State of Digital Advertising Report

Q3 CPM Trends Ahead of Peak Season

What Q3 CPM trends could mean for holiday advertisers

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 digital advertising, publishers serve as the suppliers through the websites and 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 handled programmatically by two types of platforms: the supply-side platform (SSP), representing publishers, and the demand-side platform (DSP), representing advertisers. Since the amount of available advertising space does not typically fluctuate as much as demand, changes in CPM are often driven by advertisers’ demand for ads.

Display retargeting CPM trend

In Q3-to-date, display retargeting CPMs fell 29.1% from the same period in 2025 and 40.2% from the comparable Q2 period. Retargeting prices against a finite, already-engaged audience, so part of this move likely reflects audience availability as much as broader market pricing.

Display prospecting CPM trend

From July 1 through September 8, display prospecting CPMs fell 45.0% from the same period in 2025 and 25.5% from the comparable Q2 period. The smaller sequential decline shows that the pace of change slowed after the much larger year-over-year shift.

Account Based Marketing (ABM) CPM trend

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

From July 1 through September 8, ABM CPMs rose 4.4% from the same period in 2025, though they fell 15.1% from the comparable Q2 period.

The Economic Outlook: What Cautious Consumers Mean for Holiday Advertisers

Inflation rate

The U.S. inflation rate held at 3.4% in August 2026, unchanged from July, as core inflation eased to 2.4% while energy prices rose 16.3% year-over-year.

While headline inflation held steady, faster monthly price growth and higher energy costs offer consumers little additional relief. Holiday advertisers should account for continued pressure on discretionary budgets and test how clearly their offers communicate value.

Consumer sentiment

The University of Michigan Index of Consumer Sentiment fell to 47.8 in September, down 7.5% from August and 13.2% from a year earlier. The survey reported sharp declines in expectations for personal finances and business conditions, while year-ahead inflation expectations rose from 4.0% to 4.6%.

The second consecutive monthly decline points to a more cautious start to the holiday season. Consumers may be more selective, increasing the importance of clear value and messages that reduce uncertainty around price and purchase decisions.

Consumer spending

U.S. consumer card spending remained solid in August 2026, with total credit and debit card spending per household rising 0.9% month-over-month and 4.5% year-over-year, according to the Bank of America Consumer Checkpoint report. Consumers continued to focus on value, with general merchandise and big-box retailers outperforming more traditional retailers during back-to-school shopping.

Lower Media Costs Meet More Selective Holiday Shoppers

Q3-to-date advertising data shows lower CPMs across display retargeting, and display prospecting. ABM CPM was essentially flat to slightly higher, likely reflecting its narrower, named-account audience rather than broader market conditions. Consumer sentiment has declined for two consecutive months and monthly inflation accelerated in August, while Bank of America card data showed household spending remained solid and value-oriented. While these datasets do not establish causation, read together, they show that holiday advertisers have cheaper access to audiences that are still spending but may respond more selectively to price and value.

Advertisers can use this period to build familiarity while prices remain relatively low. Concentrate spending on the channels the audience uses most, and carry a consistent message from awareness through conversion. Lower prices make reach easier to buy, but cautious consumers raise the bar for what qualifies as a strong, resonant message. Advertisers can use the cost advantage to test which value propositions earn attention before adding spend closer to peak season.

Planning for the 2026 Holiday Season

Use lower prospecting costs to build awareness before peak season

From July 1 through September 8, display prospecting CPMs fell 45.0% from the same period in 2025, giving marketers more room to build familiarity before competition intensifies. CPMs typically rise through early Q4 and peak near Black Friday and Cyber Monday. Brands should explore leveraging lower-cost reach on the channels their audiences use most now, then shift toward conversion as shoppers move closer to purchase.

Turn early holiday interest into coordinated retargeting

In a recent study run by eTail and AdRoll of 100 senior retail and ecommerce leaders, coordinating messaging and timing across channels ranked as retailers’ top challenge when trying to retarget potential customers. For holiday cart recovery, this means advertisers need to act while intent is fresh. Use the products viewed or abandoned to shape the message, and stop targeting recent purchasers. Survey respondents repeatedly identified the first 24 to 48 hours after abandonment as a key window, so use a planned sequence to give each touchpoint a clear role and limit repetitive impressions.

Use ABM to stay visible through year-end planning

ABM helps B2B marketers stay visible with a focused set of high-value accounts across longer buying cycles. As year-end planning accelerates, coordinate advertising with sales outreach and use intent signals to adjust the message as account interest changes. After the season is over, evaluate results looking holistically at engagement, pipeline, and revenue.

Measure performance across the full holiday journey

Lower CPMs give marketers more room to test reach and messaging. Judge each campaign by the role it plays, using consistent tracking for reach, engagement, conversions, pipeline, revenue, and incremental return. A cross-channel view can also connect early awareness activity with outcomes that appear later in the season.

Off-Site Awareness Shapes the Holiday Shortlist

Holiday shoppers are increasingly using AI assistants, search, social, CTV, reviews, publisher content, and retail marketplaces before they visit a brand’s website. As a result, that website now often serves a later stage of consideration, when shoppers are checking price, availability, delivery timing, or whether a product matches what they found elsewhere.

For smaller brands, this shift makes awareness more commercially relevant. Google/Tracksuit found that growth in awareness produces measurable changes in search behavior and, ultimately, market share. During the holiday season, brand investment can influence which names shoppers remember, search for, and include in their shortlist once purchase intent rises.

Lower Q3-to-date prospecting CPMs give advertisers a chance to build recognition before holiday competition drives media prices higher. Marketers can look for the payoff in what shoppers do next, including branded searches, direct visits, product-page views, and stronger response from retargeting audiences.

Measure the handoff between awareness and active consideration. Track whether early exposure increases branded search and qualified site activity, then use first-party signals to continue the conversation after a shopper visits. This connects brand investment to observable behavior without reducing awareness to a last-click metric.

Retargeting Across the Multidirectional Holiday Journey

Retargeting remains a core conversion tool. In the eTail and AdRoll study, 99% of respondents said they were at least somewhat effective at re-engaging visitors, yet only 13% brought back more than 20% of cart abandoners. Broad confidence in retargeting has not translated into high cart-recovery rates.

First-party signals help marketers decide who should see what next. CRM or loyalty data was the most important retargeting signal for 67% of respondents, followed by on-site browsing behavior at 56% and cart abandonment at 55%. Those signals distinguish recent purchasers from product viewers and cart abandoners, allowing marketers to adjust the message, timing, and offer.

Consider a shopper who discovers a brand through a gift guide, CTV ad, or social post, views a product, and leaves. A follow-up message can feature that product or a useful incentive through display, social, or email. Once the shopper buys, suppress further conversion ads. Each interaction should pick up where the last one ended.

Retargeting can keep a brand relevant across the touchpoints that shape a holiday purchase. Better execution depends on tighter audience selection, timely follow-up, clear suppression rules, and coordinated channel roles.