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Aug 11, 2008

Ad Networks Surge, CPMs Plunge


Ad Networks Surge, CPMs Plunge

The use of “ad networks” surged from 5% of total ad impressions sold in 2006 to 30% in 2007,according to the “Digital Pricing Benchmarking Study” from Bain & Company, conducted in coordination with the Interactive Advertising Bureau (IAB).

As online publishers experience growth rates of 20-30% in ad revenue, the race to create advertising opportunities has left publishers with excess inventory that they are selling via ad networks at up to 90% discounts versus direct sales rates, Bain said.

That trend is particularly foreboding for branded online publishers, which traditionally earn $10-$20 CPM (cost per thousand ad impressions) and therefore risk severe price erosion.

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