Some Signs Of A Price Recovery In Online Ads

 

Several ad exchanges we spoke to this week said they were seeing the first increases in display-ad bid prices that they’ve seen in the last couple quarters. 

This suggests ad CPMs are showing initial signs of sequential increases during the fourth quarter

  • Most exchanges pointed to sequential bid increases in the mid-single-digits (versus declines the past couple quarters)
  • Major markets (geographies) are seeing greater growth than smaller markets.

The moves are not big jumps, but the fact that bids have increased at all after months of weakness is good news to those expecting the beginnings of an ad market recovery in Q4.

In their earnings calls, Google and Yahoo said that they were seeing some signs of sequential growth from Q3 to Q4, but conversations with premium publishers and major portals we’ve had the past week indicate a lot of this could be driven by lower-quality network inventory. 

On the premium side, everyone we’ve spoken with has said there is so much inventory in the market that it is very hard to sell premium campaigns, especially major buys across a large audience. Some premium publishers said buyers were backing off from brutal negotiating tactics they were using a few months ago for rock bottom rates on premium inventory, but weren’t exactly paying higher prices either.

The bottom line: Exchanges provide a view of spot market pricing, whereas a lot premium inventory currently being run was sold months ago, in the depths of the recession.  So exchanges should be a leading indicator for a price recovery.

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