Online Display Ad Pricing Drops in Q4 2008

Pubmatic has released online ad pricing data for the fourth quarter 2008. They found that ad pricing dropped in Q4, likely due to an all too unstable economy. Here’s what they found:

  • All sizes of websites (small, medium, and large) were down dramatically from Q4 2007; small, medium, and large sites dropped 52%, 23%, and 54%, respectively, from the previous year.
  • All sizes of websites were down from Q3 2008 to Q4 2008, but the drops leveled-off, bucking the trend of larger drops from quarter to quarter throughout 2008; this may be an indicator that the online ad sector received enough of a boost from holiday advertising to keep ad rates steady.
  • All vertical categories experienced significant drops in their ad pricing from Q4 2007; the biggest drop by a vertical was Business & Finance, which fell from an average price of $2.13 in Q4 2007 to $0.83 in Q4 2008 – a 61% drop.
  • No vertical categories dropped by a significant amount from Q3 2008 to Q4 2008, with some verticals even improving from the previous quarter — the Technology, Sports, Entertainment, Gaming, and Music verticals all had higher ad price averages in Q4 of 2008 than in Q3 of 2008.

“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.”

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