Bucking the Trend: CPMsStay Flat While Revenue Rises
IAB Summit
LOS ANGELES – the Rubicon Project, an advertising technology company focused on global ad network optimization, divulges noteworthy market data and industry trends in the Q4 edition of the 2008 Online Advertising Market Report series. From its independent third-party position between ad networks and Website publishers, the Rubicon Project provides a unique and un-biased perspective of the changing Internet advertising landscape.
“The end of 2008 demonstrated, stronger than ever, the need for innovation in Internet advertising. The industry’s long and short-term survival depends on adapting and integrating digital solutions, especially ad strategies,” said Frank Addante, CEO and Founder. “Amidst the screaming headlines of a crashing ad industry, report after report talked of digital media being the one bright spot. We experienced 30% revenue growth in Q4 across our entire publisher base, the majority of the revenue was derived from the Internet’s largest publishers including media and entertainment. There is enormous opportunity ahead for this industry for those who choose to take it and innovate.”
The company, which is optimizing ads for mid-large publishing customers at the current pace of 25 billion per month, based its analysis for the Q4 Report on the 44 billion impressions served (up about 60 percent from Q3) for the Web’s top publishers across 300 ad networks. Q4 Market Report highlights include:
A changing industry
* Despite the overall job slowdown in the advertising industry, the online sector was the one bright spot. Driven by growth at Internet media companies and web-search portals, in December employment reached its highest level since 2002.
* All told, VC firms and private companies invested $134 million in ad network-related deals in Q4, up nearly 18 percent from the previous quarter.
* CPMs remained flat vs. Q3, down less than 3 percent from Q3 rates (these rates were up nearly 38 percent over Q2); and though they fell by almost 40 percent in some verticals, they jumped by more than 50 percent in others.
Internet dominates
* Internet overtook traditional channels for holiday shopping and as a news source as hungry readers turned to the Web for political info – one of the most notable elections in American history – to the benefit of news sites who were able to turn traffic influxes into real revenue (example within report).
News & Reference
* Average CPMs in the News & Reference vertical were up nearly 17 percent from Q3;
* Traffic to online news outlets jumped 27 percent the first week of Election day with page views doubling. Publishers equipped to deal with the traffic saw better performance;
* A Rubicon Project premium news publisher was able to capitalize on a sudden influx of traffic resulting in a 587 percent spike in ad impressions without a drop in fill rate or CPMs (graph 1).
The emerging metric to gauge growth: CPM + Total Revenue
* Traffic to the Rubicon Project’s Entertainment channel grew by more than 75 percent;
* While average CPMs trended downward in Entertainment due to a flood of inventory, publishers didn’t suffer — overall revenue rose by more than 70 percent for the channel;
* Publishers saw 1.9 times the revenue growth of Q3, for 70% revenue growth — that’s considering they had 2.4x, or 78% more, available inventory (graph 2).
To access the full Q4 Online Advertising Market Report, as well as past published reports for free, visit: http://www.rubiconproject.com/product/market-report.
About the Rubicon Project
Based in Los Angeles, the Rubicon Project launched in 2007 on a mission to automate the $65 billion global online advertising industry. Responding to one of the largest problems plaguing website publishers today – monetizing ad space that goes unsold (as much as 70 – 80 percent) across a fast-growing number of global ad networks – the Rubicon Project pioneered the category of Ad Network Optimization (ANO). Backed by $22 million in funding from Clearstone Venture Partners, Mayfield Fund, and IDG Ventures, the Rubicon Project developed its patent-pending Smart Matching™ technology, which uses billions of pieces of proprietary market data to match each publisher ad impression to the best money-making opportunities from ad networks.
The company serves 1300 premium customers (publishers like Gannett, Salon, Washington Post/Newsweek Interactive and American Greetings) by optimizing more than 15 billion ads each month across more than 300 top ad networks. Reaching more than 250 million unique Internet users, the Rubicon Project is one of the largest sources of ad inventory and reach on the Internet and the preferred source of targeted, audience-segmented inventory for ad networks around the world. The unique combination of ad network optimization and Smart Matching™ technology drives revenue lift ranging from 30-300% for the Rubicon Project’s customers.
Web sites who Demand More From Unsold Ad Space should visit: http://www.rubiconproject.com.
Read Frank’s blog at: http://www.FounderBlog.com/
