I have a natural inclination toward pessimism – it’s in my DNA, please don’t judge me. As I began to hear about viewable impressions, my mind started to crank out hypotheticals on how it would “really” work, as opposed to the utopian descriptions and overviews written in trade publications or presented in discussion panels by thought leaders. I understand the optimism people have preceding a new technological product rollout, but I also know that new isn’t always better.
My lens is that of a web publisher – I have experience as Senior Inventory Analyst and Senior Account Manager, which entails analyzing countless excel spreadsheets to optimize performance based on multiple data points. I look at CPMs, Impressions, and performance metrics all day long, and then I find trends in that data, and find ways to make campaigns or revenue opportunities perform better.
So here it is, my hypothetical and completely antagonistic viewpoint: I believe that, as a publisher, viewable impressions will not make your inventory more valuable. As an advertiser, it will not reduce costs or improve campaign performance.
If a Tree Falls in a Forest…
For those that are unfamiliar with the term, according to Principle #1 of the (3MS) as outlined through the IAB, ANA, and 4A’s Guiding Principles of Digital Measurement, a viewable impression is when a digital ad impression is counted only when an ad is in focus or “seen” on the web page. The proposed threshold is currently 50% of pixels in view for one second within the viewable area of a visitor’s browser window. If the browser does not see the minimum threshold required, it will not be counted as viewable.
Advertisers do not want to pay for ads that a visitor never sees. However, as publisher sites work now, all ads are served immediately once the page loads, the impressions are counted, and all the costs are applied. This happens regardless where ads are located on a page, or whether the browser window actually is in view of that ad. Viewability will essentially enable advertisers to eliminate the cost for any unseen ads, which is a legitimate argument and sounds good… in theory.
However, it can be proven mathematically that it might be in the advertiser’s best interest to keep the current cost structure. This obviously depends on the number of ad placements currently sold on a publisher website, so please bear with me for a few more moments.
Publishers justify the current ad serving model by charging a fractional cost for any ad that is “below the fold” on their website. Along with supply and demand, the risk factor is already baked into the reduced cost of the media, anticipating that the ad may not be seen by a visitor and may not perform well.
With the model in place for viewability, a publisher will “serve” fewer ads, inventory will diminish and so will revenue. To offset this loss, the costs for all viewable ads will increase in relation to the displaced revenue, driving up CPMs across the site.
In addition, any ad visible will be considered the same value as a premium placement as it is guaranteed to be displayed within the user’s window. The reduced cost to offset risk no longer applies. This will also reduce the number of impressions than an advertiser can deliver for the same budget.
Furthermore, if a publisher doesn’t offer an advertiser enough scale during the proposal, that publisher may not be included on the media plan when the buyer makes their decision.
Case Study No. 1: The Publisher
A publisher currently serves 10 ad calls on every page of their website, driving 100 million page views, with 1 billion ads served monthly.
Four ads are above the fold (assuming 100% viewable), and are considered premium at $3.00 CPM each, earning $12.00 for each page view.
Six ads are below the fold, and are at a reduced cost of $0.75 CPM each, earning $4.50 for each page view.
With viewability, it’s projected that 75% of the below the fold placements will not be seen. This will eliminate revenue for 450 million ad calls at a value of $337,500 dollars per month. (Note – the average measured viewability range is 27% for publisher placements, 19% for ad network placements.)
This $337,500 must be made up by the publisher to retain profitability, so that lost revenue is evenly distributed to 100% of the viewable placements, all considered “premium” as they are viewable and each ad unit now earns a CPM of $4.13.
So publisher eCPMs have increased and the available inventory has decreased. Now let’s take a look at the impact on performance:
Case Study No. 2: The Campaign
Using the same example above, an advertiser has a campaign objective to acquire new customers. Their CPA goal is $300, and they have been purchasing inventory with a publisher at an average eCPM of $2.00. This serves approximately 5.55 million impressions above the fold ($3 CPM), and 4.44 million below the fold ($0.75 CPM), totaling 10 million impressions.
If the publisher at optimal performance is able to convert 100 users for every 10 million impressions served, this calculates to a CPA of $200, which is well within the client goals.
With viewability, that same publisher in the example above has been forced to increase the CPM to $4.13 to account for lost revenue due to the reduction of inventory.
For that same $20,000 budget at $4.13 CPM, only 4.84 million total impressions can be served, which will only convert 48 users, thus driving the CPA up to a whopping $413 dollars.
Conversions would have to almost double compared to the original campaign, while also serving around 700,000 less impressions (4.84 million compared to the original 5.55 million 100% viewable, above-the-fold impressions). So, the original above-the-fold priced impressions would still outperform the new campaign by converting 55 users, compared to 48.
This $413 CPA is too far outside the threshold of the client goals, and the advertiser will more than likely cancel the campaign with the publisher. As a result, the publisher is no longer on the proven performers list and will never receive another media dollar from that advertiser again.
Basically, the mathematics in this example proves that viewability is bad for both the publisher and advertiser.
When It Rains, It Pours
Another argument that advertisers have for the application of viewability is the false attribution of view-through conversions. Some web publishers overload their web pages with below the fold advertisements to serve more impressions and to capture conversions because it is the last ad call “seen” before a visitor converts a transaction on an advertiser’s website.
False view-through attribution muddies the ability to track where an actual conversion came from, and can result in an advertiser spending money with the wrong publisher website. Therefore, if an ad is only served if it is actually seen by a web visitor, it will prevent view-through conversions from being attributed to the wrong publisher site.
Now I’m no genius, but if I were a publisher that purposely overloaded below the fold advertisements to attain more view-through conversions or had no qualms about selling non-performing inventory, I might come up with a few workarounds to ensure all ads are seen on every page.
I imagine it’s possible to create a website where an auto-scroll could be enabled, forcing the visitor to watch as the browser window scrolls from top to bottom and views the entire web page therefore calling all the ads before the user can interact with the site.
Also, a minimized view of the web site could be loaded, somewhat similar to microfiche, which would show every ad call on the page, and then the page could “zoom in” again to normal size. Either method will counter the purpose of enacting viewable impressions in the first place. Problem solved.
For legitimate web publishers, they may be forced to top-load more ad calls above the fold. Making websites more cluttered, which may also affect user experience, by forcing them to view more ads at the top of the page, and scroll further down for relevant content.
So, now I’ll ask you, as a publisher, do you really believe viewable impressions will make your inventory more valuable? As an advertiser, do you really believe viewable impressions will reduce costs or improve campaign performance?
*Reference: (http://www.iab.net/media/file/VIEWABLE-IMPRESSION-ADVISORYfinal.pdf)
**Average measured viewability range is 27% for publisher placements, 19% for ad network placements.