Weakness in online ads

At least that’s according to the latest numbers from Pubmatic, an Internet consulting firm. On average, according to the April results, advertisers paid 38 cents per thousand ad impressions, 23 percent less than the previous month. Faring the worst were larger sites, which as a rule attract a less targeted audience (for advertisers it's often all about targeting). From BW's Rob Hof:

The main culprits may be social networking sites, whose CPMs dropped 47%, to 19 cents. This isn’t much of a surprise, since both Google and MySpace have said social networking pages aren’t proving as lucrative an ad venue as some had hoped. (After all, people are there to socialize, not buy stuff, for the most part. In fact, John Furrier makes a good point that the future of online advertising won’t be in mass impressions but in useful content.) But other large sites also saw dips.

Be careful about putting too much weight in any of these numbers. The online ad business is still very new and difficult to measure (Hof offers all sorts of caveats about the Pubmatic results). Also keep in mind that there's a lot of inventory out there, and with the economy slowing down publishers are more willing – even desperate - to make any kind of deal they can. From Valleywag's Owen Thomas:

The business of brokering ads is failing advertisers and publishers. Advertisers don't want to spray their ads across the Web; they want to target them to the right audiences. Publishers, meanwhile, would like to see their products earning uninsulting rates. But what is sold cheaply is valued little. The ad networks which automate the sale and placement of ads have mostly managed to cut prices. Meanwhile, publishers with ever-expanding website audiences are increasingly desperate to get something, anything for their pages, setting off a deflationary spiral.