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Summary:

PubMatic, a Palo Alto, Calif.-based startup focused on online advertising, just released its PubMatic AdPrice Index based on data from over 3,000 publishers and billions of ad impressions. The findings of this month’s report: The U.S. economic slowdown is beginning to impact online advertising in a […]

PubMatic, a Palo Alto, Calif.-based startup focused on online advertising, just released its PubMatic AdPrice Index based on data from over 3,000 publishers and billions of ad impressions. The findings of this month’s report: The U.S. economic slowdown is beginning to impact online advertising in a big way, with overall monetization dropping by 23 percent — 38 cents eCPM in March vs. 49 cents eCPM in March. Not a big surprise since housing related advertising was big on the web. Even electronics retailers are feeling the pinch and cutting back.

  • eCPMs for large web sites (more than 100 million page views per month) dropped dramatically by 52 percent from 38 cents in March to 18 cents in April 2008.
  • Medium web sites (1 million to 100 million page views per month) were nearly flat, with monetization dropping from 34 cents in March to 33 cents in April.
  • Small web sites managed to improve their monetization, increasing from $1.17 in March to $1.29 in April.

The overall trends you pick up from the report are not that surprising. For instance, the improved monetization of small web sites is because they have more focused content, which presents more targeted advertising opportunity. Again, no surprise that Social Networking led the plunge, with monetization dropping 47 percent to 19 cents in April from 37 cents in March, below January lows of 22 cents. Too much damn inventory. You can get the full report here.

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  1. Ted Rheingold Tuesday, May 13, 2008

    Good review Om. You were the first I saw this morning to review it.

    I think it’s also important to clarify that there are very different types of advertising going on in the large sites vs. the medium and small.

    The type of declining advertising is direct action (i.e. click here now to get something) also known as remnant or bulk.

    The type that is doing well is brand advertising (i.e. please know that our brand cares about your interest).

    It’s alos important to point out that there has already been a significant change in advertising spends away from direction towards brand advertising, as brand advertising has a much effective ROI if in fact you cannot offer something that is worth clicking on at exactly that moment.

    At Dogster/Catster we are very much in the brand camp as it’s how we can give our advertisers campaign results that they are looking for.

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  3. Sarah Worsham Wednesday, May 14, 2008

    We have a few clients who do not have an inventory – they sell as much advertising as they feel can fill the page – which are all run of site. Advertisers have to compete for share of voice and there aren’t any targeting opportunities. The clients also have a tendency to give away online ads as part of an overall package (which is fine, but they’ve told the customer that the web ad is “free”). This has eroded the value the customers have placed on advertising online. Plus why bother when you’re one of twenty ads that are all rotating on the flashing on the side of the page. Readers ignore looking over there anyway.

    This has been a bit of an uphill battle for these clients. They are starting to understand how to sell online: using an inventory and selling targeted ad spots. Now they need to re-educate their customers. It is a bit of a long process – especially since many of their ads are booked for a year online.

    I wonder if these numbers may balance out again as some of these larger/medium websites figure out the need to target for their advertisers.

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