As expected, fourth quarter online advertising was dismal. Pubmatic’s latest advertising index shows that all Web sites – small, medium, and large – saw sharp drops in ad dollars. Small and large sites saw a more than 50% drop while medium-sized sites saw a 23% decline.
Pubmatic is an advertising-network management company that releases an AdPrice Index every quarter. The AdPrice index is based off a quarterly survey of over 5,000 sites, of which 85% are in the U.S.
In the report, Pubmatic showed that on average, the effecitve CPM across large and small sites stood at 26 cents in Q4 2008, down 48% from Q4 2007, and down nearly 4% from Q3 2008.
The effectice CPM for small sites (less than 1 million monthly pageviews) was 61 cents while big sites (more than 100 million pageviews) saw an effetive CPM of 17 cents.
The biggest drop by vertical was Business and Finance, which fell 61% from an average of $2.13 in Q4 2007 to $.083 in Q4 2008.
The exception in verticals were Technology, Sports, Entertainment, Gaming and Music, which saw higher ad prices on average.
While this may all sound like negative news – because, in fact, it is – on the bright side, the monthly declines are becoming smaller. This may indicate that we’re nearing the bottom. Or it may indicate that Q4 advertising spending was just enough to cushion the drop in the fourth quarter, but we’ll see further declines in the future.
All sizes of websites were also down from Q3 2008 to
Q4 2008, but the drops were not significant, bucking the
trend of larger drops from quarter to quarter throughout
2008; this may be an indicator that the online ad sector
got just enough of a boost from holiday advertising to
keep ad rates steady.
Also similar to sites by size, no vertical categories
dropped by a significant amount from Q3 2008 to Q4
2008, and some verticals even improved from the
previous quarter; the Technology, Sports,
Entertainment, Gaming, and Music verticals all had
higher ad price averages in Q4 of 2008 than in Q3 of
2008.
