SOURCE: PubMatic

June 17, 2008 08:00 ET

Online Ad Prices Continue to Reflect Weak Economy

PubMatic Ad Network Pricing Index Shows Monetization Flat in May; Social Networking and Gaming Sites Show Promise

PALO ALTO, CA--(Marketwire - June 17, 2008) - PubMatic (www.pubmatic.com), the world's first service that automates and optimizes ad inventory decision-making for Web publishers, today released its third monthly PubMatic AdPrice Index (www.pubmatic.com/adpriceindex), an industry-wide measure of online ad network pricing for publishers. The index indicates that the economic slowdown in the U.S. continues to affect the online advertising industry, with overall monetization dropping by 0.7 percent from last month after the previous month's 23 percent drop. The PubMatic AdPrice Index is based on data from more than 3,500 publishers and billions of ad impressions.

The PubMatic AdPrice Index revealed significant improvement in monetization for social networking and gaming sites, with eCPMs increasing by 66 and 51 percent respectively. While monetization for sports sites in May stayed relatively level, monetization for entertainment, news and technology sites continued to drop, by 11, 13 and 22 percent, respectively.

Of large, medium and small Web sites, large Web sites (100 million page views a month) showed the biggest improvement with a sixteen percent increase from April, from 18 cents to 21 cents. This was likely a result of the significant spike in social network and gaming ad pricing, which generally fall into the large size category. Medium sized Web sites (1 million to 100 million page views per month) stayed consistent, having a less than one percent change from April, while smaller Web sites (less than 1 million page views per month) suffered a 12 percent downturn from the previous month.

The PubMatic AdPrice Index's key findings include:

--  On average, Web site monetization decreased by less than one percent
    from 38 cents in April to 37 cents in May. *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.
    
--  Among the verticals, social networking showed the greatest increase,
    with monetization increasing 66 percent, from 19 cents in April to 32 cents
    in May, slightly below the vertical's peak of 34 cents in March. Gaming
    monetization increased by 51 percent, from 66 cents in April to 99 cents in
    May.
    
--  Entertainment monetization dropped 11 percent from 33 cents in April
    to 29 cents in May, while news sites dropped 13 percent, from $1.27 in
    April to $1.13 in May. Technology sites declined even further, from 83
    cents in April to 65 cents in May, a long way off January highs of 92
    cents.
    
--  As has been the trend over the past two months, smaller, niche sites,
    averaging $1.13 eCPMs, continued to fare better than medium and larger
    sites, averaging 34 and 21 cents, respectively. Monetization of smaller Web
    sites did drop slightly, from $1.30 in April, while monetization on larger
    Web sites increased by 16 percent from 18 cents in April, indicating that
    some advertisers may be shifting budgets to take advantage of the lower
    prices on larger sites.
    

"June's AdPrice Index shows that online advertising rates continue to reflect an overall weak economy, however we did see improvements for certain segments," said Rajeev Goel, cofounder and general manager of PubMatic, speaking at OMMA Publish New York. "While social networking and gaming sites did show some increase in monetization, the two verticals remain volatile and continue to monetize at lower rates than other, smaller verticals."

The data released today is the third in a series of monthly releases of the PubMatic AdPrice Index. Showing for the first time ever net publisher monetization on inventory sold to ad networks, the PubMatic AdPrice Index provides transparency for the ad industry so that publishers, ad networks and advertisers can keep up with changes in traffic monetization and better plan for the future of their businesses.

For the complete June 2008 edition of the PubMatic AdPrice Index, please visit www.pubmatic.com/adpriceindex.

About the PubMatic AdPrice Index / Methodology

--  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 PubMatic AdPrice Index is comprised of over 3,500 Web sites,
    approximately 85 percent of which are based in the US.  The PubMatic
    AdPrice Index is prepared by leading independent statisticians and industry
    experts:
    
    -- Albert Madansky, Ph.D. is the H.G.B. Alexander Professor Emeritus of
       Business Administration at the University of Chicago Graduate School of
       Business, and was the recipient of the 2005 American Statistical
       Association Founders Award

    -- Michele Madansky, Ph.D. is a media and market research consultant and
       former VP of Global Market Research for Yahoo!

About PubMatic

PubMatic is the world's first service that increases Web publishers' revenue by automating and optimizing ad serving decisions. PubMatic significantly increases ad sales revenue for more than 3,500 publishers by optimizing ad serving decisions across hundreds of ad networks and by using sophisticated algorithms to optimize the layout of text and display ads. PubMatic is a service of advertising company Komli and is venture backed by Draper Fisher Jurvetson, Nexus India Capital, and Helion Ventures. Find out more at www.pubmatic.com.

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