Holiday Ad Sales May Have Prevented Big Drop from Q3 2008 to Q4 2008; Sports, Entertainment and Gaming Sites Gain from Previous Quarter
PALO ALTO, Calif. – PubMatic (www.pubmatic.com), an ad revenue optimization company that works with over 5,500 online publishers, unveiled (www.pubmatic.com/adpriceindex) the PubMatic AdPrice Index for Q4 2008, a quarterly industry-wide measure of online ad network pricing for publishers.
The data reflected in the AdPrice Index shows a significant decline in Q4 2008 online display ad pricing compared to Q4 2007 for all sizes of websites and all vertical categories, underscoring the fact that the U.S. economy is in a recession and that the online advertising sector is not immune to it. However, there are signs of promise for the online advertising sector, demonstrating plenty of opportunities for advertisers, publishers and ad networks.
Data Findings from PubMatic AdPrice Index for Q4 2008:
* All sizes of websites (small, medium, and large) were down dramatically from Q4 2007; small, medium, and large sites dropped 52%, 23%, and 54%, respectively, from the previous year.
* All sizes of websites were down from Q3 2008 to Q4 2008, but the drops leveled-off, bucking the trend of larger drops from quarter to quarter throughout 2008; this may be an indicator that the online ad sector received enough of a boost from holiday advertising to keep ad rates steady.
* All vertical categories experienced significant drops in their ad pricing from Q4 2007; the biggest drop by a vertical was Business & Finance, which fell from an average price of $2.13 in Q4 2007 to $0.83 in Q4 2008 – a 61% drop.
* No vertical categories dropped by a significant amount from Q3 2008 to Q4 2008, with some verticals even improving 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.
“Online ad pricing is a reflection of what is happening in the overall economy, and as a result, pricing has dropped significantly in almost all categories in the past year,” said Rajeev Goel, Co-founder and CEO of PubMatic. “However, with overall advertising budgets shrinking, the need for marketers to have more accountable advertising could bring more advertising dollars online in 2009 and start an upward trend as some vertical categories have already experienced.”
The data released today is part of a series of quarterly releases of the PubMatic AdPrice Index. Pricing data reflects net publisher monetization via ad networks and excludes ad networks’ share of ad spends as well as inventory sold directly by publishers to ad agencies or advertisers. Complete Q4 2008 data from the PubMatic AdPrice Index is available at (www.pubmatic.com/adpriceindex).
About the PubMatic AdPrice Index / Methodology
The PubMatic AdPrice Index is a monthly survey comprised of over 5,500 websites, approximately 85% of which are based in the US. The PubMatic AdPrice Index is prepared by leading independent statisticians and industry experts Albert Madansky, Ph.D. in the H.G.B. Alexander Professor Emeritus of Business Administration at the University of Chicago Graduate School of Business and recipient of the 2005 American Statistical Association Founders Award, and Michele Madansky, Ph.D., a media and market research consultant and former VP of Global Market Research for Yahoo!
About PubMatic
PubMatic is an Ad Revenue Optimization service. PubMatic provides more than 5,500 web publishers real-time ad optimization, which significantly increases revenue while simplifying ad network management. PubMatic works with hundreds of ad networks and has created thousands of new publisher/ad network relationships. PubMatic is venture backed by Draper Fisher Jurvetson, Nexus India Capital, and Helion Ventures. Find out more at http://www.pubmatic.com.
