• by Joe Mandese  @mp_joemandese, July 31, 2013

It appears that some equilibrium is starting to emerge in the online display marketplace, and that relative cost efficiency of exchange-based media buys has eroded dramatically. While it’s not exactly clear why this has happened, and what the major drivers are, new data from Aggregate Knowledge shows that relative cost efficiency of exchanges has dropped below its indexed average for all sources of online display inventory for the first time since it’s been tracking it.

“Comparing costs across channels in the second quarter, we see CPMs, CPAs, CPCs starting to normalize across channels,” the second quarter 2013 edition of AK’s quarterly Media Intelligence Report finds. “Exchanges which have had an advantage in the past two quarters are now in line with networks and portals.”

Actually, it was online ad networks -- not exchanges -- that experience the greatest disruption during the quarter, with the average cost of a network buy decline 67% from the first quarter report.

AK did not release year-over-year data, and only reports estimates going back to the fourth quarter of 2012, so it is possible that there could be some seasonal fluctuations in marketplace demand at play here, but if you take the quarterly sequential patterns at face value, there indeed appears to be a trend of the most efficient and commoditized display inventory sources beginning to “equalize” with the inventory sold directly by big publishers (ie. the portals).

Here’s how the quarterly cost trends break down by type of inventory:

       Online Display Cost Index

Source: Aggregate Knowledge. Index methodology not explicitly disclosed, but described as a “comprehensive cost measure, encompassing eCPA (cost per one acquisition or conversion), eCPC (total data cost/total number of clicks), eCPM (total media cost/total number of impressions x 1,000).