State of Digital Advertising Report

Advertising CPM (Cost-per-Mille) Trends

What does the CPM trend reveal?

CPM, or cost per mille, is an advertising metric that measures the average cost of showing an ad one thousand times. CPM, similar to the cost of goods, is determined by supply and demand. In the digital advertising world, publishers serve as the suppliers; the websites or mobile apps that host and deliver ads to advertisers’ target audiences.

The selling and buying of digital ads on the web is typically conducted in an auction format that can be handled programmatically by two types of platforms: the supply-side platform (SSP), representing the publishers, and the demand-side platform (DSP), representing the advertisers. Since the amount of advertising space offered by the publishers doesn't typically fluctuate, changes in CPM are mostly driven by advertisers’ demand for ads.

Note: CPM varies by industries, geographies, and channels. CPM of specific campaigns may experience different patterns.

Display Retargeting CPM Trend

Display retargeting costs, as indicated by the average CPM, surged 18% in January and February, compared to the same period in 2025. The retargeting CPM in early Q1 signals strong demand for retargeting inventory.

Display Prospecting CPM Trend

Conversely, display prospecting CPM continued its decline from Q4, coming in 11% lower in January and February compared with the same period last year, signaling weakening demand for prospecting display ads.

Account Based Marketing CPM Trend

Account-based marketing, also known as ABM, is a business-to-business (B2B) marketing strategy that targets a specific group of high-value accounts through personalized advertising and sales outreach.

ABM advertising CPM were 8.5% lower in January and February compared with the same period last year, but the overall trend has remained steady, signaling stable demand for account-based advertising.

The Economic Outlook - The Calm Before the Next Storm?

Inflation Rate

The U.S. inflation rate has been stabilizing in the mid-2% range since the U.S. government resumed inflation rate reporting last November. However, the data does not yet account for any potential economic impact stemming from the Iran conflict, which began on the last day of February.

* The U.S. government did not publish the October 2025 inflation rate data due to the shutdown.

Consumer Sentiment

The Consumer Sentiment Index rebounded slightly in January and February, but remains significantly lower than during the same period across the previous two years.

Consumer Spending

Overall U.S. consumer spending held strong, showing strong year-over-year growth in January and February, according to the Bank of America Consumer Checkpoint report.

* The unusual fluctuation in February was due to the extra day in February 2024, a leap year.

The Drivers Behind the Diverging CPM Trends: Zero-click Search and Growth of Connected Screens

A notable shift is emerging in digital advertising. CPM trends show a clear divergence between display retargeting and display prospecting campaigns. While demand for retargeting inventory remains strong, prospecting CPMs continue to decline. This pattern suggests advertisers are reducing reliance on web display for upper-funnel initiatives while maintaining or increasing investment in lower-funnel tactics such as retargeting and conversion-focused campaigns.

At the same time, upper-funnel investment isn’t disappearing; it’s shifting. Since the launch of AdRoll’s CTV product in April 2025, advertisers have increasingly expanded beyond traditional web-based channels such as desktop and mobile display to newer environments, particularly Connected TV (CTV) and Digital Out-of-Home (DOOH). As a result, digital advertising is evolving from a primarily web-based ecosystem into one that spans a growing network of connected screens.

Two structural changes are driving this transition.

Declining Publisher Traffic in the AI Search Era

Zero-click searches, where answers appear directly on search results pages without requiring users to visit another website, now account for more than 60% of Google searches. The rapid adoption of alternative AI answer engines, such as ChatGPT, is dramatically accelerating this trend. As users increasingly obtain information without clicking through to publisher websites, many publishers are experiencing substantial traffic declines.

According to Ad Exchange, some publishers saw website traffic decline between 20% to 90% in 2025. Since most publishers rely heavily on organic traffic to monetize through advertising, this dramatic decrease has significantly reduced available web ad inventory.

This contraction affects upper-funnel campaigns more than lower-funnel campaigns. Brand awareness and prospecting campaigns require large audience pools across a wide range of publishers to achieve scale. In contrast, lower-funnel campaigns rely on targeting smaller groups of high-intent users who have already interacted with a brand. As a result, retargeting campaigns remain relatively resilient even as prospecting opportunities decline.

The Programmatic Transformation of TV and Out-of-Home Advertising

The second driver is the increasing programmatic availability of television and out-of-home advertising.

Historically, TV and Out-of-Home media were purchased through manual negotiations and long-term contracts that required significant up front investment. However, as more TV screens and billboards become internet-connected, advertising on these screens is increasingly shifting to programmatic real-time bidding (RTB), the same mechanism used for most web and mobile display advertising.

Programmatic CTV and DOOH enables advertisers to run large-format, high-impact creative while maintaining the targeting, measurement, and optimization capabilities associated with digital advertising. This transaction dramatically lowers the barrier to entry for these channels, meaning advertisers of all sizes can access connected-screen inventory through programmatic platforms and integrate them into their broader strategies.

2026 Marketing Plan: Shift From Channel-Based Execution to Funnel-Based Strategy

The expansion of connected screens is reshaping how marketing campaigns are planned and executed.

Digital marketing strategies were traditionally organized around channels, with separate planning required for display, search, and social advertising. However, as new screen environments emerge, consumer attention is increasingly distributed across multiple contexts.

To operate effectively in this environment, marketers must shift from channel-based planning to a full-funnel approach that coordinates messaging across screens. Campaigns may begin with broad awareness on CTV or DOOH and progress toward lower-funnel engagement through retargeting or other performance channels.

Targeting Across Screens

Different connected-screen environments rely on different targeting frameworks.

Traditional digital advertising, including display and social ads, typically targets individuals on personal devices. In contrast, CTV often targets households based on shared viewing environments, while DOOH campaigns target audiences using geographic proximity.

Although programmatic buying simplifies access to these channels, the differences in targeting approaches require marketers to integrate multiple audience datasets and coordinate targeting strategies across platforms to maintain a consistent campaign strategy.

Measuring Performance Across the Multi-Screen Funnel

Measurement is also evolving as advertising expands beyond device-based channels. Multi-touch attribution (MTA), the conventional method to track user journeys across individual touchpoints, becomes less effective for channels like CTV and DOOH, where individual-level tracking may not be possible.

As a result, marketers are increasingly adopting advanced measurement techniques such as Marketing Mix Modeling (MMM) and incrementality testing. These approaches rely on statistical modeling and aggregated data to measure how different channels contribute to overall performance across the marketing funnel.

A Multi-Screen Future for Digital Advertising

Together, declining web traffic and the rapid expansion of programmatic connected-screen inventory are reshaping the digital advertising landscape. As advertisers diversify their channel strategies, campaigns are increasingly designed to engage audiences across a network of screens rather than within a single digital environment.

For marketers, success in this evolving landscape will depend on the ability to coordinate targeting, measurement, and creative execution across a multi-screen ecosystem.