MediaWeek.com reported today that online display ad prices, which have been trending downward for the past year, hit their lowest point in the third quarter of 2008.
The average display ad page generated a CPM of just 27 cents during the third quarter, down five cents from the second quarter of 2008 and down 23 cents (or 46%) from the fourth quarter of 2007.
“It’s not surprising that it’s been trending down, but what is surprising is the size of the drop,” says Rajeev Goel, president and co-founder of PubMatic. “What we don’t know yet is whether the trend is due to increasing capacity on the supply side, or to the fact that the economic malaise is beginning to find its way into the online ad industry.”
PubMatic derives its data from a survey of more than 5,000 Web sites of varying size and composition, including both broad-based and vertical publishers. The data represents their ad revenue yield per page generated via advertising networks, and excludes premium advertising display sold directly by a publishers’ own sales force.
Interestingly, the value of ad inventory for small-sized publishers fared best, more than triple the average page CPM of large-size sites: 61 cents versus 18 cents, respectively. “Small sites continue to monetize their inventory better than large sites, especially as it relates to advertising networks,” says Goel
Even so, the average CPM per online display ad page fell even for small sites from $1.24 in the fourth quarter of 2007 to 61 cents in the third quarter of 2008.
Google is going to report earnings after the close of the stock market on Thursday.
Google earning should give us a pretty good idea of how the economy is effecting the online ad business
Since many other so called players enter the ppc business the customers of google are testing other players in the ppc business so some of them leave google that is why their revenue is down