PubMatic the world’s first service to automate and optimize ad inventory decision-making for Web publishers, released yesterday its third monthly PubMatic AdPrice Index, an industry-wide measure of online ad network pricing for professional web publishers.

The Pubmatic Ad Price Index for June 2008

In June, the index highlights the economic slowdown in the U.S which 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 June 2008 PubMatic AdPrice Index also 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 is based on data from more than 3,500 publishers, approximately 85 percent of which are based in the US, and billions of ad impressions.

Here more details:

PubMatic AdPrice Index

The PubMatic AdPrice Index is a broad-based measure of ad network pricing information. It is based on anonymous data from over 3,500 publishers who work with PubMatic for ad network and layout optimization services.

The June PubMatic AdPrice Index indicates that the sputtering economy is still having an affect on the overall monetization of online advertising, while certain verticals, especially social networks and gaming, had a significant upswing in ad pricing.

Web Site Ad Price Changes by Size

PubMatic's AdPrice Index reveals there was a 0.7 percent drop across all aggregated Web sites.

Large Web sites (more than 100 million page views each month), however, fared much better than their medium and small counterparts with a 16 percent gain from the previous month.

Medium sized Web sites (between 1 million and 100 million page views per month) showed a less than 1 percent difference in pricing from April to May - they remain at an average 33 cent eCPM. Small Web sites (less than 1 million page views per month) showed a 12 percent drop from the previous month going from $1.29 to $1.13 average eCPM.

Web Site Ad Price Changes by Vertical

The biggest surprises this month came from the social network and gaming verticals.

Social networks showed a very sizable 66 percent average eCPM increase going from 19 cents in April to 32 cents in May. While this is an increase from April, this is still not back to as high as the March average.

Gaming also experienced a strong surge, with the vertical's average eCPM increasing 51 percent. In April, the gaming average eCPM was 66 cents and in May, the average eCPM was $1.00.

The entertainment vertical had a modest 11 percent drop, going from an average eCPM of 33 cents in April to 29 cents in May.

While online news has one of the highest ad pricing of all verticals, they also experienced a similar drop of 13 percent during the same period, going from an average April eCPM of $1.30 to $1.10 in May.

Segment Definitions

Small Web site segment: Less than 1 million page views per month.

Medium Web site segment: Between 1 million and 100 million page views per month.

Large Web site segment: Over 100 million page views per month.

Aggregate Index: Data for All Web sites is computed using a weighting of 65 percent large Web sites, 20 percent Medium Web sites, and 15 percent Small Web sites based on an estimate of overall traffic in the online publishing market.

* Note: The 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.

The PubMatic AdPrice Index has been prepared by:

Albert Madansky, Ph.D., H.G.B. Alexander Professor Emeritus of Business Administration at the University of Chicago Graduate School of Business, and recipient of the 2005 American Statistical Association Founders Award

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

You can also subscribe to the monthly updates of the PubMatic AdPrice Index by going to www.adpriceindex.com and registering your email address.