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vCPM – Publishers, viewability isn’t a choice anymore.

vCPM
The value of digital advertising isn't tied to viewability. It's just a way to know whether there's an opportunity for an ad to be seen. So, buyers went out of the scope with vCPM?

Ad Viewability has never been out of topic. Programmatic buyers saw viewability as a prerequisite to direct their ad dollars to the open internet. With the hopes of increasing market share, buy-side platforms capitalized on that fact by enabling buyers to bid on viewable impressions. This, in turn, led us all to a new measurement metric – vCPM.

As a publisher, it’s time for you to consider vCPM in your programmatic strategy, as the advertisers are preferring to bid on viewable impressions. Apparently, buyers favor vCPM as it allows them to pay for the ads on the basis of its viewability, rather than just impressions. 

What is vCPM?

vCPM stands for viewable CPM. To put it simply, it is what advertisers will pay for a thousand ad impressions that are viewed by an actual reader.

Case I: If the ad is rendered on your webpage, but the reader didn’t scroll down or skimmed too fast to see the ad, then it isn’t viewed. The advertiser wouldn’t pay for the impression. 

Case II: If the ad is rendered on the webpage and readers saw the ad for at least a second, then you get the money from the advertiser.

Now, who determines viewability?

It’s MRC.

According to the MRC (Media Rating Council), a publisher can count ad impression as viewable only if the reader has seen 50% of the ad for a time period of more than a second. In the case of video ads, vCPM works in a similar way i.e. when the intended audience views more than 50% of a video for more than 2 secs, then the ad impression is deemed as viewable. 

vCPM = Total Spend / ((Total impressions * % in-view) / 1000)

Standard CPM Vs Viewable CPM

Now that you’re aware of viewable CPM, the next question would be, how it differs from standard CPM?

CPM

As you know, CPM stands for ‘Cost per thousand impressions’. When using CPM, advertisers should pay for a thousand served impression. Whether it is viewable or not, advertisers would pay what they’ve bid during the auction. 

vCPM

vCPM, on the other hand, refers to Cost per thousand viewable impressions. This means that the advertisers pay on the basis of a 1,000 viewable impressions on the ad placed, not simply on the basis of the served ad. The viewability of the ad plays a major role in determining the cost of the campaign. vCPM is more likely to be used by buyers interested in gaining brand awareness. 

CPM and vCPM

As per the above chart from AppNexus, you can derive,

– CPM doesn’t account viewability at all. Publisher with 20% ad viewability will be paid the same amount as the publisher with 80% ad viewability. To put it another way, one of your page with 20% ad viewability will get the same RPM as the page with 80% ad viewability.

That being said, there are exceptions. When advertisers use third-party viewability partners to measure placement-level ad viewability, they will bid only on 80% ad viewability pages/publishers, even if the CPMs are higher than the usual range. Besides, most of the DSPs have the capability to bid on better viewable placements to improve the campaign ROI.

– vCPM will increase when the ad viewability is low. For instance, 20% ad viewability means an advertiser have to buy 5x to get one complete viewable impression. When the viewability is over 50%, just buying an impression is enough.

Ad Viewability Guide For Publishers (2019)

Percent-in-view and vCPM

Adrian Tompsett, VP of Business Development at DataXu wrote on Ad Exchanger that considering just the percent-in-view will eventually skew the decision. With $1000, if a buyer can

a. buy 100,000 impressions which are 25% in-view and

b. buy 30,000 impressions which are 50% in-view,

which one should he/she choose?

When you consider percent-in-view, you could say, it’s the option b. But when you calculate vCPM for both (vCPM for option a = $ 40, vCPM for option b = $66.66), you can see that the advertiser would pay 66% higher for a thousand viewable impression if option b is chosen.

What publishers can learn from this?

Simple. When you’re setting up a direct deal with an advertiser, don’t forget to consider the volume of impressions while trying to explain the effectiveness of the deal. A competing publisher can offer 50% viewability, but they offer lower impressions for the same amount. So, you could win the deal.

But it doesn’t apply to Open Marketplaces. Because in RTB, you trade an impression (not impressions) and it means higher viewability can get you a better CPM. In fact, most bidders look at the domain viewability (average viewability of the ads served in this domain, from the historical data) to determine the CPM.

So, having a better viewability pays you well – in both Open Marketplaces and private deals.

Next Steps

Instead of seeing viewability as the additional metric that you need to worry about, treat it as a crutch for you to compete with other premium publishers. Even the top-tier publisher can only go as far as 100% in ad viewability and you can reach the same by making sure the placements are ideal.

Though audiences could differ, you’ll stand on the same ground as the other publishers in terms of viewability. With the right strategy, you can substantially increase your viewability and increase ad revenue – without the addition of new ad units and traffic.

Automatad Team

At Automatad, we help publishers to monetize better without hampering the user experience. Our products are live across hundreds of publishers, earning them incremental ad revenue with every passing second. You can request a free audit to get an estimated revenue uplift today.

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