Online ad rates drop sharply in Q4

Bambi Francisco Roizen · January 14, 2009 · Short URL: https://vator.tv/n/640

Pubmatic's new AdPrice Index shows e-CPMs down to 26 cents on average

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.
 
 
 

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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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PubMatic is focused on serving the needs of publishers by providing an industry leading platform that allows publishers to maximize their revenue while simultaneously reducing complexity.

Being a publisher is difficult these days. On the one hand, publishers want to focus on developing rich content and sustaining a user community based on common interest. On the other hand, they’re forced to spend ever more time and energy running the “business” of being a publisher.
What ad style should a publisher use? Publishers have to figure out what’s the best color combination, size, ad type, and other parameters that best appeal to their users. There are over a billion different combinations for publishers to consider.

How can a publisher manage multiple ad tags? Each ad network and ad style requires a unique set of ad tags that publishers have to maintain and manage.
Which ad networks should a publisher use? There are several hundred significant ad networks operating around the world today, with that number growing every week.
How does a publisher get consistent reports across ad networks? Each ad network is only able to provide reporting visibility for a subset of the publisher’s ads, but yet publishers need the ability to view their ad inventory performance holistically. Learn more about PubMatic for publishers.

At the same time, ad networks are finding challenges of their own.
It’s difficult to reach new publishers. Most publishers already have ad tags on their web site, and they’re reluctant to change them for a new ad network.
Signing up new publishers is inefficient. Signing up new publishers typically involves lots of emailing or faxing back and forth, requiring lots of staff time and slowing the growth of the ad network.
PubMatic was founded in 2006 and is based in the Bay Area, California and Pune and Mumbai, India. PubMatic is backed by Draper Fisher Jurvetson and Helion Ventures.

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