• by Wayne Friedman , April 22, 2015

New findings from Borrell Research say the average local media programmatic cost per thousand (CPM) is $3.88. The results were drawn from a survey of 154 ad managers from December 2014 through January 2015 -- with 44% from local broadcasting, 37% newspaper managers, and the remainder Yellow Pages and/or pure-play Internet companies.

“To make matters worse, 58.6% indicated that their average programmatic CPM was $3.00 or less,” the survey says -- but indicates the overall view of programmatic was a positive one for some 44% of respondents. The main upside: Increasing overall revenue. Other advantages -- greater access to quality advertisers, streamline ad operations, better value for customers, and cost savings.

On the down side, executives worried about “commoditizing” inventory, lack of experience, undermining direct sales relationships, and concerned that CPMs would decline.

Among those surveyed, Borrell says combined companies represented annual digital ad revenue of nearly $500 million, with an average of $5.6 million per publisher. Of those reporting digital revenue, 54% had $1 million or less and 19% reported $10 million or more.

More than two-thirds (68.6%) of local publishers surveyed said they participate in some form of programmatic selling. About one-fourth (26.5%) of those who are not currently participating said they do not intend to use programmatic in the next 12 months. 

Among the smaller publishers -- those with less than $1 million in total revenue -- 45% do not participate in programmatic. There’s a 13% non-participation in programmatic for publishers making $1 million to $10 million, and 6% for publishers over $10 million. 

Still, Borrell is optimistic: “CPMs are bound to increase as ad technology gets more sophisticated at reaching specific targets. Also, programmatic buying opens the door to a treasure trove of “national” advertising to which local publishers never had as much access.”