Online advertising is starting to feel the effects of a tepid economy, industry analysis firm PubMatic said in a release Tuesday.
(Credit:
CNET Networks / Josh Lowensohn)
Based on data from "billions of ad impressions" and several thousand online publishers in its AdPrice Index, PubMatic asserted that clicks per thousand monetization rates (CPMs) dropped between March and April, using it as an indicator that the economic slowdown has begun to hit the online ad industry. Large Web sites (over 100 million monthly page views) are feeling the pain, the firm said, with monetization dropping 52 percent from 38 cents in March to 18 cents in April. Medium-size Web sites didn't change much over the same time period. Smaller ones (fewer than 1 million monthly page views) actually showed an improvement in monetization, rising from $1.18 CPM in March to $1.29 in April.
But overall, PubMatic found, monetization has dropped 23 percent. The problem may be the rise of social-media advertising, which major figures in the tech industry have admitted yields weak click-through rates. PubMatic's results said that CPMs plunged 47 percent, from 37 cents in March to 19 cents in April.
Here's another potential culprit: PubMatic has only been releasing monthly AdPrice Index reports for two months. Tuesday's results are consequently a comparison between months one and two. The firm's methods are still young enough so that error could be playing a role; we'll have to see if the numbers are showing the same trends later in 2008.
But PubMatic isn't the only one. In March, market research firm eMarketer lowered its online ad spending forecast for the year.
Run a Web site or blog and don't know which of the several advertising networks to use? Just use Google AdSense and call it a day. No, wait, that's not right. PubMatic has an alternate idea: Get competing ad networks (Google, Yahoo, ValueClick, Komli, and BlueLithium for now; more to come) to bid for your site's eyeballs.
PubMatic has a clever model that brokers your site's traffic to the various networks, and swaps out their ad modules depending on which one pays better. The service also continuously modifies the layout of ad modules and tries to lock in the ones that work best for your site.
PubMatic's Yahoo widget shows you how your ads are performing.
(Credit: PubMatic)There's also a cute widget (for the Yahoo Widget Engine) so you can track your site's ad performance in near real time.
The service is free during this beta phase. Considering what the service does, that's the deal of the century. But as a business model, it's insane. This service is as much about inserting itself in the economics of Web publishing as it is about the technology it does to do so. And the people who run this product should have an idea of how it's going to be part of that economy, or at least should be experimenting with ways how. If, as founder Amar Goel says in e-mails and press materials, his service was able to increase ad revenue 90 percent on a customer's site, and if PubMatic isn't confident enough to extract a piece of that bounty for itself, there's something that doesn't add up. In his defense, Goel did tell me he plans to charge for the service, but first he wants to drive adoption.
PubMatic is participating at the TechCrunch 40 event and is opening up to public beta today.
- prev
- 1
- next
