New data shows 20% decline in online ads

Bambi Francisco Roizen · August 18, 2008 · Short URL:

PubMatic co-founder says social networks, entertainment sites were hit hardest

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.


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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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Joined Vator on

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.

Rubicon Project


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the Rubicon Project is a group of industry-experienced, aggressive and passionate renegades dedicated to bringing a new level of efficiency to the fragmented Internet advertising space. As of January 2008, the company has raised $21 million in funding.

The founders of the Rubicon Project shook up the online advertising industry in 1998 when they created L90/adMonitor, one of the most successful Internet advertising platforms that served over 3,000 of the web’s most recognized sites, reaching 65% of the Internet population before DoubleClick acquired it.


$27 Billion was spent advertising online in 2007, yet it’s still too hard for websites to sell their ad space online. While Internet advertising is an explosive market, it is an incredibly inefficient one with advertisers spending money with 300+ disparate advertising networks worldwide (e.g. Google AdSense, Yahoo! Publisher Network, HispanoClick and Adtegrity). the Rubicon Project’s web-based, self-serve solution gives any size website the most complete access to the total available advertising market and its smart matching technology does all the work to perfectly match each ad impression with the optimal money-making opportunity. the Rubicon Project is the new online advertising standard that makes it effortless for websites to generate the mad cash they've always dreamed of. And, it’s free to join.


Rajeev Goel

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