The Newspaper Association of America reported on January 29th that news sites are growing:
The average monthly unique audience figures for newspaper Web sites grew by nearly 7.3 million in 2008 to 67.3 million visitors, an increase of 12.1 percent over 2007, according to a new report by Nielsen Online for the Newspaper Association of America. -continue reading.
This is good news except for the fact that Display Ad rates declined at a steeper rate! I’ve gone over before how newspapers seeking vanilla audience growth for profitability is an economically unsustainable revenue model, so I won’t bore you with that again. Below is the latest Display Ad data.
Free to the public, PubMatic.com publishes the most complete information regarding Display Ad price performance that I know of. At the end of every Quarter they publish their research in a convenient PDF available for download HERE, in metaprinter’s sidebar, and on PubMatic.com where you can also find their latest WhitePaper on eliminating Ad Network “daisy chains” for better performance. I recommend bookmarking their site and if you are a publisher then go sign up for Pubmatic’s Ad Platform to minimize the complexity of selling advertising on your web site. Trying it out is FREE (at the time of this writing).
How it’s calculated:
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 pricing data is not representative of the performance of any particular ad network. -more detail in the PDF
Key Takeaways from Q4 2008:
- All sizes of websites (small, medium, and large) were down dramatically from Q4 2007; small, medium, and large sites dropped 52%, 23%, and 54%, respectively, from the previous year.
- All sizes of websites were also down from Q3 2008 to Q4 2008, but the drops were not significant, bucking the trend of larger drops from quarter to quarter throughout 2008; this may be an indicator that the online ad sector got just enough of a boost from holiday advertising to keep ad rates steady.
- Similar to sites by size, all vertical categories also experienced significant drops in their ad pricing from Q4 2007; the biggest drop by a vertical was Business & Finance, which fell from an average price of $2.13 in Q4 2007 to $0.83 in Q4 2008 – a 61% drop.
- Also similar to sites by size, no vertical categories dropped by a significant amount from Q3 2008 to Q4 2008, and some verticals even improved from the previous quarter; the Technology, Sports, Entertainment, Gaming, and Music verticals all had higher ad price averages in Q4 of 2008 than in Q3 of 2008.
News sites:
- Fell from an average price of $0.53 in Q4 2007 to $0.34 in Q4 2008 – a 36% drop.
- Fell from an average price of $0.36 in Q3 2008 to $0.34 in Q4 2008 – a 5.6% drop.
PubMatic is an ad revenue optimization service. PubMatic provides more than 5,500 web publishers real-time ad optimization, which significantly increases revenue while simplifying ad network management. -from their site
Related posts:
Clearly this is a problem for news sites. But what is the solution? Or ‘a’ solution? Do we minimize display ads and sell more sponsorships?