PubMatic: Display ad pricing plummets

According to the most recent AdPrice Index, published by PubMatic, Q4 2008 saw a significant decline in online display ad pricing compared to the same period the year before.

by Helen Leggatt

The drop in online display ad prices is great news for advertisers, but not for publishers. While decreases had been expected, they had not been forecast to drop at the rate they did. Websites of all sizes and verticals experienced huge drops in ad pricing with a 52% drop for small sites, 23% drop for medium and 54% for large.

The biggest drop by a vertical was in the business/finance category which dropped from an average price of $2.13 CPM in Q4 2007 to $0.83 in Q4 2008 - a 61% decrease.

"Online ad pricing is a reflection of what is happening in the overall economy, and as a result, pricing has dropped significantly in almost all categories in the past year," said Rajeev Goel, Co-founder and CEO of PubMatic.

"However, with overall advertising budgets shrinking, the need for marketers to have more accountable advertising could bring more advertising dollars online in 2009 and start an upward trend as some vertical categories have already experienced."