Microsoft’s head of U.S. sales Keith Lorizio tells Ad Age that Facebook and other social networks are driving down the price of online ads.
Social networks, with their massive inventory of page views, have much lower ad rates on a cost per thousand impressions (CPM) basis than the Internet at large. ComScore reports that Facebook and MySpace only get a $0.56 CPM on average, while the Internet at large gets $2.43.
Lorizio says, “Social networks are going to be a challenge for everybody, as the sheer dominance of the impressions they’re making flood the marketplace with inventory… And it’s especially a challenge for every publisher, as they drive down CPMs.”
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