The Ad Network Business: Not Doing So Bad, After All?
Remember that news about a slump in online ad networks? Bogus, says Frank Addante, CEO of The Rubicon Project. He says ad rates are up 20% in the last two months among the biggest players.
Who is Addante, and why should we listen to him? His company operates the equivalent of a trading desk for publishers and ad networks. Publishers allocate their ad inventory to Rubicon, which manages the relationships with the ad networks, shifting dollars between networks to get the best ad rate. So Rubicon can see all the rates being paid for impressions on the top 154 networks, including biggies like Advertising.com, AdBrite, BlueLithium, Google AdSense, etc.
Addante says new vertical networks organized around a specific target audiences are getting a higher CPM, and bigger brand advertisers are starting to use networks more. Also, he says international sales are growing fast.
Last month PubMatic told us that overall CPMs for Web publishers had fallen 23% between March and April. Like Rubicon, PubMatic also manages/optimizes ad networks for publishers. So which one is right? It's possible that both are, because they're looking at different data sets. Pubmatic was looking at rates across 3,000 publishers. Rubicon is also looking at thousands of publishers, but only the inventory placed on the top 150 or so ad networks. Anyone else want to hazard a guess? We're all ears.
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A little clarity here please? The only number we have here is 20%. And then you give data about what this guys company does. So where did this 20% from and who is counted in it? Any specific categories? Any specific sizes?
It is pointless numbers pulled out people's butts like this cause market confusion. At least I'm glad you put a question mark at the end of headline, but I think you should have received some more data, and if this guy had that data - you'd have that data and it would be in this article.
DigitalMcD— when we first launched, there was some confusion for publishers about whether we were an ad network. In the months since our launch we’ve spent a lot of time with both publishers and ad networks showing how we are in the business of optimizing ad networks. Typically, publishers provide us with all of their non-direct inventory. For a large site, even one with a strong direct team, this can equate to millions of impressions per day. For medium size sites who don’t have a direct team, this is likely all of their traffic. As for scale, we have optimized close to 21 billion ads, with steady steep incline of growth.
Henry— good question. The way we measure CPM internally is based on what we call “rCPM,” which is the CPM measure for all impressions, not just so-called “paid impressions.” Overall, our revenue numbers are way up, due in part that we are growing quickly. Month over month change from existing sites has seen rCPMs increase—which equates to overall dollar amounts going up.
JMac – the biggest players include the top 5-10 networks in the Comscore list, run across +20 vertical channels, on traffic coming from nearly over 30 countries around the world. We track data from across all of these variables… and many more. Admittedly, +20 billion impressions is a limited sample size (given overall size of the web,) but indicators like this are designed to measure overall macro trends and begin to ascertain their impact on the market.
Overall— I think the most important points are:
1. We have not seen any systemic decrease in CPMs or revenue— in fact, things are trending upwards for the sites we are working with
2. Changes in CPM can be affected by so many factors: time of quarter/year, increase in impressions, change in geography of inventory, change in the number of impressions per unique, direct sales filling more or less inventory, change in volume by ad size, which ad networks a publisher is using, type of content, does it have UGC, and so on
This is a confusing market— that is why more than 6,000 publishers have applied for our beta. With all the new ad networks out there, it will only become more confusing for publishers and for market watchers.
Actually, the binoculars are reflecting a mirror, which is reflecting a stock chart that is skyrocketing.
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