'USA Today' Gets $50 iPad CPMs
One of the big unanswered questions during the recent media frenzy surrounding the release of Apple's iPad was how much publishers will be able to charge advertisers for access to consumers using the coveted new device.
USA Today, the national flagship of the Gannett Co., is charging its inaugural iPad advertiser Courtyard Marriott a $50 CPM, per The Washington Post. That comes to $0.05 per impression, compared to less than $0.01 per impression for USA Today's Web site. Such pricing suggests the iPad may prove to be a lucrative new source of revenue for beleaguered newspaper and magazine publishers.
However, the question remains whether ads delivered via iPad-like devices will be able to offset huge continuing losses in print advertiser revenues.
Since peaking in 2005 at $49.4 billion, total newspaper ad revenues have fallen 44% to about $27.5 billion in 2009. Total online ad revenues have remained a small part of newspapers' bottom line -- just under 10% in 2009. The hope is that digital ad revenues will get a boost from mobile distribution via the new generation of e-readers.
Mobile ad networks have typically charged $10 to $20 CPMs for advertisers looking to reach consumers via ordinary mobile phones. Premium prices range $30 to $40 for mobile video and for particularly desirable cohorts, like iPhone and smartphone owners, super premiums of $50 for popular publications, in the case of USA Today.
WaPo reported that one mobile marketing company, Mobext U.S., said publishers are charging two to four times their typical online rates, -- generally under $10.
Separately, a recent report from Forrester Research estimated total e-reader sales at 3 million units in 2009 and projected another 6 million units sold in 2010, for a total of about 10 million units when 2007-2008 sales are taken into account.
If every single e-reader owner subscribed to a newspaper and saw 50 ads per month (the online average) -- producing a total 6 billion impressions per year, at an average CPM of $50 -- that would produce total ad revenues of $300 million.
Assuming a total 50 million e-readers sold by 2015, that comes to $1.5 billion -- a substantial sum, but a fraction of the $22 billion in print ad revenue lost from 2005-2009.
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