PubMatic has unveiled the PubMatic AdPrice Index for Q3 2008, a quarterly industry-wide measure of online ad network pricing for publishers. The index shows that online ad prices declined overall this past year by 27%. Publishers of all sizes are feeling the challenges of a nationwide economic slowdown. Small sites continue to command better pricing for eCPMs, now at $0.61 on average in Q3, but these price levels have been declining quarter-to-quarter in 2008. eCPMs for large sites held steady in Q3, but at a lower pricing base of $0.18. The Q3 2008 AdPrice Index is available as a white paper at www.pubmatic.com/adpriceindex and details how the U.S. economic slowdown is affecting monetization for online publishers of various sizes and various verticals.

Data Findings from PubMatic AdPrice Index for Q3 2008:

• The online ad price decline from Q2 to Q3 in 2008 was 21%; throughout the year, display advertising pricing has generally trended downwards across website sizes and verticals
• The Business & Finance vertical remained relatively healthy with $0.86 eCPMs, bucking the trend for the rest of the industry
• eCPMs for Gaming are down 34% from Q1 2008, but there may be improvement as the holiday season draws near, where gaming companies increase marketing efforts to drive sales
• The Social Networks vertical continues to experience weak $0.20 eCPMs, driving the segment to continue exploring new and non-traditional marketing methods to leverage billions of pageviews
• Technology sites have remained constant throughout the past few quarters with $0.50 eCPMs
• Entertainment had the most significant drop of all the verticals, dropping 42% from Q1 to Q3

“Online advertising is one of the key indicators in the U.S. economy, as marketing spend is typically one of the early cuts when realigning corporate expenses. We’ve observed this effect for the past three quarters and it is reflected in the pricing for all U.S. publishers,” said Rajeev Goel, president and co-founder of PubMatic. “Even though declining budgets are a concern, the measurability of the Internet shouldn’t be discounted. This overall downward trend in the economy may be a call to marketers to segment more of their budgets to methods and tactics that allow them to better measure ROI.”

Key Takeaways from PubMatic AdPrice Index for Q3 2008:

• Smaller sites are affected more closely by the economy, which causes dramatic pricing fluctuations
• The comparatively higher rates for small sites are caused by a lack of sales force resources, where they rely primarily on ad networks to monetize unsold premium inventory, which is normally sold through a direct sales force
• The political cycle and holiday season could affect ad prices in the short term
• The steady growth in online advertising continues to drive the creation of new ad networks; the change in the economy may favor ad networks that do a better job of measuring value and who can manage their costs according to the fluctuations of ad campaigns

PubMatic, which provides more than 5,000 online publishers with real-time ad optimization, today announced AdRevenue ’08, the first conference dedicated entirely to improving the value of ad inventory for online publishers and ad networks. PubMatic, known for recognizing trends in ad network pricing with its AdPrice Index, identified the need for a forum where the most respected names in the online advertising come together to address strategies to maximize industry-wide ad inventory revenue.

During the one-day summit taking place November 14th in San Francisco at the Golden Gate Club, attendees are invited to meet with leading technology entrepreneurs, executives, established media and industry thought leaders from Adify, Avenue A | Razorfish, ContextWeb, Draper Fischer Jurvetson, Forrester Research, Google / DoubleClick, NBC Universal, Quantcast, and other innovators in the industry.

PubMatic executives, along with some of the online advertising industry’s most prominent thought leaders, will deliver unparalleled insight to online publishers, ad networks and exchanges, online advertising analysts and application developers looking to improve their ad revenue.

Forrester Research analyst Barry Parr will open the event with a keynote presentation, “Online Advertising: A Volatile Ecosystem,” which will be followed by multiple expert panels on digital advertising monetization.

Distinguished speakers at AdRevenue ’08 include:

• Adam Gerber, CMO, Quantcast
• Anand Subramanian, CEO, ContextWeb
• Barry Parr, Analyst, Forrester Research
• Brian Morrissey, Digital Editor, Adweek
• Chris Moore, General Partner, Redpoint Ventures
• Geoff Katz, Director of Advertising Services, Avenue A | Razorfish
• Jeff Green, COO, AdECN
• Joe Zawadzki, Founder and CEO, Media Math
• Martin Green, COO, Meebo
• Michael Rubenstein, Director, Ad Exchange, Google, Inc.
• Nick Johnson, VP Digital Media Sales, NBC Universal
• Rajeev Goel, Co-Founder and President, PubMatic
• Russ Fradin, Co-Founder and President, Adify

“In today’s online environment, 70% of ad inventory goes unsold. With the uncertainty of the economy and its possible impact on the digital advertising industry, companies and independent publishers should re-evaluate their ad monetization strategies to ensure maximum yield,” said Rajeev Goel, Co-Founder and President of PubMatic. “As PubMatic continues to evolve and create solutions that support intelligent ad inventory strategies, we are pleased to take part in such an unprecedented event that finally addresses the needs of the industry.”

As identified in PubMatic’s latest AdPrice Index, online ad prices continue to remain stagnant and reflect a weak economy. Never before has the need been so great to address how the online advertising industry can increase ad pricing levels while other segments continue to decline. Tickets are limited, and this is an event no one in the online advertising industry can afford to miss.

To register and view the full conference agenda, please visit: http://www.adrevenue08.com.

PubMatic, which provides more than 4,000 online publishers with real-time ad optimization, today announced AdFlex, the first entirely transparent campaign fulfillment service designed to provide ad networks with publisher inventory in a flexible way. Open to all ad networks, AdFlex allows on-demand fulfillment for both repeated and single campaigns from certified inventory provided by online publishers using PubMatic’s ad optimization platform.

The AdFlex fulfillment service is built for ad networks to instantly deliver inventory based on specific targeting requirements such as contextual, geographic, demographic, frequency, or user re-targeting. AdFlex is a transparent service that gives networks insight into the exact web site inventory they are purchasing to quickly and efficiently fulfill campaigns for advertisers. It does not require membership or investment, giving ad networks the flexibility to access highly targeted inventory in various amounts for both repeated and single use campaigns. Ad networks can access inventory in a matter of minutes.

”Getting instant access to the right web site inventory at the right time is critical to our success and our advertising clients’ success. In addition to our own network of publishers, we need instant access to flexible inventory that meets the needs of our advertisers,” said Ajay Sravanapudi, Founder, President, and CEO of Lucid Media. “PubMatic’s AdFlex service gives us the ability to quickly scale up and scale down ad campaigns on demand, without having to manage hundreds of new publisher relationships.”

AdFlex is integrated into PubMatic’s ad optimization platform, which is used by online publishers to automatically find the highest paying ads across hundreds of ad networks, and optimize how ads are displayed in real-time.

“PubMatic developed AdFlex to meet the growing demand from ad networks to secure large scale inventory from a very specific set of publishers based on the requirements of individual advertisers,” said Rajeev Goel, Co-Founder and President of PubMatic. “AdFlex is a natural extension of how we already serve ad networks, delivering certified, high-value inventory from the wide array of publishers we work with, resulting in increased revenue for both publishers and networks alike.”

Powered by Advertising Intelligence (AI), PubMatic uses over 50 targeting parameters to optimize every ad impression in real time, enabling over 90% of its publisher customers to dramatically improve overall revenue. The company works with a publisher’s existing ad strategy and connects them to hundreds of ad networks while making it simple to manage them through one consolidated revenue dashboard.

If you’re a publisher who thinks that you are going to strike gold in an ad supported business, you’re going to have to get more creative than just relying on ad networks. And here is the proof, PubMatic has released its monthly PubMatic AdPrice Index, an industry-wide measure of online ad network pricing for publishers. The index for August indicated that News and Technology-focused online publishers were able to sustain ad pricing levels compared to the previous month while the rest of the industry showed significant decline. Both the News and Technology site categories maintain some of the highest average online advertising prices at $0.48 and $0.61 eCPMs, respectively.

Key Findings:

• The News and Technology vertical categories remained relatively flat, with News having the same average eCPM of $0.48 in July as it had in June and Technology dropping 3 percent from an average eCPM of $0.63 in June to $0.61 in July
• Although Gaming sites saw a significant decline of 34 percent, it is still considered one of the most profitable publishing sectors with an average eCPM of $0.53 in July
• Social Media and Entertainment have had the lowest overall performance for eCPM in the industry the past month, falling to $0.19 and $0.23, respectively
• Overall decline in eCPM was 25 percent from June to July

“There’s certainly a concern with online advertising because of the overall decline, and supporting data from other sources that shows this is a trend,” said Rajeev Goel, cofounder and general manager of PubMatic. “We’re hopeful that some of the major events slated for the latter half of the year, namely the current Olympic games, presidential election, and the holiday shopping season, can trigger positive activity in online advertising.”

The data released today is part of a series of monthly releases of the PubMatic AdPrice Index. 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. Complete August 2008 data from the PubMatic AdPrice Index is available at www.pubmatic.com/adpriceindex.

PubMatic works with online publishers to automatically find the highest paying ad across hundreds of ad networks, and optimize how ads are displayed in real-time. It uses over 50 targeting parameters to optimize every ad impression, enabling over 90% of its publisher customers to dramatically improve overall revenue. The company works with a publisher’s existing ad strategy and connects them to hundreds of ad networks while making it simple to manage them through one consolidated revenue dashboard.