The US economic slowdown is having a notable impact on online ad network rates, resulting in a 23% drop in website monetization – with the average eCPM (effective cost per thousand impressions) falling from 49 cents in March to 38 cents in April – according to the PubMatic AdPrice Index.
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.
The PubMatic AdPrice Index revealed surprising weakness in monetization for the vast majority of websites (via Atlanta Business Chronicle). Large websites fared the worst while small websites managed to maintain their monetization rates:
- eCPMs for large websites (more than 100 million pageviews per month) dropped dramatically by 52%, from 38 cents in March to 18 cents April.
- Medium websites (1 million to 100 million pageviews per month) were nearly flat, with monetization dropping from 34 cents in March to 33 cents in April.
- Small websites (less than 1 million pageviews per month) managed to improve their monetization, increasing from $1.18 in March to $1.29 in April.
Among other key findings of the PubMatic AdPrice Index:
- Across all websites, the range of eCPMs was $0.002 to $18.45.
- Among verticals…
- Social networking led the plunge with monetization dropping 47%, from 37 cents in March to 19 cents in April, below January lows of 22 cents.
- Entertainment monetization dropped 17%, from 40 cents in March to 33 cents in April.
- Gaming and Sports were down marginally (4% and 5%, respectively).
- Technology remained relatively flat at 83 cents in April vs. 82 cents in March – but is still off January highs of 92 cents.
- In April 2008, 77% of small websites garnered net publisher eCPMs from ad networks of under $1.00, compared with 95% of medium websites and 100% of large websites.
To combat the drop in monetization, many publishers are adopting best practices, PubMatic said, citing the following:
- Network diversification: Working with multiple ad networks (rather than one or two) to find the right mix of optimum advertising campaigns.
- Monetizing international traffic: Though international traffic is often a minority of a publisher’s traffic volume, it can be highly lucrative because of the weak US dollar and the growth environment outside of the US.
- Segmentation strategy: Segmenting a website into various categories (finance, travel, lifestyle) and using different ad tags for each category. Most ad networks are better able to target relevant campaigns to a website’s inventory as a result.
About the data: The PubMatic AdPrice Index represents 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. The comprises over 3,000 websites, approximately 85% of which are based in the US. PubMatic is a service of advertising company Komli and is venture-backed by Draper Fisher Jurvetson, Nexus India Capital, and Helion Ventures.