Advertisers Could Benefit From Falling Online Prices in US

27 January 2009

NEW YORK: Marketers could be set to benefit from the falling price of online advertising in the US, as content providers struggle to sell their inventories and ad networks cut prices to try and boost demand, according to Advertising Age.

Based on figures from advertising buyers and sellers, AdAge estimates online publishers' costs-per-thousand are down by 20%, and content providers are selling just 30% of their web inventories, compared with 60% normally.

A recent survey by Pubmatic of over 5,500 websites also found that the prices quoted by advertising networks fell by over 40% year-on-year in the final quarter of 2008.

While some publishers are looking to boost prices by moving away from networks and selling directly to advertisers, some observers argue the economic downturn makes this a risky strategy.

Andy Chapman, co-head MindShare's trading arm The Exchange, says that networks are "a pretty lucrative outlet and ensures there's minimal amount of unsold inventory."

However, he adds: "On the other hand, [publishers] are worried about devaluing their brands. If I can go to a network and buy the same inventory I can buy from content site for 30% less, why wouldn't I?"

Data sourced from; additional content by WARC staff