PubMatic’s AdPrice Index Sees 23 Percent Drop in Ad Prices

PubMatic is out with their second monthly AdPrice Index report and they believe that the U.S. economic slowdown has begun to affect online advertising. They are reporting that 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 April, 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 and small Web sites managed to improve their monetization, increasing from $1.17 in March to $1.29 in April.

They also have provided some stats on a variety of verticals:

Among the verticals, Social Networking led the plunge with monetization dropping 47 percent, from 37 cents in March to 19 cents in April, below January lows of 22 cents. Entertainment monetization dropped 17 percent from 40 cents in March to 33 cents in April. Gaming and Sports were down marginally (4 percent and 5 percent, respectively). Technology remained relatively flat at 83 cents in April vs. 82 cents in March, but is still off January highs of 92 cents.

Will the massive number of vertical ad networks that have launched (and will launch) help to combat this revenue drop?

It’s important to remember that this index comes from the publishers that use PubMatic to manage their ad inventory. PubMatic self reports 3,000 publishers. What I’d like to see is a breakdown of their counts for small, medium and large - meaning, how many of their publishers fall into each category. My guess is that most are small or medium. If the number of large publishers is small, that could account for some of the drop as the sample size might be quite small. I will try to see what I can find out and will report back with any findings.