From the report, “New data collected by PubMatic shows that online ad pricing is turning the corner, possibly
leaving the worst days behind us….Pricing has steadily and consistently increased in the first half of 2009….However, the consistency of this data shows a trend that ad pricing may continue to rise throughout the remainder of 2009.”

PubMatic also notes that total growth in online ad pricing has risen 35% since January 1. The monthly breakdown is available in the chart below. The full report has some additional points about where ad pricing may go this year.

What I’ve seen with the sites I manage is that pricing is stronger the further you get away from technology. Even in technology, there are wide price ranges depending on the type of content.

Rob Hof at BusinessWeek spoke with PubMatic CEO Rajeev Goel and has more on the report.
 

Pubmatic self-reports over 5,500 publishers are using their service and the new partnership will bring sales, service and support in the UK, the Netherlands, France, Spain, Germany and Italy.

Pubmatic notes in the release that on average 20-40% of traffic to large U.S. publishers comes from European visitors. They believe that this new partnership will help increase the fill rate for European visitors which will lead to increased earnings.

Ad networks in the U.S. will also have access to publishers that are served by Improve Digital. Financial terms of the partnership were not provided.

PubMatic says that the benefits to publishers include increased reach, targeting and better control over campaigns. On the publisher side, the benefits include increased monetization, increased visibility, and zero integration.

I like what Pubmatic and competitors Rubicon and YieldBuild are offering. They are all trying to help publishers squeeze out every penny from their advertising inventory. My guess is that just like career sites are doing well in the current economic environment, these new ad optimization startups will also do well this year.

I assume the API documentation will be available tomorrow. Check out all of our Pubmatic coverage including our video interview with President Rajeev Goel.

Here’s a snippet from the email Pubmatic sent out:

PubMatic has experienced unprecedented growth in the past year and, like any growing company, we have to adjust and focus on providing the most value to our publisher clients. This means we’ve stepped up the innovation around our technology and services and as a result, we are discontinuing the use of our MediaKit widget effective February 28, 2009. Although we won’t have the MediaKit widget anymore, you can rest assured that we’ll be offering many new products and introducing big improvements to our service for online publishers throughout the year.

Here’s what the widget looks like:

We were provided with two tickets for CN readers. I am happy to announce that the following CN readers won the free tickets:

• Jimmy K
• Billy S

If you weren’t one of the lucky winners, you can register now and grab a 20% discount by registering with the code ‘CNTRNTWRKS’. The event will be held on November 14th in San Francisco. We are listed as a media sponsor of the event.

We were provided with two tickets for CN readers. If you’d like one, send in a request and we will pick the winners next Friday. Alternatively, you can register now and grab a 20% discount by registering with the code ‘CNTRNTWRKS’.

The event will be held on November 14th in San Francisco. We are listed as a media sponsor of the event.

PubMatic

PubMatic also reported that Social Networks is still the lowest priced category with Sports a close second, coming in at 21 cents and 25 cents, respectively. They also report that Entertainment had the most significant drop of all verticals, dropping 42% from 57 cents in Q1 ‘08 to 33 cents in Q3 ‘08. I am finding on our sites that rates have leveled out and AdSense performance is actually up by a small percentage. Here are the key metrics direct from the AdPrice Index:

• For all sites in aggregate, Q3 08’s average ad price of 27 cents is a 27% drop from Q1’s price of 37 cents and a 21% drop from Q2’s price of 34 cents
• In Q3 of 2008, the value of ad inventory on Small websites ($0.61) was more than triple that of Large sites ($0.18) – small sites under 1 million pageviews a month, large over 100 million a month

As always, note that the AdPrice Index only measures data from publishers using PubMatic for ad serving.

The Ad Revenue conference will focus on helping publisher and ad networks fill unsold inventory. AdFlex is setup to serve ad networks and their need to fill certain inventory buckets. Rajeev notes that sometimes ad networks need to shrink and expand their inventory to meet a specific client need. AdFlex provides the inventory from PubMatic publishers to fill the inventory. To some extent this makes PubMatic an ad network. The discussion about AdFlex begins at the 4 minute mark in the video below.

PubMatic

PubMatic also reported that the news category was basically cut by 50% in cpm ad rates. What I am seeing on my Web sites is that CPMs are down 20% month over month on remnant (default) networks. Here are the key metrics direct from the AdPrice Index:

• On average, Web site monetization decreased by less than one percent from $0.37 in May to $.036 in June. *(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).
• By size, small size Web sites had the largest drop to $0.81 in June, down from $1.13 in May.
• By vertical, News and Gaming had significant drops, sliding $0.62 and $0.20, respectively.
• Entertainment showed the only increase jumping $0.11 from $0.29 in May to $0.40 in June.

If the trend continues that rates for smaller publishers continues to drop significantly, will these smaller publishers be forced out of business?

As always, note that the AdPrice Index only measures data from publishers using PubMatic for ad serving.

Most publishers will "chain" networks together so that when network A has no ad to show, it will move down the chain to network B and then network C and so on. PubMatic is changing this model by removing the chain and creating an instant on-the-fly auction for the ad slot and will show the best ad network they can based on the ad networks your site or blog are part of. I’ve been part of ad chain discussions for 10+ years and on one of the private ad boards I am on, it’s a daily discussion. The bottom line is that as a publisher you want to get every bit of juice out of the orange you can, too many publishers leave half of the juice in the orange.

Frankly, I’ve never seen this type of ad maximization and it will be interesting to see how it works over the next few months. For this to work effectively, a publisher must be signed up to enough ad networks to allow PubMatic to find the best price in the auction possible. PubMatic claims in their trials they have seen a boost of over 50% in revenue and their top client Flixster saw a "significant increase in incremental revenue." There’s more info on the new program on the PubMatic blog.

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.

It took about ten minutes to create the media kit that I’ve embedded below. I’d like to see an option to only link to the page that the widget links to. Not all sites will want to embed but most will be willing to link to the page. I am wondering if this could be the first step to PubMatic helping publishers with the buy/sell process. Currently the media kit points the advertiser directly to the publisher.

The data comes from the 3,000+ PubMatic members and reflects only ads sold from ad networks not private sales. I will assume the math makes this index statistically relevant. The amounts in the index reflect net publisher amounts.

The initial AdPrice Index findings include:

• On average, small niche Web sites (less than 1 million pages views per month) provided significantly stronger performance for advertisers than medium Web sites (1 million to 100 million page views per month) and large Web sites (over 100 million page views per month): eCPM averages for March 2008 are $1.18 for small Web sites, $0.34 for medium Web sites, and $0.38 for large Web sites. The large Web site segment includes a higher proportion of social networking, entertainment, and gaming sites than any other segment.
• eCPMs for social networking sites are among the lowest by vertical, though they have increased 69% from $0.22 in January to $0.37 in March
• In March, 76% of small Web sites saw eCPMs under $1.00, compared to 96% of medium Web sites and 94% of large Web sites
• eCPMs for technology and gaming sites are higher on average than other categories: $0.82 and $0.69 for March respectively
• Technology eCPMs have declined by 12% from January ‘08 ($0.92 eCPM) to March 2008 ($0.82 eCPM)

Perhaps other advertising optimization firms like Rubicon (our coverage) and YieldBuild (our coverage) can create additional indexes to provide additional industry insight.

It’s a pretty interesting idea – publishers sign up for PubMatic, then report on their success using the program. From the top success stories, the PubMatic team selects a winner (or two) and those companies get free advertising across many of the top Web 2.0 blogs (CN is one of those blogs). So not only do you have direct financial reasons to at least try PubMatic but now you have marketing reasons as well.

The first two winners are WinCustomize and BikerOrNot. WinCustomize has seen a 106% increase in eCPMs since using PubMatic’s service to optimize across ad networks. BikerOrNot has seen a 150% increase in revenues since implementing PubMatic.

My advice to Rajeev when we further discussed PubMatic last week is to work with the advertising systems they partner with to have the advertiser platforms create "proxy logins" – this way if a publisher wants to work with PubMatic, they can give PM a login that has restrictions such as read-only or certain modification options. We are using the tool and look forward to sharing our results later in the year. And the more I thought about proxy logins, this should be offered on many advertiser, analytics and financial systems. There is HUGE potential there for someone to capitalize on.

Editor’s note: PubMatic is a current CenterNetworks sponsor.

Allen,

Thanks for highlighting what our service does. PubMatic optimizes across the leading ad networks to maximize publisher revenues, and then does color optimization for AdSense and YPN text ads. One service to do it all for you, regardless of your type of network. I thought I’d give you a little update on where we are:

1. 1,000+ publishers are using www.PubMatic.com today!
2. In a recent survey we did, 50% of publishers said their revenues went up 20-40% by using PubMatic, and 25% said their revenues went up by more than 60%!
3. We have now network support for AdSense, ValueClick, BlueLithium, Tribal Fusion, Yahoo Publisher Network, Advertising.com, Burst Media, and Casale — pretty much all the top networks. And this is real deep integration so you see all your reports, your CPMs, don’t have to cut and paste any ad tags, etc. And we have tons more coming!

In short, we are pretty darn excited about how publishers and ad networks are responding to PubMatic, and are working hard to make it even better.

I love to hear from potential customers or our current customers, so let me know if you have any questions or thoughts.

Amar Goel
Founder
PubMatic
amar.goel ( at ) pubmatic.com