According to ad-optimizing firm, The Rubicon Project, the average amount advertisers pay publishers to display ads per 1,000 impressions (CPMs) dropped 11 percent from the second to third quarter of 2008. This is based on the experience of The Rubicon Project’s clients, consisting of 307 ad networks and 1,300 publishers.

Ad rates were down 3 percent quarter-on-quarter at social networks and 8 percent quarter-on-quarter at young adult sites. Strangely, news and reference sites actually saw a 36 percent quarter-on-quarter increase.

Meanwhile, the Rubicon Project says that venture capital investment in ad networks dropped from $800 million in the third quarter of 2007 and $400 million in the second quarter to just $241 million in Q3.

Source: Nicholas Carlson, “Ad Net Rates Dropped 11% In The Third Quarter,” Silicon Alley Insider, November 3, 2008

Prices for display ads sold through networks have dropped for the second quarter in a row, dipping below $0.30 on average, according to PubMatic.

Data from PubMatic’s AdPrice index indicates that the average effective cost-per-thousand impressions (CPM) for display ads has declined to $0.27 - down by 27 percent from the average CPM in the first quarter of 2008.

Ad network CPM rates seem to have dropped across the board. CPMs on news sites dropped by 36 percent to $0.36, while those on entertainment sites dropped by 27 percent to $0.33, gaming sites dropped by 26 percent to $0.48, CPMs on business and finance declined by 22 percent to $0.86, and CPMs on social networks declined by 22 percent to $0.21.

Small websites continue to command higher than average ad network rates, with sites attracting less than one million page views per month charging an average CPM of $0.61. However, this average CPM also reflects a decline – of 29 percent – since the first quarter.

According to Zachary Rodgers, writing in The ClickZ Network, the fall in CPM prices is the result of a number of factors, including “the glut of social network ad inventory, the rise of vertical ad networks, and doubts about the branding effectiveness of traditional IAB standard ad formats.”

He also notes that the changes may also be due to PubMatic using more accurate price data!

Source: Zachary Rodgers, “Ad Network Display Prices Continue to Fall”, The ClickZ Network, October 15, 2008

A report from Point Topic on the share of world broadband subscribers in the second quarter of 2008 reveals that Western Europe is the region with the most broadband subscribers.

Broadband use varies from region to region as follows:

• Western Europe: 26.19 percent
• North America: 22.46 percent
• South and East Asia: 21.98 percent
• Asia-Pacific: 15.89 percent
• Latin America: 5.69 percent
• Eastern Europe: 4.96 percent
• Middle East and Africa: 2.83 percent

Point Topic’s findings are based on data provided by resellers and primary suppliers of DSL lines, cable modems, and fiber-to-the-home services.

Source: Enid Burns, “China Surpasses U.S. Broadband by Population”, The ClickZ Network, October 14, 2008

An ABI Research study reveals that more people are accessing social networks via mobile (cell) phones and devices.

Based on an online survey of 500 users conducted in the second quarter of 2008, ABI Research found that 46 percent of those who used social networks also accessed them via mobile phone.

Of those sites visited, the most popular two by far were MySpace (70 percent) and Facebook (67 percent). All other sites came in below 15 percent.

Source: Enid Burns, “Mobile Web Visitors Flock to Social Sites”, The ClickZ Network, October 7, 2008

ClickZ reports that research by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers reveals a decline in the growth rate of online advertising expenditure.

In the first half of 2008, $11.5 billion was spent on online ads. While this constitutes an increase of over 15 percent over the same period in 2007, it’s much lower than the 37 percent increase in the first half of 2006 compared with 2005.

Also, while online ad spending in the second quarter of 2008 was 13 percent the second quarter of 2007, it was 0.3 percent lower than what it was in the first quarter of this year. In other words, online ad growth looks to be dipping.

Nevertheless, online spending was still significant in the first half of the year. Search engine ad spending (about 44 percent of all online ad spending) grew to $5.1 billion, up 24 percent over the initial half of 2007, while display spending (33 percent of all online ad spending) rose by 19 percent to $3.8 billion in the first half of this year.

Most display spending was devoted to banner ads (21 percent). The remainder was devoted to rich media (7 percent), video (3 percent) and sponsorships (2 percent). Meanwhile, spending on online classifieds decreased from 17 percent to 14 percent in the first half of the year and lead generation ad spending dropped from 8 percent to 7 percent of budgets. Email remained steady at 2 percent of online ad spending.

Finally, advertisers continue to embrace performance-based ad models. Performance-based ads, such as cost-per-click or cost-per-acquisition ads were up for 52 percent of ad spending in the first six months of this year, up from 50 percent in the first half of 2007. Meanwhile, CPM-based ad spending dropped slightly from 45 percent to 44 percent.

Source: Kate Kaye, “Online Ad Growth Declines in First Half 2008″, The ClickZ Network, October 7, 2008

Print advertising expenditure in the U.S. declined by 16 percent in the second quarter of 2008, dropping to $8.8 billion. According to Erick Schonfeld of TechCrunch, this marks the ninth consecutive quarter in which print revenues have declined, and at an-ever accelerating rate at that.

As a whole, the U.S. newspaper industry earned $1.7 billion LESS in print ad sales in the second quarter of 2008 than it earned in the second quarter of 2007. In terms of the first half of the year, the industry earned $3.1 billion less. In fact, revenue levels are down to 1995 levels.

To make matters worse, online newspaper ad sales were just $777 million in the second quarter, representing a decline of 2.4 percent compared with the year before.

TechCrunch points out that bundling print and online ad sales isn’t likely to be doing newspapers any favors. Advertisers used to buying bundles will typically drop the entire bundle when making budget cuts, rather than carve off print or online (as the case may be).

Actually, the bundling itself is surely another reason for lower revenues, since bundles typically involve a discount on the combined off-line and online offering.

Source: Erick Schonfeld, “Negative Momentum: Newspaper Ad Revenues Gaining Downhill Speed (Even Online Is Declining)”, TechCrunch, September 5, 2008

More and more U.S. Internet users are choosing cable over DSL, as cable continues to outpace DSL in… funnily enough, speed.

The Silicon Alley Insider reports that while DSL companies, Verizon and AT&T, fall behind in their efforts to deliver faster DSL access, cable companies are attracting the bulk of new broadband customers.

In the second quarter ending June 30, a mighty 69 percent of the 476,000 (net) new broadband subscribers went to the big cable companies, Comcast and Cablevision, while just 31 percent went to phone companies.

Although cable is, at about $6 extra per month, a little more expensive than DSL in the U.S., it offers significantly faster download speeds - which is increasingly an attraction for people looking to stream video online.

Source: Dan Frommer, “Telcos Routed: DSL Customers Fleeing To Cable Broadband”, Silicon Alley Insider, August 4, 2008

Amazon’s revenue increased by 41 percent in the second quarter to June 30, with profit doubling.

Amazon CEO Jeff Bezos said that Amazon benefited from more consumers choosing to shop online, rather than in stores, not least because of the costs involved in driving to stores.

Amazon’s revenue was $4.06 billion in the second quarter, 41 percent higher than the $2.89 billion reported in the second quarter of 2007. The company also reported net income of $158 million (37 cents per share), up from $78 million (19 cents per share) in the second quarter of 2007. Meanwhile, its operating income was up by 86 percent to reach $217 million. This includes $53 million (non-cash) from the company’s sale of its European DVD rental assets and increases in revenues due to the weak dollar vis-a-vis other currencies.

Wall Street was certainly happy with Amazon’s performance. The company exceeded the forecasted 26 cents per share on $3.96 billion in revenue, and, on the strength of the news, Amazon’s shares increased by over 8 percent in after-hours trading, rising by 3.8 percent, or $2.57, to $70.54, in regular trading.

Source: Laurie J. Flynn, “Strong Quarter for Sales at Amazon”, The New York Times, July 24, 2008

While Wall Street accepted Yahoo’s dim performance, it punished Apple. But not because of poor performance.

Apple’s PC sales rose in the third quarter to June 30, and the company continued to dominate the digital music player business. But Apple’s hints that it may lower prices, as well as concerns over CEO Steve Jobs’ health, apparently caused the share price to fall from $166.29 to $149.70 on Monday night in after-hours trading.

Apple’s revenue in the third quarter was $7.46 billion, up by 38 percent over the $5.41 billion reported at the same time last year. Its net income was up by 31 percent to $1.07 billion, or $1.19 a share, compared with $818 million, or 92 cents per share in 2007.

Gross margin was 34.8 percent, slightly lower than the 36.9 percent at the end of the second quarter in 2007. The company’s net income of $1 per share also missed analysts’ forecasts.

Source: John Markoff, “Talk of Chief’s Health Weighs on Apple’s Share Price”, July 23, 2008

Yahoo has little reason to smile. While its revenue was up 6 percent in the second quarter compared with that a year ago, its net income was down by nearly 19 percent.

The company’s revenue was $1.8 billion, compared with $1.7 billion in the same quarter in 2007. Meanwhile, net revenue - excluding commissions to advertising partners - was $1.35 billion, just 8 percent above the $1.24 billion achieved 12 months ago.

Wall Street analysts expected Yahoo to deliver net income for the quarter of $161 million or 11 cents a share. However, the search company reported net income for the quarter of $131 million, or 9 cents a share.

Yahoo was, however, satisfied with the results, noting that profit had been hit by $22 million in costs related to negotiating with Microsoft, the proxy fight with Carl C. Icahn, and related lawsuits.

Despite the poor results, no one, it seems, was all that surprised. Yahoo’s share price increased to $21.89 in after-hours trading after releasing these results.

Source: Miguel Helft, “Yahoo’s Revenue Rises a Bit, but Profit Falls 18%”, July 23, 2008