News: Press Release

PubMatic AdPrice Index Shows U.S. Economic Slowdown
Continuing to Affect Display Advertising

PALO ALTO, Calif. – (October 15, 2008) – PubMatic (www.pubmatic.com), which provides online publishers with real-time ad optimization, today unveiled the PubMatic AdPrice Index for Q3 2008 (www.pubmatic.com/adpriceindex), a quarterly industry-wide measure of online ad network pricing for publishers. The index shows that online ad prices declined overall this past year by 27%. Publishers of all sizes are feeling the challenges of a nationwide economic slowdown. Small sites continue to command better pricing for eCPMs, now at $0.61 on average in Q3, but these price levels have been declining quarter-to-quarter in 2008. eCPMs for large sites held steady in Q3, but at a lower pricing base of $0.18. The Q3 2008 AdPrice Index is available as a white paper at www.pubmatic.com/adpriceindex and details how the U.S. economic slowdown is affecting monetization for online publishers of various sizes and various verticals.

Data Findings from PubMatic AdPrice Index for Q3 2008:

• The online ad price decline from Q2 to Q3 in 2008 was 21%; throughout the year, display advertising pricing has generally trended downwards across website sizes and verticals
• The Business & Finance vertical remained relatively healthy with $0.86 eCPMs, bucking the trend for the rest of the industry
• eCPMs for Gaming are down 34% from Q1 2008, but there may be improvement as the holiday season draws near, where gaming companies increase marketing efforts to drive sales
• The Social Networks vertical continues to experience weak $0.20 eCPMs, driving the segment to continue exploring new and non-traditional marketing methods to leverage billions of pageviews
• Technology sites have remained constant throughout the past few quarters with $0.50 eCPMs
• Entertainment had the most significant drop of all the verticals, dropping 42% from Q1 to Q3

“Online advertising is one of the key indicators in the U.S. economy, as marketing spend is typically one of the early cuts when realigning corporate expenses. We’ve observed this effect for the past three  quarters and it is reflected in the pricing for all U.S. publishers,” said Rajeev Goel, president and co-founder of PubMatic. “Even though declining budgets are a concern, the measurability of the Internet shouldn’t be discounted. This overall downward trend in the economy may be a call to marketers to segment more of their budgets to methods and tactics that allow them to better measure ROI.”

Key Takeaways from PubMatic AdPrice Index for Q3 2008:

• Smaller sites are affected more closely by the economy, which causes dramatic pricing fluctuations  
• The comparatively higher rates for small sites are caused by a lack of sales force resources, where they rely primarily on ad networks to monetize unsold premium inventory, which is normally sold through a direct sales force
• The political cycle and holiday season could affect ad prices in the short term
• The steady growth in online advertising continues to drive the creation of new ad networks; the change in the economy may favor ad networks that do a better job of measuring value and who can manage their costs according to the fluctuations of ad campaigns

The data released today is the first in a new series of quarterly releases of the PubMatic AdPrice Index. 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. Complete Q3 2008 data from the PubMatic AdPrice Index is available at (www.pubmatic.com/adpriceindex).

PubMatic works with online publishers to automatically find the highest paying ad across hundreds of ad networks, and optimizes how ads are displayed in real-time. It uses over 50 targeting parameters to optimize every ad impression, enabling over 90% of its publisher customers to dramatically improve overall revenue. The company works with a publisher’s existing ad strategy and connects them to hundreds of ad networks while making it simple to manage them through one consolidated revenue dashboard.

About the PubMatic AdPrice Index / Methodology
The PubMatic AdPrice Index is a monthly survey comprised of over 5,000 Web sites, approximately 85 percent of which are based in the US. The PubMatic AdPrice Index is prepared by leading independent statisticians and industry experts Albert Madansky, Ph.D. in the 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, and Michele Madansky, Ph.D., a media and market research consultant and former VP of Global Market Research for Yahoo!

About PubMatic
PubMatic provides more than 5,000 web publishers real-time ad optimization, which significantly increases revenue while simplifying ad network management.  PubMatic works with hundreds of ad networks and has created thousands of new publisher/ad network relationships. PubMatic is venture backed by Draper Fisher Jurvetson, Nexus India Capital, and Helion Ventures. Find out more at www.pubmatic.com.