Cost per meaningless thousand

Opinion

Media owners must stop competing on the metric that devalues them, writes Omar Oakes.

 What will happen next when a quarter of the world’s advertising suddenly becomes a lot more expensive?”

This rhetorical question, posed to me during a recent lunch (which included wine, so the rhetoric was abundant), was specifically about Meta’s ad prices (CPMs), which have already risen before accounting for further seasonal increases (driven by back-to-school and Amazon Prime Day spikes). This is a big deal, especially since, for the first time this year, Meta will command 26.8% of global adspend and surpass Google (26.4%).

My instinctive response was to say: “It should be great for rival media channels” because Meta is now relatively more expensive. But that kind of logic is dangerous because accepting it means believing that ad products on Facebook or Instagram can be easily substituted with broadcast TV, outdoor, audio, or publishing formats.

And it’s thanks to the unrelenting, dumb logic of the cost-per-thousand that breeds short-termism and erodes the health of advertising by weakening its effectiveness.

The CPM, the industry’s dominant trading metric, doesn’t measure value. If anything, it’s a fig leaf for making platforms’ cheap inventory look like a bargain.

Now that the bargain is disappearing, will media owners finally propose a better deal?

How we got here

Back in 2018, people like social media evangelist Gary Vaynerchuk would say, “Nobody is allocating the appropriate amount of money to Facebook and Instagram, given how underpriced it is.”

He told an audience at Meta’s (then Facebook’s) London office that when big brands finally move serious budgets in, “$4 CPMs become $18 CPMs”.

You could say he was right. Meta’s recent earnings show a profit explosion thanks to higher prices: a 12% year-over-year jump in its average ad price in Q1 2026 drove a 33% increase in total ad revenue. There has been a mass migration of spend from Google (bleeding search traffic to AI chatbots) and improvements to Meta’s AI ad-delivery engine.

But the dangerous part came next, when Vaynerchuk proposed that marketers act like stock pickers and play the arbitrage game. Namely: massively increase spending on Facebook and Instagram simply because the ads would become more expensive later. He even claimed: “I’m spending all my money on Facebook.”

Really? I pushed Vaynerchuk on this in a subsequent interview – did he really think brands should take such an extreme approach? He rode back a bit on this, saying they should allocate a mere “50-60% of the budget” to these two channels. His explanation:

Between Instagram and Facebook, you are getting to a shocking amount of people at a very low cost, but meanwhile [large advertisers] want to deck out a double-decker bus for awareness….

Do I believe that Pepsi and Puma in the UK should spend 50-60% of their money just on Facebook and Instagram? The answer is yes. Should they do a lot of the other things they do? Yes, but they should cut the budgets on all those things, so that they can afford the 50 to 60% on Facebook and Instagram.”

So much of our industry conversation is dominated by the need to simplify media-buying so marketers can measure “apples with apples”, and other food-based analogies for which the IPA is probably to blame, thanks to its Eat Your Greens marketing bible.

Well, sorry, but media and advertising aren’t simple. The effect (and affect) of different media formats varies enormously, not to mention the quality. The trend in attention research and measurement is a direct challenge to the idea that all media is created equal, which is why effective reach or attentive reach is a far better way to measure your spend than reach alone.

Or, to exhaust the food analogies even further: Vaynerchuk is essentially telling parents to splurge on white bread to feed their children because a single loaf costs less but has a similar calorie count to a plate of broccoli and potatoes.

Because we don’t measure household budgets by cost-per-calorie.

But that logic seems fine in adland. Hence, cost-per-thousand impressions.

The false premise

Eight years later, the worship of CPMs was in full display at Cannes Lions last week.

Adtech vendors with bizarre names I’ll never remember adorn the beaches, cabanas and even the backstreet cafés. Cannes felt bigger than ever, and much of the gossip centred on there being a surge in finance people. Presumably, venture capital was out in force to broker a deal between an adtech company and an agency holdco or two in response to Publicis Groupe’s controversial LiveRamp buy.

All this tech has, so far, done little to improve the effectiveness of advertising, but has focused on efficiency and personalisation/targeting as a substitute for any need to have a big or interesting creative idea.

It shouldn’t be a surprise, then, that on Monday, WARC research revealed that the average campaign length for large brands is now 30 to 40 days. Seriously? Who exactly is supposed to remember these ads after such a short time in market?

As Professor Mark Ritson reminded an audience at a talk hosted by Radiocentre on Tuesday, creativity is effectively a lever brands use to raise prices. And raising prices is the most effective way for a business to increase profit.

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But the short-termist disease is even more deadly for challenger brands, Dr Karen Nelson-Field told audiences a week previously at ITV’s Showcase event in Manchester.

She revealed research showing that 43% of ad spend is wasted, with challenger brands suffering six times as much inefficiency.

She said: “There’s nothing about effectiveness and efficiency that comes with CPM…. yet we all rely on it every day of our lives, as if the cheaper it is, the better it is…”

That’s why CPMs are misleading: they ignore attention and treat all impressions as equal, turning “cost per thousand” into a “cost per meaningless thousand.”

That’s where the logic of “cheap reach” has got us. More money spent on less effective formats.

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The moment of reckoning

So “expensive” Meta ads should be the moment many of you have been waiting for. But waiting to do what, exactly?

Here’s the trap. If your response to rising platform CPMs is to celebrate that quality media is now more competitively priced, you are still tied to the metric that has been grinding down your rate card for 15 years. Rather than winning, you’re just losing more slowly.

The cheap-attention arbitrage isn’t ending because the industry made a better argument. Meta ads are getting more expensive because of very specific shocks that have little to do with content or media quality.

For the first time in a long time, there’s a structural opening – not just an effectiveness argument, but an actual commercial opportunity – to propose a different trading relationship.

One where price reflects attention quality, verified reach, and editorial accountability rather than cost-per-thousand undifferentiated impressions.

The evidence for this exists. The research exists. But does courage exist?

Omar Oakes was the founding editor of The Media Leader and continues to write a column as a freelance journalist and communications consultant for advertising and media companies. He has reported on advertising and media for 10 years.