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Niche websites provide better performance for advertisers than large websites: Study

A study conducted by ad network aggregator company PubMatic has revealed that small niche websites (with less than 1 million page views a month) on an average provide better performance for advertisers than medium websites (with 1 million to 100 million page views a month) and large websites (with more than 100 million page views a month).

A study conducted by ad network aggregator company PubMatic has revealed that small niche websites (with less than 1 million page views a month) on an average provide better performance for advertisers than medium websites (with 1 million to 100 million page views a month) and large websites (with more than 100 million page views a month).

According to PubMatic AdPrice Index, which benchmarks effective cost per thousand impressions (eCPM) data from more than 3,000 websites on a monthly basis, eCPM averages for March 2008 were $1.18 for small websites, $0.34 for medium websites and $0.38 for large websites.

“What we are seeing is that advertisers are relying on the targeted, niche audiences that smaller websites represent, leading to a significant variance in net publisher eCPMs from ad networks depending on website size,” Greg Stuart, former CEO of Interactive Advertising Bureau and a member of PubMatic’s advisory board, has said, adding, “The traditional industry thinking is that larger websites perform better than smaller websites because of improved efficiency, reach, and brand power, but that’s simply not the case.”

In March 2008, 76 per cent of small publishers garnered net publisher eCPMs from ad networks of under $1, compared to 95 per cent of medium and large websites. The large website segment includes a higher proportion of social networking, entertainment and gaming sites than any other segment, the study states.

eCPMs for social networking sites are among the lowest by vertical, though they have increased 69 per cent from $0.22 in January 2008 to $0.37 in March 2008. The low monetization rates on these high volume sites are consistent with recent quarterly earnings statements from Google and News Corp, PubMatic has said.

Rajeev Goel, co-founder and general manager, PubMatic has, however, clarified that PubMatic AdPrice Index tracks publisher earnings, not gross amounts paid to ad networks. Since larger publishers generally have richer revenue sharing deals than small publishers, the gap between what advertisers are actually spending between the two on an impression basis is probably much greater. In addition, the index does not include data about inventory sold by publishers directly to advertisers, Goel has added.

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