survey indicates 40% of marketers plan to increase their advertising spend in 2024. Search, display and Meta’s channels are the top choices for advertisers.”
The Dynamics of CPM in Digital Marketing
In digital advertising, the cost per thousand impressions (CPM) is akin to the pricing of any commodity, determined by the interplay of supply and demand. Acting as suppliers, publishers offer advertising space on their websites or mobile apps to reach the desired audience. The transaction of digital ads occurs through auctions, facilitated programmatically by Supply Side Platforms (SSPs) and Demand Side Platforms (DSPs), representing publishers and advertisers, respectively. Fluctuations in CPM are primarily influenced by variations in advertisers’ demand for ad space, as the supply of advertising space remains relatively constant.
2024 Outlook: Rising Advertising Spending and CPM Rates
Finally, Vibhor Kapoor, president of AdRoll, said 2024 will witness a substantial surge in advertising spend, inevitably leading to increased CPM rates. However, the extent of this rise will differ significantly across various advertising channels. Marketers must prioritize audience targeting and engagement throughout the customer journey to maximize return on investment. By aligning spending with audience presence and behavior, marketers can build a revenue pipeline for sustainable growth.”
“2024 will witness a substantial surge in advertising spend, inevitably leading to increased CPM rates”
