All is not well in the land of digital advertising, at least according to a recent report from ComScore, which reports that a staggering 46 percent of digital ads go unseen by users. It’s important for advertisers to know exactly why this is happening and what they can do to increase their ROI and engage would-be customers.
While there is no shortage of technical commentary and expert opinion regarding viewability issues and the pros and cons of envisioning viewability as a currency for digital banners, there’s something missing from the conversation: the importance of ad placement on the CPM business model.
PCs, tablets, smartphones, apps, websites and microsites need to be considered, and – most importantly – we need to address the assumption that viewability should strictly be correlated to the CPM business model. Technology, standards and specifications directly impact business models, and it’s time we explore the brave new world in which we begin to reclaim the ROI and brand affinity we have lost so much of.
Understanding the Basics
The standard, IAB-3MS (Making Measurements Make Sense), specifies a “viewable ad” as 50% of ad pixels seen by the user for 1 second. This counts as an “impression.” Viewability, then, is only an issue for ads purchased on a CPM model, and does not impact direct response models such as CPC, CPI, CPA, etc.
Now, take the case of a rich media banner on PCs and tablets (a duration of ~15 seconds, Flash or HTML5), and examine viewability issues for two placements, above and below the fold:
Above the fold ad placement:
We should consider that a rich media ad is no different than a video in terms of being able to convey the brand story to the user in 15 seconds. So, is it fair for the advertiser to pay on CPM per the existing definition of 3MS viewability? Can the marketer tell their brand story in 1 second, with half the ad pixels in view? What if the viewer scrolls out of view within a second or two, which is quite typical with leaderboard placements?
Below the fold ad placement:
Scenario 1: Ad never seen, the user does not scroll below the fold. Unseen impression as reported by ComScore.
Scenario 2: User scrolls below the fold, after a certain period of time (most likely more than 15 seconds after loading the page). When the ad is finally in view of the user, a rich media ad might have finished playing its animation (story telling) long ago, as the animation starts immediately after loading the page. What remains in user view is the last frame of the ad. If this is counted as a viewable impression per 3MS, the advertiser is paying the cost of a rich media impression when the user would have probably seen a static banner ad (last frame of animation).
Ad Viewability for Apps vs. Sites
The app ecosystem on smartphones and tablets presents a different challenge for rich media ads, as the ad is in view as long as the page is in view. Mobile web pages, on the other hand, are similar to online pages, hence the viewability issues are similar.
Cost Per Completed View (CPCV) for Rich Media
CPCV is a proven model for video advertisers, wherein the advertiser pays only for a completed video view (typically, a 15 sec video). The same CPCV concept can be applied to rich media as well, where the advertiser can tell their brand story within the banner space in about 15 seconds, with a combination of 3D, motion, video and animation. CPCV for rich media is triggered when at least 50 percent of ad pixels of the last frame are in view. Suspending ad animation if less than 50 percent of ad viewability ensures that the user has viewed the ad completely.
Cost Per Engagement (CPE) for Rich Media
Extending the concept of CPCV for rich media above, advertisers could further engage the user with a video or rich media expandable, when at least 50 percent of ad pixels of the last frame are in view. This CPE model can be applied uniformly across all digital screens without being limited to device specific features such as hover, swipe, touch, etc.
Advertisers can choose between completed ad views (CPCV) and enhanced ad engagement (CPE), while being compliant with 3MS specifications for viewability, and without worrying about ad placement. These viewability assured ad models also help publishers with good page view durations to be rewarded handsomely, while flushing out low value, long tail sites.
RTB and Ad Network Issues
What models should advertisers adopt while bidding for prized publisher inventory using DSPs? CPM, CPCV or CPE… why not a combination of all of them?
Let us consider a scenario where advertisers can run the same viewability-aware, rich media ad for above and below the fold in different business models. A simple use case to illustrate the concept:
- Web page loads on PC or Tablet, along with the viewability-aware ad.
- The ad determines if 50 percent of ad pixels are viewable for 1 sec (per 3MS) as soon as the ad loads, indicating that the ad is most likely placed above the fold. The advertiser will pay for the impression on a CPM model.
- If 50 percent of ad pixels are NOT viewable for a second, as soon as the ad loads, the placement is deemed BELOW-THE-FOLD, and CPM model should not apply for that impression. This is where advertisers need to reinvent the banner business model, and apply CPCV (Cost per Completed View) and Cost Per Engagement (CPE) pricing structure based on completed views or user engagement.
Is the CPM Model for Digital Antiquated?
CPM is the right model for advertisers working with publishers on above the fold placements and custom executions like roadblocks, pushdowns and full screen interstitials. It is a proven model to measure engagement and works well for both the advertiser and the publisher.
The ad viewability problem is more pronounced with ad network and exchange inventory, which constitute a majority of below-the-fold placements unsold by publishers. Advertisers can eliminate unseen impressions by adopting viewability-aware, intelligent ads and a mix of CPM, CPE and CPCV pricing models.
It’s time for us to reinvent the digital banner with built-in viewability awareness.