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