ADOTAS – The IAB and Bain & Company announced the release of a study that suggests that the use of “ad networks” has surged from 5% of total ad impressions sold in 2006 to 30% in 2007. The study is titled “Digital Pricing Benchmarking Study.”
Online publishers are continuing to experience growth rates of 20-30% in ad revenue, and keeping up with these rates has left many with an excess of inventory which they are selling through ad networks at up to 90% discounts versus direct sales rates. John Frelinghuysen, a partner in Bain’s Global Media Practice and study author said “Online publishers are producing more inventory than the market demands, and risk devaluing the premium nature of their brands, particularly in light of ad networks growth and their dramatically lower pricing. Building more effective relationships between publishers and ad networks is critical. In the long-term, both parties will benefit from gains in ad network CPMs.”
Other key findings in the study include online publisher revenues grew by 32% in 2007, yet ad network revenues grew more rapidly(in excess of 50%), as marketers boosted online spending. High demand for premium video inventory resulted in CPMs 2-3 times greater than display ads on average. Also, found was most publishers in the study lack information to closely measure the impact of cross-platform sales, though most indicate focus on using cross-platform to drive volume, not price.