Online Ad Network Display-Ad Rates Take a Dive

Decline Could Indicate Weaker Market, or More Publishers Adding Inventory

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NEW YORK ( -- Overall online ad budgets may be holding steady, but average display-ad rates delivered by ad networks continued their yearlong slide in the third quarter, according to ad network optimization firm PubMatic.

Ad networks delivered 27 cents per thousand impressions to web publishers, on average, in the third quarter, a 21% drop from the second quarter (34 cents), and a 27% drop from the first quarter (37 cents).

Players of all sizes affected
The downturn affected sites of varying size. Small sites (under 1 million monthly page views), medium sites (between 1 million and 100 million) and large sites (over 100 million) all saw declines from the second quarter. Small sites, on average, earned 61 cents, medium sites, 31 cents, and large sites, 18 cents.

The declines could reflect a weakening online ad market, but also growing inventory as publishers attempt to get some value from their long-tail traffic.

Silicon Valley-based PubMatic isn't a research company, but one of several startups that manages ad network inventory for publishers to deliver the highest possible ad rates for remnant inventory. It provides its data to a group of economists who crunch the numbers on a quarterly basis.

The numbers reflect the average ad rate received by the 5,000 websites that use PubMatic to manage their network-sold inventory, and reflects rates delivered by 180 ad networks, including seven of comScore's top 10. The data do not include ads sold directly by publishers.

No category spared
The downward trend among ad networks was felt by all the categories in which PubMatic has enough inventory to provide meaningful data. Entertainment sites were down 27% from the second quarter; business and finance sites were down 22%; gaming sites were down 26%; and news sites fell 36%.

Social networks have the toughest time selling their inventory through ad networks, which is reflected in the lowest rates PubMatic measures. Social networking sites, such as MySpace, Bebo and Facebook, received just 21 cents per thousand impressions, on average, from ad networks in the third quarter. That's a 22% decrease from the second quarter.
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