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Rubicon: Ad network death greatly exaggerated

Written on
Feb 23, 2009 
Author
Edward Barrera  |
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Rubicon: Ad network death greatly exaggerated

adfutures_medium.jpgADOTAS — The online advertising sector continues to grow despite an overall industry slowdown.

December employment reached its highest level since 2002, and $134 million was invested in ad network-related deals in Q4, up nearly 18 percent from the previous quarter, according to the Rubicon Project. While CPMs remained flat, Q4 vs Q3, revenue climbed 30 percent across the board.

“Amidst the screaming headlines of a crashing ad industry, report after report referred to a digital media as the lone bright sport,” said Frank Addante, CEO and founder. “We experienced 30 percent revenue growth in Q4 across our entire publisher base, the majority of which came via the Internet’s largest publishers, particularly those in media and entertainment. There is enormous opportunity ahead in this industry for those who choose to seize it and innovate.”

The Rubicon project, an advertising technology company focused on global ad network optimization, based its analysis for the Q4 Online Advertising Market Report on the more than 45 billion impressions served, up about 60 percent from Q3, for the web’s top publishers across 350 ad networks.

In looking toward the future, Rubicon predicted valuable ad networks will continue to flourish, while arbitragers will fail. It also said that ad quality will continue to be the industry’s greatest risk and that publishers need to “get smart” about channel managment.

– Express your opinion, comment below.





Reader Comments.

While I agree (at least in my space – entertainment/gaming) things are better than other sectors, the abdundance of low CPM inventory is alarming. The winners in the entertainment space will be those that can distinguish themselves by offering high quality/high impact advertising to coveted demos (e.g. 18-35males)

Posted by The Vidit | 1:03 pm on February 23, 2009.

When, by definition, was “arbitrage” ever really a long-term business? Where there is arbitrage, there is opportunity for innovation. Digital media works. It is measurable. A down economy and re-focusing on cutting fat from the marketing budget benefits digital media. I believe the real shake out we have yet to see among networks is between those truly focused on their publishing partners interests, vs. those that just use their publishing partners while truly focused on their owned and operated properties.

As Warren Buffet likes to say, it’s not until the tide goes out that you see who’s been swimming naked. These “hybrid” networks, have a big conflict of interest, and will be left standing naked when the tide goes out.

Posted by R.J. Lewis | 3:44 pm on February 23, 2009.

I’m all for positive spin, but not sure that revenue growth from Q3 to Q4 is news. However, as usual Rubicon is pretty spot on in their “predictions”. Ad quality is definitely a big concern. More and more of the major publishers I speak with would rather take a content widget on rev share than a punch-the-monkey loan ad on straight CPM. And vertical networks (like us) and publishers are becoming wary of taking backfill feeds due to sharp increases in questionable ad content and quality. Arb and commoditized nets are definitely showing signs of decay.

Posted by Kirby Winfield | 3:56 pm on February 23, 2009.

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