PubMatic, a provider of ad-management services for publishers, on Tuesday released its AdPrice Index, which showed a steep month-over-month drop in online advertising in July. “Clearly, we’re seeing the slowdown in the offline economy catching up in the online economy,” said Rajeev Goel, co-founder and General Manager of PubMatic.
PubMatic provides real-time ad network optimization so that publishers can manage the ads that appear on their site from multiple advertising networks. PubMatic serves billions of ad impressions provided by the more than 150 ad networks it works with. “The declines vary by vertical,” said Rajeev. Across Pubmatic’s network of 4,000 publishers, the drops are anywhere between 12 percent and 20 percent, depending on the vertical, he said. The verticals that were hardest hit in July were social networks, entertainment and gaming sites, he said.
The decline in publisher site revenue underscores the challenging environment ad-supported portals and media companies are facing. Time Warner’s AOL saw a 14% drop in display advertisements in its most recent quarter. In Yahoo’s second-quarter results, display advertisements on its owned and operated sites slowed to 11 percent year-over-year growth compared to 15 percent growth in the first quarter, according to Mark Mahaney of Citi Investment Research.
The declines could be seasonal, but it’s unclear whether or when online advertising will pick up.
In addition to a sobering July statistic, Rajeev also talks to me about PubMatic’s business and how it competes with Rubicon Project, a rival company. (Full disclosure: Vator is a client of Rubicon Project) Essentially, Rajeev says that publishers that sign up with PubMatic have their own account at the different ad networks, whereas Rubicon pools all its publishers into one account with each ad network. The result is that publishers can get better CPMs from the ad networks. Rajeev said that his service helps 90% of his publisher clients receive a revenue lift upwards of 70%. PubMatic, which raised $7 million in venture funding, is expected to break even at the end of 2009, according to Rajeev.
