For years now, we’ve heard grumbling about how impressions and click-throughs, still in many ways the reigning metrics of digital advertising, are outmoded and insufficient means of measuring campaign performance. Sure, a click on an ad can be a meaningful action — but, say the many agitators for change, there are lot of kinds of campaigns where clicks shouldn’t rate, and the act of clicking on an ad doesn’t represent the way users behave with digital media today.
Dissatisfaction with CTR and related metrics have given rise to a call for attention metrics, such those based around time spent with an ad, that many say should be implemented and acted upon in today’s digital media environment. The interest may be there, but there’s no consensus quite yet on which attention metrics should become standard practice. (Hey, there’s an AdMonsters playbook about this, if you’re in the mood for some background.) That hasn’t stopped some key players from trying. It’s been nearly a year now since the Financial Times rolled out a Cost Per Hour (CPH) model for its own digital inventory. Financial Times VP, Advertising Brendan Spain will be part of a panel discussion talking about this stuff at OPS on June 7 — the session is titled “Impressions, Engagement and Time: Unifying the Yield Curve,” and it comes to us with an assist from sponsor Operative. In the interim, AdMonsters reached out to Spain with a few questions about why FT decided to move toward CPH and where it’s taken the publication, and he obliged us with some compelling answers.
As vocal as arguments have been in favor of time-based metrics, most publishers have been hesitant to insist on transacting on them. What was FT’s thinking internally before you decided to take the leap?
When you get right down to it, clicks are an imperfect metric for what advertisers really want, which is the attention of an audience. We think time does a much better job of getting at this.
The growth of digital and social media means it is much harder to hold a reader’s uninterrupted attention online. Our belief in the effectiveness of viewable ads, and the realisation that we need to find a different and complementary metric to CPM, led us to develop Cost Per Hour (CPH).
There are many benefits to CPH, which I’ll discuss below, from increased brand recall to decreased risk of ad fraud.
We also believe that time-based advertising opens the path to a sustainable media business, which goes beyond the impression. By using real-time data, we have shown that the FT has higher than average reader engagement online. Whereas CPM benefits websites with high numbers of pageviews, CPH values websites where users are highly engaged and spend time with the content. CPH is one way to monetize high-quality content like the FT’s in a non-intrusive way.
Additionally, because we can now measure the amount of time a user is exposed to an ad, it is possible to evaluate the performance of all ads on FT.com, assign a time value to each ad, and identify high performing inventory. A time performance audit of FT.com, measuring how long different ad units were in view for amongst different audiences across the site sections and sub-sections.As a result, we are able to use approximately 12% less inventory for a CPH campaign than a standard CPM campaign.
What response have you seen from buyers since adopting cost-per-hour? To what degree is the response coming directly from brand advertiser clients different from the agency response?
Part of our responsibility in introducing time-based advertising is to educate our clients and the rest of the media industry. In the very early days of introducing cost-per-hour, buyers would sometimes tell us that they didn’t have a column for time-based advertising in their spreadsheets.
However, CPH has proven of extreme interest to the media advertising community since its official launch. A whitepaper on the FT’s launch of CPH by consultant Nikul Sanghv has generated in excess of 100,000 downloads. Jay Rosen, NYU professor and media writer, said of the launch: “In my opinion, an important moment in advertising history.”
We are currently working with other publishers around the world on how they can adopt the CPH attention metric, with the knowledge that it could become a standard digital trading currency across the industry.
As of April 15, 2016, the FT has now run 32 CPH campaigns with 24 different partners.
Conventional wisdom says time-based metrics are good for branding campaigns, but performance campaigns still need to count clicks. To what degree do you see that wisdom as being true or false?
CPH is not meant to replace CTR or CPM. If the goal of a campaign is click-throughs, then a CPH campaign might not be quite the right fit. Though an individual ad that’s in view for longer may be more likely to earn a click, a CPH campaign is not designed to maximize clicks.
However, if the goal is brand recognition or recall, then time-based advertising is closer to the actual outcome an advertiser is seeking.
Through in-depth research, we proved that an ad seen for five seconds or more saw a significant uplift in terms of all brand perceptions, when compared to the effects of ads seen for under five seconds. Partnering with advertisers, the FT conducted five digital campaign brand effectiveness studies to measure the impact of the amount of time a user was exposed to a campaign. On average, an ad seen for over five seconds (versus an ad seen for under five seconds) saw a 79% increase in ad recall, 71% increase in familiarity, 51% increase in association, and 58% increase in consideration. The further down the branding funnel, the more important the length of time an ad is seen — low attention has the same limited impact on brand perception as not seeing the ad at all.
If CTR and time-based metrics must coexist, how can that play out in a way that’s manageable and sensible for buyers?
The attention metric has brought new and valuable insights to our digital business, to advertisers, and to creative agencies about the importance attention plays in brand advertising and length of ad creative to maximize impact.
At the FT, CPH has certain advantages over CTR and CPM. For example, CPH campaign of the same spend would achieve 15-20% more time viewed than a standard CPH campaign.
The average digital display ad creative tends to have an animation rotation narrative of between 15-20 seconds. In the vast majority of cases, a user has to see the full rotation to understand what message the advertiser is trying to communicate. Currently, the average ad being bought via CPM is seen for seven seconds. With a five-plus-second filter applied to a CPH campaign, the average ad is in view for 19 seconds, meaning users are more likely to see the full creative rotation.
Again, this means that, for the right campaigns, CPH can be the more compelling and cost-effective choice for buyers.
What kind of standards would you like to see around cost-per-hour, and what do you want vendors to do to push forward standards?
Ad viewability is one of the most important standards when implementing CPH.
In the past, digital advertising has always been bought on impression quantity, which means that every ad was valued equally. As the digital industry has evolved, the CPM model shortcomings have been highlighted by low viewability scores, the threat of ad fraud, and concerns with ad placement and data transparency in automated trading. Selling ads based on viewability protects against all of these shortcomings.
Currently, when the FT sells blocks of audience time attention to advertisers, we guarantee that the client will only be charged for ads that are seen for over 5 seconds of ‘active’ time with 100% viewability.