The latest PubMatic AdPrice Index shows prices for Internet display advertising dropped by about 53 percent in the fourth quarter of 2008 compared with the fourth quarter of 2007.

Declines occurred in every vertical category, with Business and Finance display ad prices dropping by a massive 61 percent.

PubMatic’s AdPrice Index tracks the price of advertising inventory on approximately 5,500 sites. All prices are for advertising space sold through ad networks.

In terms of the quarter-to-quarter trend, display ad prices dropped only slightly from the third to fourth quarters of 2008.

The average cost per thousand impressions (CPM) was $0.27 in the third quarter; it was $0.26 in the fourth quarter. This still pales in comparison with the average price of $0.50 in the fourth quarter of 2007.

And it also continues a downward trend – the average CPM in the first quarter of 2008 was $0.37 and it was $0.34 in Q2.

Source: Douglas Quenqua, “Display Ad Prices Fell 50 Percent in Q4,” ClickZ, January 15, 2009

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