the Rubicon Project’s Q4 Market Report Uncovers Opportunity for Web Publishers & Ad Networks Amids

Bucking the Trend: CPMs Stay Flat While Revenue Rises

LOS ANGELES, IAB SUMMIT - FEBRUARY 23, 2009 - the Rubicon Project, an advertising technology company focused on global ad network optimization, divulges noteworthy market data and industry trends in the fourth quarter edition of its 2008 Online Advertising Market Report series. From its independent position between ad networks and Website publishers, the Rubicon Project offers a unique perspective on the changing Internet advertising landscape.

"The end of 2008 demonstrated, with greater urgency than ever, the need for innovation in Internet advertising," said Frank Addante, CEO and Founder. "Amidst the screaming headlines of a crashing ad industry, report after report referred to digital media as the lone bright spot. We experienced 30% revenue growth in Q4 across our entire publisher base, the majority of the which came via the Internet's largest publishers, particularly those in media and entertainment. There is enormous opportunity ahead in this industry for those who choose to seize it and innovate."

the Rubicon Project, which is now optimizing ads for premium publishing customers at the pace of 25 billion per month, based its analysis for the Q4 Report on the more than 45 billion impressions served (up about 60 percent from Q3) for the Web's top publishers across 350 ad networks. Q4 Market Report highlights include:

A changing industry

• Despite the overall job slowdown in the advertising industry, the online sector was the one bright spot. At Internet media companies and web-search portals, December employment reached its highest level since 2002
• $134 million was invested in ad network-related deals in Q4, up nearly 18 percent from the previous quarter
• Broader economic turmoil didn't drag down ad rates for publishers in the Rubicon Project's marketplace: CPMs remained flat Q4 vs. Q3, and revenue climbed 30% across the board

Internet dominates

• For the first time ever, the Internet overtook traditional channels for holiday shopping and as a news source as hungry readers turned to the Web for political info one of the most notable elections in American history - to the benefit of news sites who were able to turn traffic influxes into real revenue (example within report.
• Traffic to all sites in the Rubicon Project's News & Reference channel jumped 50- 75% percent on and after Election day

News & Reference

• Average CPMs in the News & Reference vertical up nearly 17 percent from Q3
• Publishers equipped to deal with the traffic saw better performance, as evidenced by one premium news publisher working with the Rubicon Project able to capitalize on a sudden influx of traffic. The site optimized a 587 percent spike in ad impressions without any drop in fill rate or CPMs (graph 1)

The emerging metric to gauge growth: CPM + Total Revenue

• Traffic to the Rubicon Project's Entertainment channel grew by 75% during the quarter
• While average CPMs trended downward in Entertainment due to a flood of inventory, publishers didn't suffer -- overall revenue shot upward. These sites generated 1.9 times the revenue they did vs. Q3, for 70% revenue growth -- and that's considering they had 2.4x, or 78% more, available inventory (graph 2.)

Thoughts for the Future

• Valuable ad networks will continue to flourish; Arbitragers will fail
• Ad quality will Continue to be the industry's greatest risk
• Publishers need to "get smart" about channel management To access the full Q4 Online Advertising Market Report, as well as past published reports for free, visit: http://www.rubiconproject.com/product/market-report.

About the Rubicon Project

About the Rubicon Project Based in Los Angeles, the Rubicon Project launched in 2007 on a mission to automate the $65 billion global online advertising industry. Responding to one of the largest problems plaguing website publishers today - monetizing ad space that goes unsold (as much as 70 - 80 percent) across a fast-growing number of global ad networks - the Rubicon Project pioneered the category of Ad Network Optimization (ANO). Backed by $22 million in funding from Clearstone Venture Partners, Mayfield Fund, and IDG Ventures, the Rubicon Project developed its patent-pending Smart Matching^TM technology, which uses billions of pieces of proprietary market data to match each publisher ad impression to the best money-making opportunities from ad networks.

The company serves 1350 premium customers (publishers like Gannett, Salon, Washington Post/Newsweek Interactive and American Greetings) by optimizing more than 25 billion ads each month across more than 380 top ad networks. Reaching more than 320 million unique Internet users, the Rubicon Project is one of the largest sources of ad inventory and reach on the Internet and the preferred source of targeted, audience-segmented inventory for ad networks around the world. The unique combination of ad network optimization and Smart Matching^TM technology drives revenue lift ranging from 30-300% for the Rubicon Project's customers.

Web sites who Demand More From Unsold Ad Space should visit: http://www.rubiconproject.com.

Read Frank's blog at: http://www.FounderBlog.com/

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