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Feb 3, 2008

REVIEW: Adbrite

Adbrite is the fourth largest advertising network. Thus, the company is able to deliver a high volume of advertisers to iChannel participants.

Adbrite is easy to use for the ad buyers and sellers. For the seller, any IChannel can apply and get instant approval. Google and Yahoo restrict network participants. Adbrite also offers more ad formats including CPC text, CPM banners, full page ads, and more.

Adbrite fails on the economics.

Buyers at Adbrite tend to low-ball with bids like $0.10 CPC or $1.00 CPM. Thus the eCPM is low.
Even worse, when an IChannel starts with Adbrite, buyers pay the eCPM of the lowest buyer, not the maximum that a buyer bids. Thus, a buyer that bids $0.50 CPC pays the IChannel $0.04. The $0.04 is set by other buyers at the IChannel who bid $0.04 and received the click from the IChannel.

If the IChannel sets a high eCPM like $5.00, then no AdBrite ads are delivered. The IChannel has no track record to draw higher paying advertisers. Thus, the IChannel must start with Adbrite's automated pricing system and accept low rates. As the IChannel establishes a track record, you slowly increase the cut-off eCPM to increase the minimum accepted bid.

Note that the AdBrite CEO reports an average CPM of only $4.00 for full page ads. This is less than 10% of the reasonable rate typical for these disruptive ad formats.

Moving Forward

The company recently received $23 million in new funding and promises to move upscale with its services. They also promise efforts to target a better class of advertisers who are willing to pay higher prices.

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