Ad Nets Find Q1 Less Horrific Than Expected


NEW YORK So far, the first months of 2009 aren't looking as dire as once predicted for the online ad market, according to buyers and sellers. However, many report that business has slowed down, resulting in intensifying pressure on pricing, particularly in the ad networks space.

But the abysmal first quarter that many anticipated-one in which shell-shocked clients either delayed all decision making or went into budget-slashing mode-hasn't happened, said many industry insiders.

"I was one of the people that thought Q1 would be disastrous, but so far it's not that bad," said Jim Spanfeller, president and CEO of While Spanfeller said that business wasn't exactly going gangbusters, "things have been OK. It's not the nuclear winter we feared."

That's not to say there's no uncertainty. "What's different about this year versus last is that we had a lot more knowledge about what was going to happen the rest of the year. Instead, this year many brands are unable to plan long term," said David Rittenhouse, media director, Neo@Ogilvy. "Let's plan 2009 is gone," echoed Mark Kahn, CEO, Traffiq, a company that acts as a go-between for midsize publishers and buyers. "Now, it's mid-January, and buyers are saying, 'Let's plan February.'"

Depending on whom you talk to, the ad nets are having a rougher time than most. Last week, eMarketer cited a recent report issued by PubMatic (a company that helps facilitate various publishers' relationships with ad networks) that found ad pricing for small, medium and large sites had plummeted in the fourth quarter by 52, 23 and 54 percent year over year, respectively, and that average CPMs for display ads had dropped to just 26 cents. According to PubMatic's co-founder and general manager Rajeev Goel, the trend has continued. "January has been pretty light," he said. "What we are hearing from publishers is that they really hope things pick up in February and March."

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