New Index Reveals Surprising Ad Pricing Trends

  |  April 8, 2008   |  Comments

PubMatic's data from 3,000 publishers show small sites make more CPM than large ones.

Publishers of small Web sites earn almost three times the money per ad than the largest sites, the newly created AdPrice Index suggests.

PubMatic, a Palo Alto, CA, company that automates and optimizes ad-serving decisions, developed the index, which is based on data collected from more than 3,000 publishers of all sizes over the past three months.

PubMatic founder and CEO Amar Goel said the AdPrice Index is an industry first that PubMatic is offering for free. "There is now transparent, industry-wide data as an index," he said. "There has never been an index of data about ad prices...It actually provides data about where online ad prices are trending."

He said the information will help publishers, ad networks, and advertisers plan and manage their businesses.

The first findings show that publishers of small sites -- described as those receiving under a million page views monthly -- are paid an average of $1.18 effective cost per thousand impressions (eCPM), nearly triple the 38 cents eCPM paid to sites with more than 100 million monthly pageviews.

"That's not necessarily the most intuitive thing people would have guessed up front," Goel said. "Traditionally advertisers have paid more for the large sites because of the brand of a Yahoo or a Microsoft or something like that." He pointed to an Avenue A/Razorfish report suggesting the agency had increased its spending on vertical sites at the portals' expense. "This [AdPrice] data would confirm that in spades," Goel said.

Goel said he was also surprised a bit to see that, while eCPMs for social networking sites are among the lowest by vertical, they increased 69 percent in the three months measured, going from 22 cents in January to 37 cents in March.

"That gets at all the work people are trying to do (in social network monetization) and all the advertiser interest in trying that out," said Goel.

He said he is confident the AdPrice Index is an accurate representation of the industry, noting it was prepared by two well-respected statisticians: Michele Madansky, a former vice president of global market research for Yahoo, and her father, Albert Madansky, who is an Alexander Professor Emeritus of Business Administration at the University of Chicago Graduate School of Business.

"It's definitely statistically significant," Goel said. "We think it is pretty solid."

In a statement announcing the AdPrice Index, Greg Stuart, former CEO of the Interactive Advertising Bureau and a member of PubMatic's advisory board, said the data shows "advertisers are relying on the targeted, niche audiences that smaller Web sites represent, leading to a significant variance in net publisher eCPMs from ad networks depending on Web site size."

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...