IT Facts

The use of ad networks surged from 5% of total ad impressions sold in 2006 to 30% in 2007, according to Interactive Advertising Bureau. As online publishers continue to experience growth rates of 20-30% in ad revenue, the race to create new advertising opportunities has left publishers with an excess of inventory which they are selling through ad networks at up to 90% discounts versus direct sales rates. The study finds the trend particularly foreboding for branded online publishers who traditionally earn between $10-20 CPM (the industry term for the cost per 1,000 ad impressions advertisers pay) and therefore risk severe price erosion. Online publisher revenues grew by a healthy 32% in 2007 versus 2006, 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.

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