• by Joe Mandese  @mp_joemandese, July 23, 2009

Some encouraging signs are mounting that suggest the online advertising marketplace may be leading the U.S. ad economy out of its longest recession since the Great Depression. New data from a variety of sources indicate that demand for online advertising has turned the corner as is once again ascending despite the continuing uncertainty of the general economy. The most recent data comes from sources tracking the supply and demand of two different kinds of online inventory - display advertising sold through online ad networks, and pre-roll video advertising - both of which indicate increased demand is once again driving online ad prices up. Those data, while just snapshots for the overall online advertising marketplace, come days after the release of a tracking study showing that the ad spending plans of advertisers and ad agency executives have improved considerably for online and mobile media (Online Media Daily July 20).

 

The most recent evidence, a report released this morning from ad network aggregator PubMatic, shows that the price of the online advertising inventory it tracks has increased 35% since the beginning of this year, when it had reached its low point. The study, which is based on the month-to-month tracking of ad price data compiled from more than 6,000 publishers that utilize networks and ad exchanges affiliated with PubMatic, indicates that online display ad prices still more than 10% lower than they were in June 2008, the baseline month tracked in the report, but they have growing steadily each month during 2009, and jumped up 15% in the last month alone.

"Online ad pricing is turning the corner, possibly leaving the worst days behind us," the report concludes, predicting that, "ad pricing may continue to rise throughout the remainder of 2009."

Importantly, the PubMatic report also shows that advertising sold through "indirect channels" such as networks and exchanges has been growing at an even faster rate - up 47% since January - indicating that the rapid growth of the new sales channel is not, as many publishers fear, commoditizing the price of online display ads, but is finding a new market for their unsold advertising inventory.

A similar picture appears to be emerging in the marketplace for pre-roll video advertising inventory, according to a new quarterly update released by online video advertising network BrightRoll. The report, which is based on BrightRoll's internal data for the second quarter of 2009, shows that the average cost of a pre-roll ad unit is up 3.1% vs. the first quarter of 2009.

But don't pop the pre-roll champagne corks just yet, says BrightRoll Founder-CEO Tod Sacerdoti. He notes that second quarter prices for pre-roll video advertising still are down 10.4% from their year-ago levels in the second quarter of 2008, when everything was looking rosy for the online video advertising marketplace.

Of even greater concern, he says, is the fact that "early third quarter data suggests pricing will continue its downward trend.

"As we have stated previously, we believe this downward pattern is inevitable, but good for the category, as lower rates bring in larger budgets and more total dollars, and pricing is often stated as the most significant issue facing the video advertising business."

That's one way of looking at it. And to back up his point, Sacerdoti notes that overall advertising revenues for online video are up 217% between the first and second quarters of this year. He predicts it will rise 50% to 100% for the entire year based on increased volume, even thought prices may continue to fluctuate during a down economy.

The PubMatic and BrightRoll data, of course, are snapshots of a larger online and general media advertising marketplace that has experienced its worst recession since the dot-com bust of the 2000, and maybe since the Great Depression. More time and data will be needed before an official turnaround can be declared. But indications from an every-other-monthly tracking study on the ad spending plans for key media decision makers from marketers and advertising agencies suggest that their level of optimism has turned the corner and that most major media are on the optimistic side of the ledger sheet, and are continuing to improve, especially online and mobile media.

The most recent Advertiser Optimism Report from Advertiser Perceptions Inc. shows that well more than half of all ad executives plans to boost their ad spending for online display, online search and mobile media over the next six months.