Advertisement

Ad Nets Find Q1 Less Horrific Than Expected

Advertisement



Many in the ad network space dispute PubMatic's data, questioning its methodology, sample size and lack of transparency. But Microsoft's Rapt, an online advertising inventory management firm that also has insight into pricing trends, backed PubMatic's findings.

Rapt co-founder Tom Chavez, who's now gm, Advertiser & Publisher Solutions, Microsoft, said pricing for remnant inventory (the specialty of many ad networks) is down by as much as 30 percent this year, while more premium inventory is down roughly 10 percent.

However, execs at some of the larger ad networks back up Spanfeller's remarks-that so far Q1 could be a lot worse. "I don't think anyone is going to blow their numbers out of the water," said John Ardis, vp, corporate strategy, ValueClick. "But what I'm hearing is that things are more promising than [what's been reported]." Michael Cassidy, CEO of Undertone Networks, acknowledged that while some clients are being more aggressive in negotiations, "I haven't seen a huge dip in pricing."

According to Cassidy, some networks that rely solely on low-cost, performance-based ads may have seen conversion rates take a dive in Q4. Consumers reeled in their holiday shopping, which led ad nets to increase inventory outputs, diluting pricing. Plus, a quiet January is normal. "It's slow, but [January] was slow in '08 and '07," said Cassidy. "It's not any worse than usual."

One segment of the ad network world that is weathering the economy is online video. Jason Glickman, CEO of the online video network Tremor Media, claims that money continues to flow to his company out of TV. "We actually think Q1 is going to be better than projected," he said.