More On Viewable Ads: The Need For A Price Correction

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Last week I got some people really riled up about viewable ads.  Thankfully, that was my intent!  The fact is, this is an opportunity to discuss how to make online advertising more effective and more efficient, which will pave the way for the next 10-15 years of growth!

Lets recap, shall we?  Apparently, according to comScore, 31% of all ads viewed online are considered un-viewable, for various reasons.  I made a statement that below-the-fold ads should be considered less-premium, and priced accordingly.  I stand by that. 

The remainder of the viewable ads issue does relate to fraud, as well as to unloaded ads, etc.  My contention is a simple one:  if an ad is not viewable, then it has no value.  That leads us to the issue of a price correction based on opportunity to see, or view, a relevant ad.

I think we should be focusing on this area of pricing. One of the key drivers for the growth of online advertising has been supply.  Supply of online inventory far outpaces the eventual demand; however, the availability of premium inventory has been finite, and prices tend to reflect that.  The integration of data, targeting and other creative applications of technology has done a good job of increasing the value of what was previously considered to be “remnant” inventory. That application of technology should be recognized and rewarded, but there needs to be a perceived end to supply if we can realistically foresee an increase in the overall value of online ads.  To expect that we can increase prices against an almost limitless supply of inventory is false, and the viewable ads issue presents an opportunity for us to reset the stage properly.

Whether or not you agree with my proposed breakdown of viewable vs. non-viewable ads, you should agree that there must be a way to increase the demand for online ads.   By placing a “premium” tag against standard ad placements and guaranteeing they are viewable, whether through third-party verification or some other means, you can maintain a premium price. 

The same goes for applying a brand-safe tag to that inventory.  If you can guarantee the safety of the message and that it will be viewed by the right target consumer, then you have something to hold up against an increased price. Premium advertisers will value that, especially if those guarantees translate to increased performance for their messaging.  The performance is based on engagement, not click-through.

The same can be applied for long-tail inventory that is willing to undergo the same strict set of quality reviews, all of which are currently available to advertisers, though not established as standard must-haves.  If the industry can push to have these elements become a standard piece of the puzzle for online media buying, then the perceived value of the inventory will increase.  If this happens, then we could also see the emergence of a true online upfront for advertisers, in which advertisers look to lock in inventory early in the year because the laws of supply and demand will dictate that pricing could increase later on a spot or scatter basis.  In my humble opinion, all of these self-installed regulations would result in higher prices for our inventory, and increased value for the industry as a whole. 

Of course, this does mean that less valuable inventory on small to medium-sized sites that doesn’t fit these regulations will end up with purely performance-based inventory -- but that’s OK!  There is nothing wrong with performance-based pricing.  Google has proven that, and affiliate networks exist because they work!

This is an issue that we can address quickly, and if we tackle it properly it could be a boon for the entire industry.  I don’t know about you, but I was raised to think that a challenge represents an opportunity -- and opportunity is a very, very good thing.  Don’t you agree?

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12 comments on "More On Viewable Ads: The Need For A Price Correction ".

1. Ari Rosenberg from Performance Pricing, LLC
   

   commented on: April 4, 2012 at 1:34 p.m.
   When you pay for something you expect something in return -- I pay for a movie ticket I expect to see the movie -- if the projector breaks I get a refund. Selling viewable impressions is what we owe clients who buy ads from us AND it could actually make our medium even more valuable than TV, print, and radio for example, neither of which guarantee an ad is "seen" and or "heard" -- yes Cory this approach would ultimately raise prices (which makes me laugh a bit b/c when you were a buyer you did a pretty good job lowering prices) but more importantly, selling viewable impressions would increase our credibility.
2. Marc Podell from Jun Group
   

   commented on: April 4, 2012 at 1:48 p.m.
   I whole heartedly agree that there should be a premium placed on viewable ads vs. non, but at the same time, what is premium? If an ad is above the fold on some random long-tail site or one that "Index's" high for a target audience, is that still considered premium? Banner and video ad networks play this game daily. They provide site lists to clients of sites that are "contextually relevant" or "index high against a target audience" and of course they all claim to have "premium inventory". If that's the case, then why don't they provide back end site level reporting? A few reasons.. 1 - 90/10 rule - 90% of the impressions will run on 10% of the sites and those are not the "premium" ones. 2 - These "premium" sites want a higher CPM for their inventory, so why would any network who is running a $100K deal, run impressions on sites that want 70% rev-share vs. the long-tail garbage sites that they only have to give 30% to? 3 - They will run a small % on the true premium sites for the sake of a screenshot (those never get faked.. right....) So if these companies provided back end site level reporting, their clients would see that the "premium network" they are buying is not so premium after all. As far as brand safety goes.. they all claim to do have the ability to do it and they can to a point, but when their larger inventory partners start re-syndicating the inventory out, you can forget about brand safety. As was written about here: http://bit.ly/HreyM8
3. Jason Krebs from Tremor Video
   

   commented on: April 4, 2012 at 2:01 p.m.
   Right on Cory, and your readers should know we've solved this problem for video ads. If a viewer doesn't engage with your video creative, you don't pay. Engagement guaranteed at Tremor Video.
4. Ari Rosenberg from Performance Pricing, LLC
   

   commented on: April 4, 2012 at 2:47 p.m.
   @ Marc Podell way to break it down -- so dead on!!! @ Krebs -- do you sell CPE priced ads at Tremor? :)
5. Rick Monihan from None
   

   commented on: April 4, 2012 at 3 p.m.
   The only point of departure I have is that below the fold becomes a meaningless term - it's not less valuable for one reason. That reason is: "Viewable is Viewable". In fact, it's possible that a below the fold banner could be more valuable than above the fold banner. How? Consider an above the fold banner which has 2 seconds of view and is then scrolled off and a below the fold banner enters the screen and gets 2 minutes of view time. Would you still say the above the fold banner is more valuable? I'd argue that just because it's above the fold doesn't make it more valuable. It's the issue of viewability which is paramount. Regarding the premium - each publisher needs to determine its own premium based on its response to viewability. Right now, if the industry eCPM is $1.00 and overall viewability falls 31%, then the eCPM should rise to $1.45 just to offset lost impressions. What is more likely is that revenue will shift away from ad networks and back to truly premium publishers who have been operating above board to begin with....and the CPM jump will appear accordingly.
6. Nick D from ___
   

   commented on: April 4, 2012 at 3:08 p.m.
   "When you pay for something you expect something in return".
   This is almost the exact definition of a storm in a teacup.
   When an advertiser buys print advertising, they do not buy a certain number of pages. They don't buy a certain number of people. They buy an *opportunity to see* - in some copies of the title, the ad will be shown; in others, people won't get to it. It's just the same online - below the fold ads have an opportunity to be seen, and while we can factor in that OTS (rather than guaranteed display) to the pricing, to make anything more of it is ridiculous.
   I get that comScore is making hay while the sun shines, and the journalists are running with it, but again - if I developed research that (shock, horror!) not every single ad in a newspaper is actually viewed, and shouted it from the rooftops, who would care?!
7. Ari Rosenberg from Performance Pricing, LLC
   

   commented on: April 4, 2012 at 4:13 p.m.
   Hey Nick D-- this is an opportunity for "us" to rise above the promises made by other mediums that "ads may be seen." Why be like print and others when we can be better in a very simple way. Buy ads online and we make sure they are seen.
8. Curtis Bahr from Saatchi & Saatchi
   

   commented on: April 4, 2012 at 6:43 p.m.
   @Nick D You're right, nobody would be shocked that not every subscriber sees every ad. But why should we be complacent and say that digital ads can't be held to a higher standard? I don't want to pay more, but I'd like to see more of the media mix move online. There are a number of tools available now (AdXpose from comScore) that can show you what percentage of your ads are viewed. Please note, I didn't say above/below the fold; their javascript tags can show whether or not the ad was actually visible on screen (regardless of placement). I've seen (ex)partners with a less than 60% inview rating. I'd be a fool not to make use of this data, and so would "premium" partners.
9. Haren Ghosh from Symphony Advanced Media
   

   commented on: April 4, 2012 at 6:55 p.m.
   The viewability aspect of an online ad is a tricky subject. I think ComScore study (re: 31% of all ads are viewed online) draws a generalized conclusion. We (at Symphony Advanced Media) have found out that viewability varies by sites, ‘fit’ between the site and brand (e.g., a medicine ad on WebMD), creative formatting, brand imagery attributes, etc. For the pricing determination or site level return on impressions investment, we have used site level unique visitors, impression cost by sites, viewaability aspect, among other important drivers, and established a comprehensive scorecard for our clients.
10. TheTruthOnVideo ? from The Truth on Video
    

    commented on: April 4, 2012 at 9:12 p.m.
    No wonder it's so hard for advertisers to take online video networks serious. You bicker with each other like little kids. You never see Hulu, or Yahoo!, or Google engaged in these petty disputes. Instead of focusing so much time in what each other has to say in a Mediapost blog you should be more focused on elevating your presence among the industry. The big boys (Y!, Goog, Hulu, etc) are eating your lunch while you fight like pre-schoolers in the sandbox. You want to be publicly traded bil $ companies. Well start acting like ones....
11. Arlo Laitin from Cardlytics, Inc
    

    commented on: April 5, 2012 at 9:32 a.m.
    @Curtis "There are a number of tools available now (AdXpose from comScore) that can show you what percentage of your ads are viewed" - There is a difference between what % of ads are "viewed" and what % have an "opportunity to be viewed". The ComScore research just scratches the surface of the larger problem - that is, most online display ads are not viewed, engaged with, or clicked. That's the real 800 lb. gorilla in the industry. Always has been. @Krebs- good on Tremor, I believe that is the right approach.
12. Kevin Williams from Padvertisement.com
    

    commented on: April 5, 2012 at 10:26 a.m.
    Not to toot our own horn but: Our platform Padvertisement is located on the front counter of hotels facing traveling consumers as they check in. Our hotels are guaranteed to have X daily traffic booked ahead of time. The summer campaigns are fantastic! The Ads are full screen iPad ads which are the only moving images in a hotel lobby. We also drive traveling consumers to our platform by handing them a card at check in that reminds them to visit the platform for local, regional, and national discounts PLUS really neat videos. Yes, in the evening when folks are sleeping the ads will run at a CPM rate. This is an age old issue. We feel that with our ads, when the lobby is full and busy during the day time hours you are making up your CPM rate by getting views and interactions with our platform by more than the 1.5 average travelers we tell you we are targeting from each room. Sometimes advertisers are getting 4 - 10 people at a time watching our screens. Some hotels are adding second and third iPad devices for travelers to engage with. So you see... It is really all about placement. We also provide CPM and engagement click through analytics at the end of our campaigns. Every display business out there should track that information for advertisers in my opinion.

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