With ad pricing from ad networks changing constantly, publishers not only have to keep a pulse on revenue from impressions, but also on which ad network is delivering the best value. In fact, publishers can benefit greatly from diversification in this dynamic environment. PubMatic, an online ad optimization service and TechCrunch 40 company, is launching a new product, Ad Price Prediction, that matches the optimal ad network with every ad impression with real-time functionality.

Ad Price Prediction’s algorithm has been developed using data collected by PubMatic’s ad optimization service over the past three years. The company processes more than 100,000 data transactions per second through ads served for 6,000 publishing customers, and has applied this data to its technology to enable real-time processing.

PubMatic offers a meta ad server that sits between online publishers and online ad networks like Google AdSense, Yahoo Publisher Network and Value Click. Their service helps publishers manage and maximize their advertising inventory by communicating with multiple ad networks to help them find the optimal ad layout and the highest paying ad network. They also provide users with a central dashboard to track all their ad networks and ad configurations.

Ad Price Prediction’s algorithm compares the price difference between behavioral targeting and contextual targeting on a single ad impression and then serves the publisher the higher paying ad. PubMatic says that its premier customers, publishers with more than $5 million in annual online revenue, were able to lift ad revenue by as much as 70% using Ad Price Prediction.

Competitors to PubMatic include YieldBuild and the Rubicon Project. AdWhirl also does dynamic ad optimization, but only for iPhone developers.

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Fourth quarter data is starting to trickle in on how bad the online advertising downturn is turning out to be. The latest data comes from Pubmatic, an online ad optimization service used by more than 5,000 sites large and small. PubMatic’s fourth quarter AdPrice Index, which I have obtained, shows the average rates paid to these sites for remnant display ad inventory (i.e., inventory they couldn’t sell themselves at a higher price).

In the fourth quarter of 2008, the average price for remnant ads across all sites was $0.26 per thousand impressions (CPM), down 48 percent from the fourth quarter of 2007 and a penny down from the third quarter. Normally, there is a huge jump between the third and fourth quarters because of the holiday season, so this is not a good sign.

Pubmatic breaks down its numbers between small (less than one million pageviews a month), medium (1 million to 100 million pageviews), and large sites (more than 100 million pageviews). The effective CPMs was $0.17 for large sites, $0.30 for medium sites, and $0.61 for small sites, all flat or down a penny from the third quarter.

The vertical categories that saw the highest ad rates for remnant inventory were Business and Finance ($0.83, down 61 percent year-over-year), Technology ($0.59 down 41 percent), and Gaming ($0.51, the one category that was up from a year ago, 31 percent). Sports sites were commanding $0.40 eCPMs (down 8.7 percent from a year ago, entertainment sites were getting $0.38 eCPMs (down 40 percent), news sites were getting $0.34 eCPMs (down 36 percent), music sites were collecting $0.30 eCPMs (down 61.5 percent), and scraping the bottom of the barrel were social networks with $0.20 eCPMs (down 54 percent).

Something tells me this year we are not going to need 300 different ad networks sloshing around the same ads everywhere and taking 30 to 40 percent for their efforts.

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The low average rates for large sites reflects the poor returns on social networks, entertainment, and gaming sites. Effective CPMs for social networks are amongthe lowest at $0.37 in March. But there is hope, that was up 69 percent from $0.22 in January.

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PubMatic offers a meta ad server that sits between online publishers and online ad networks like Google AdSense, Yahoo Publisher Network and Value Click. Their service helps small and medium sized publishers manage and maximize their advertising inventory by communicating with multiple ad networks to help them find the optimal ad layout and the highest paying ad network. They also provide users with a central dashboard to track all their ad networks and ad configurations.

Although still in beta, PubMatic has over 1500 users using their service and supports dozens of ad networks. Rajeev Goel, co-founder and general manager of PubMatic said that the investment will allow PubMatic to expand their user base.

See our previous review of PubMatic here, and a video of their TC 40 presentation below.

Update: PubMatic let us know that their first round was Angel so this is Series A.

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There are several engines out there already, including YieldBuild and The Rubicon Project. Now TechCrunch 40 finalist Pubmatic is hosting a contest to draw more publishers to their platform. Every month, the two publishers who see the greatest gains using Pubmatic will receive thousands in free advertising on top “web 2.0 web sites” (i.e. blogs). The amount is still unknown because they are still finalizing the sites they are advertising on. You can sign up for the program here.

PubMatic’s ad optimization engine is similar to YieldBuild and the Rubicon project. Unlike these earlier two, Pubmatic is actually live with 1,300 sites and open to anyone else. The engine serves as a meta ad server that serves the highest revenue ad network for each visitor given the time, geographic, demographic, and layout aspects of your site. It currently supports ad networks like Google AdSense, Yahoo Publisher Network and Value Click. They also provide them with a central dashboard to track all their ad networks and ad configurations. Below you’ll find more information from their TechCrunch 40 video.

Pubmatic has already picked the November winners WinCustomize and BikerOrNot, which they claim have seen over 100% increases in their ad revenue since using PubMatic. YeildBuild and The Rubicon Project have boasted similar increases for their publishers. To a degree, it all just depends on how poorly monetized your site was to start. However, Pubmatic is looking for sensible successes from fairly well trafficked sites and will double check your previous monetization metrics to ensure the increase in revenue is real.

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Spottt (Adbrite)

Spottt helps like-minded sites promote each other for free. Just put a Spottt on your site, blog, or MySpace profile. Every time you show someone else’s ad, they’ll show yours. Spottt was created by AdBrite, with the assistance of Tony Hsieh, co-founder of LinkExchange.

Simple model, 1:1 exchange model. Same as original link exchange program bought by Microsoft.

More useful than original program. Original co-founder of LinkExchange.com on board

Clickable

Clickable provides a service for creating and managing online advertising. Their technology provides campaign management tools and an intuitive interface to view and manage performance and direct spending across all major ad networks. In addition, advertisers are empowered to self-manage their ad buying to yield transformational results.

TC40 anouncements: Ex AOL CEO has join board, adding Adbrite on site, and released in beta.

advertising aggregation tool, slick interface. Manage campaigns on Yahoo, Adwords.

GotStatus

GotStatus is a community-driven systems management and monitoring tool that is aiming to become “Google Analytics for servers.” Users are able to place a snippet of javascript and start managing and monitoring the server side of their web applications in the same way Google Analytics does for their browser side. They will be able to track metrics on items like new accounts per day, database size, and Amazon S3 usage.

Intro is a comparison to Google Analytics, but states that Google only solves half the problem, no coverage of the server.

Another nice interface, provides server stats including email.

Multi-user platfrom, supports customers/ clients. Can customize results with dashboards, widgets.

“User Generated Monitoring”

PubMatic

PubMatic is a meta ad server that sits between online publishers and online ad networks like Google AdSense, Yahoo Publisher Network and Value Click. Their service helps small- and medium-sized publishers manage and maximize their advertising inventory by seamlessly communicating with multiple ad networks to help them find the optimal ad layout and the highest paying ad network. They also provide them with a central dashboard to track all their ad networks and ad configurations.

Pitch: we’re the first company presenting at TC40 that offers revenue opportunities for publishers.

Pubmatic works as the middle man.

Offers optimization tools as well, color choices, sizes.

In alpha testing until today, now in open beta

Sites using the service have seen 70-110% increase in revenue.

Data is pulled from other ad networks.

Also offers dashboard widgets.

Nice idea, I’ll be keen to try it.

ZocDoc

ZocDoc is an online service that lets consumers find, search and book dentist and doctor appointments. Their service is integrated into dentists’ and doctors’ appointment systems so that last minute cancellations can be filled by other patients. ZocDoc also provides consumers with information on specific dentists’ and doctors’ office including what insurance they take.

Intro: there is a problem with easily finding doctors.

Online way to find and book medical practitioners. Site has just gone live now.

Nifty feature: site shows available time slots.

Play acting on stage, guy trips over, role playing using ZocDoc, something different.

Doctor listing include bio details + user ratings…I can feel a law suit coming on in the next 12-18months…but nice to get reviews of doctors from the user view point.

Experts panel and spotty Wifi. grrrr.

Guy likes Spottt…because it’s the only model he understands.

Esther Dyson likes Clickable, heart is with ZocDoc

Some good discussion around ZocDoc and lawyers, no live blogging as Wifi was down.

Experts seems to like ZocDoc, Clickable, Pubmatic. A strong session, I’d think Pubmatic just as the best product but only because I’ve got a publisher bias.

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