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Adify Vertical Gauge Q4 2009

Key Vertical eCPMs Trending up Over Twelve Month Trend

About Adify Over 200 premium vertical ad networks are growing on the Adify Network Builder Platform. Since Adify serves advertising directly to the 17,000 sites in those networks, Adify can track and analyze eCPM trends across verticals. The data in this report includes all Adify-powered networks that have been active since Q1 of 2009, and excludes behaviorally targeted automotive campaigns. This quarter’s report represents all brand campaigns sourced by vertical ad networks that have been served by Adify’s technology, and audited compliant with IAB ad measurement guidelines, since January 1, 2009. The data is analyzed quarterly as part of the Adify Vertical Gauge (AVG) report.

Key Trends in 2009 Q4 2009 shows rising eCPMs for brand campaigns within seven of the eleven verticals tracked in the AVG. Across all verticals, the median eCPM was $6.04, with a minimum of $2.36 and a maximum of $8.95. This represents the highest minimum and median eCPM of the year, and the second highest maximum eCPM.

Contracting eCPM Verticals - eCPM Declines as Sell-Thru Increases The Affluent, Food, Moms & Parents, and News verticals all experienced some contraction in eCPM in Q4 2009. On average, the eCPM in these verticals decreased by 9%. At the same time, sell thru in these verticals has increased by an average of 30%. Every vertical with contracting eCPM has increased its sell-thru rate. This is partly seasonal, as advertising budgets tend to be highest in Q4. With an increase in volume sold, price tends to be inversely affected. This is also in part due to increased selling of non-endemic advertising, for which there are more buyers, but is rarely able to command the same price levels as advertisements endemic to the given vertical. What this amounts to is an increase in sales volume diluting the price in these verticals. Expanding eCPM Verticals – eCPM Increases in Spite of Steady Sell-Thru Rates The Beauty & Fashion, Business, Entertainment, Healthy Living & Lifestyle, Real Estate, Sports and Travel verticals all experienced growth in eCPM in Q4 2009. On average, the eCPM in these verticals increased by 41%, while sell thru increased by 4%. Most verticals with rising eCPM had a decrease in sell through, but Business, Entertainment, and Travel managed to increase eCPM and sell-thru simultaneously.

Detailed Findings Beauty and Fashion AVG – High Growth in eCPM Above and Beyond Seasonal Swing The Beauty and Fashion vertical saw a 64% increase in eCPM from last quarter, and a 57% increase over Q4 2008. This indicates seasonality plays a part in online marketers’ willingness to pay premium rates for media in this vertical. Additionally, the audience’s buying power index as reported in comScore has increased from 176 to 234. As BPI is primarily an index of propensity to spend money online, this may very well indicate that the Beauty and Fashion audience is spending less on big ticket offline purchases, and increasing their spending of smaller ticket online purchases such as cosmetics. Business AVG - Buying Power of Business Audience Yields eCPM Growth The Business vertical was one of the few verticals to boast increase in eCPM as well as sell-thru. The business vertical had a 57% increase in eCPM from Q3 2009 to Q4 2009 and a 39% increase in sell-thru. One reason for the strength of this vertical is that the Business vertical has one of the highest BPI of any Adify powered vertical. At 244 BPI, the audience represented in the Business vertical is even more likely to spend online than the Beauty and Fashion audience during the holidays, making this vertical particularly susceptible to a seasonal swing in eCPM during the holidays. Not surprisingly, this audience is also very affluent, and advertisers appear increasingly willing to pay a premium for reaching them. Sports AVG – Highest eCPM Growth of any Adify Powered Vertical The Sports vertical saw an 87% increase in eCPM in Q4 2009, though at the expense of sell thru, which dropped by 19%. This represents the largest increase in eCPM of any vertical, both in absolute terms and as a percentage increase. This increase is not seasonal, as Q4 2009 eCPM increased by 130% over 2008 Q4 eCPM. This vertical has been effective at selling to high paying advertisers such as sports drinks, auto, and personal hygiene advertisers. Vertical Ad Network Trends VAN Audience Page Views and Loyalty on the Rise      Across the 200+ vertical ad networks that run on Adify, we have seen tremendous growth in the amount of pages users view in vertical ad network sites. From January to December 2009, the number of pages viewed in Adify powered vertical ad networks has more than tripled. This trend is the result of more vertical ad networks adopting the Adify platform, existing vertical ad networks adding sites and content to their network, and increases in traffic to sites within vertical ad networks. In addition, the increase in traffic to sites in vertical ad networks is the result of an increase in repeat visitors. On average, the percentage of unique visitors per month that visit an Adify powered vertical ad network in a given day has increased from 9% in January, up to 14% in December.