Online display ad prices dropped 53% in fourth quarter

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Palo Alto, Calif.—Prices for online display ads took a big tumble in 2008’s final quarter compared with the year-earlier period, according to the newly released Pubmatic AdPrice Index from ad revenue optimization company Pubmatic,with the average price for Web advertising falling by about 53%, compared with the fourth quarter of 2007.

The report includes a mix of b-to-b and b-to-c sites in the following industries: business/finance, entertainment, gaming, news, social networking, sports, technology and music.

The average effective cost per thousand impressions (eCPM) in the fourth quarter was 26 cents, compared with 50 cents in the year-ago quarter. However, the quarterly decline was modest, compared with the third quarter’s eCPM of 27 cents.

The biggest decline by vertical category was among business and finance Web sites, dropping 61% from the fourth quarter of 2007. Display ad prices on entertainment sites were off by 40%; gaming sites were down by 31%; and news sites prices dropped 36% year-over-year.

The Pubmatic AdPrice Index is a quarterly survey of more than 5,000 Web sites, and reflects net publisher monetization through ad networks.

—Christopher Hosford

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