Commentary

Advertisers, Agencies: It's OK To Pay For Completed T/V Ad Views!

At my local vegetable stand, I don’t buy produce based on cheapest price. I pass over the discounted tomatoes, close to the perishable date, packaged in multiples and buy the vine tomatoes that cost more but have the color, flavor and texture I want. I’m here to suggest the same kind of thinking can serve us well when planning and buying T/V (Television/Video), and that there is a new, fresher, higher-value “tomato” in town: CPCV (Cost Per Completed View).

In the history of media buying and selling, Cost-Per-Thousand (CPM) impressions has been a reliable standard for understanding cost/value across traditional media vehicles. Some examples where advertisers have been willing to pay higher CPMs for more valuable inventory are:

  • Television / Magazines have commanded CPMs at multiples of Out-of-Home (OOH) / Radio
  • Prime-time television has been purchased at multiple CPMs of Daytime
  • For many years the reach of broadcast networks earned higher CPMs than comparable cable

advertisement

advertisement

Many valuation criteria have been used to justify higher CPMs over the years, including:

  • Audience engagement
  • Commercial clutter
  • Target composition
  • Reach potential
  • Quality of programming
  • Association with programs or events

Most criteria are based on surrogates presumed to indicate qualitative benefits (Do ratings or composition always indicate greater audience engagement or affinity?  Do Emmys really translate to program quality? Do sight, sound and motion really communicate better than a well-placed billboard?)

In television, the advantage in setting pricing has always gone to sellers, due to the control they had on inventory supply and the ever-growing demand from buyers. This imbalance of supply and demand has resulted in advertisers regularly paying CPM increases of 5%, 10% and in some years 20%+ over the previous year.  This in spite of the fact that traditional broadcast, cable and satellite buys have never been able to ensure that an ad purchased based on “opportunity-to-be-exposed” CPM impressions will actually be seen at all, let alone fully seen by the viewer.

Now, the landscape has changed as the creation and distribution of T/V expands into new methods:

  • online video, tablets and smartphones that tap into WiFi
  • Over-The-Top (OTT) content servers like Hulu, Netflix and Amazon Prime (the latter two are currently commercial-free)
  • Internet-connected devices like Smart TVs, Roku, Apple TV boxes and game consoles

As supply of T/V inventory increases beyond the oligarchy of major media companies to the broad frontiers of the streaming Internet, we no longer will have to wonder which half of advertising is wasted.  Simply put, the industry can now demand new formats and choices for how T/V ads can be bought.

One revolutionary new method that indisputably guarantees value superior to any seen before in the linear television marketplace is the Completed View.  With pre-roll and other forms of guaranteed viewability delivered and measured by sophisticated ad-serving platforms that can be verified by third party entities, the advertiser now knows whether a T/V ad has been completely seen, partially seen or not seen – a judgment that is quantitative, not just qualitative.

I hope ad buyers do not get deluded into translating and comparing costs and valuation back to the old, comfortable “opportunity” CPM metric, and conclude that they don’t want to pay “more” on completed views compared to the CPMs of the past. Smart advertisers and agencies should gladly pay a higher effective CPM for the buy based on Cost-Per-Completed View (CPCV), knowing that you cannot compare a ripe new tomato with a bunch of browning, overripe bananas.

The more advertisers and agencies demand premium, viewable, completed views for their T/V ads, the more media providers will be incentivized to incorporate these into their ad sales offerings.  Cable T/V providers have the Set-Top Boxes (STBs) in place to manage CPCV inventory, online publishers are producing video and exploring ways to free the pre-roll from produced video content, and online OTT providers also have the technology to deliver and report on completed views. As the use of big data media exchanges and programmatic buying expands, CPCV measurement will be more available and a standard analytical tool.

So do not be deterred, advertisers and agencies, from stepping up and paying a fair price for guaranteed viewing, leaving the “tasteless, mealy tomatoes” of traditional “opportunity-to-expose” impressions to those who can only see CPMs, while feasting on the delicious new taste of full accountability in ad-placement tactics.

2 comments about "Advertisers, Agencies: It's OK To Pay For Completed T/V Ad Views! ".
Check to receive email when comments are posted.
  1. Rick Monihan from None, April 4, 2013 at 10:21 a.m.

    I'm not convinced the completed view has a distinct value. Just because something can be measured doesn't mean that measurement is necessarily meaningful. However, from one perspective completed views does create something which the digital world needs desperately. That something is scarcity. One reason standard TV "grows" is because there remains tremendous scarcity in various qualitative aspects, and with declining ratings this scarcity actually improves the value of TV rather than diminishes it. If you want quality programming, you have to seek it out and pay for it. If you want low CPM impressions, this also requires some work to determine if the lower impression levels are adequate to meet your needs.
    Digital, on the hand, suffers from a thought process once proposed to me during a negotiation: "If digital impressions are infinite, why do I have to pay so much for yours?" The answer, of course, is you don't. However with all the impressions available and the ease with which websites and video players can be created, stacked, generate impressions in less than meaningful ways, and even easily purchased....you will need to be prepared for what you WILL pay for and it may not be good, particularly if it is a completed viewing experience in a non-viewable situation. I'm not sure a completed view, at the bottom of a long page of text, in stacked video players, is meaningful. I'm also not sure an incomplete view on a video I want to watch is necessarily a bad thing if it's an ad I've seen 30 times.
    There is no doubt video is superior to many other media in many ways. As I pointedly ask people - "When is the last time you talked about a display ad or a billboard with people at work, or with friends?" The fact is video conveys emotion and thought far more effectively than other media. If you accept this premise, and I certainly do, then taking the leap and saying that one must watch the entire video ad to make sure it is effective should be the next point of departure. However, this assumes someone has never seen the ad before. Many times, friends or family have paused to watch 10 seconds of an ad on TV, chuckled or commented, and moved on. They'd seen it before, and it resonated. Completing the viewing experience was not necessary. That said, if a completed viewing experience is important to an advertiser (though I'm hard pressed to think of reasons why it should be too important if you've got a good ad/story which has already created some kind of memory in most people), go for it because it does help create scarcity. But remember to make sure it's in a position to be viewable, too.

  2. Michael Natale from MCM Media Sales, April 4, 2013 at 5:06 p.m.

    The notion that scarcity improves the value of tv is ludicrous...ratings plummet, cpm's rise year after year and television advertisers continue to get boxed in and spend more money to reach less eyeballs which in turn creates a dimisnished ROI. Pathetic.

Next story loading loading..