Display Ad Prices Trending Downward; Fall-Off Is Consistent, But Not ‘Dramatic’—Pubmatic
Here’s some more evidence of how bad things are… The average price of a display ad was 27 cents in Q3, a nearly 50 percent drop from Q407’s 50 cents, according to Pubmatic, which sells software optimization tools to ad networks and has been surveying prices for the past four months. In Q1, the company said the average price of a display ad was 37 cents, while from Q2’s price was 34 cents, said Pubmatic, which bases its PubMatic AdPrice Index (PDF) on a survey of roughly 5,000 websites mostly in the U.S. Some of the other findings in its survey showed:
—Display ad pricing has generally trended downwards across website sizes and verticals.
—All categories moved down from last quarter, with the exception of Technology which stayed flat.
—Social nets are still the lowest priced category, with sports coming in a close second, at 21 cents and 25 cents, respectively.
—Entertainment had the biggest drop of all verticals, falling 42 percent to 33 cents in Q3 from 57 cents in Q1.
—Small-sized websites’ inventory was more than triple the value of larger sites in Q3, with values of 61 cents and 18 cents, respectively.
Posted In: Advertising, Research & Metrics, Research
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Comments (2)
Oct 15, 2008 9:25 PM
Hi David,
This is Rajeev Goel, Co-Founder and President of PubMatic. I appreciate your covering the AdPrice Index.
I wanted to point out that the comparison of Q308 data to Q407 has seasonality issues, so probably better to look at Q108 versus Q308 (as you did). Of course nobody knows what pricing will look like in Q408, but we expect it to be higher than Q308 due to the holiday shopping season and election cycle.
Also, PubMatic is in a relatively new category - publisher ad revenue optimization. We provide software optimization services and technologies to publishers, so that they can make more money from their ad inventory and more easily manage multiple ad network relationships.
Thanks!
Oct 15, 2008 11:56 PM
I’m curious why this is reported as representative of all display impressions. Pubmatic is only reporting on display ads sold in ad networks, which represent very low CPM inventory, yet each of the 4x display ad prices moving downward is mentioned above it is simply reported as “display”, not “display imps in ad networks”.
Also, has there been any study on correlation between premium and ad network display CPMs? Are we supposed to assume they move in synch? Regardless, this should be revised to correctly report that the CPMs for display imps run through ad networks is trending down.