In an effort to “de-risk” the cost of buying media, a mobile ad developer is introducing a new model that charges advertisers based on the amount of time a consumer is actually exposed to their ads. The model -- which is being introduced today by Sled Mobile, which has been marketing high-impact mobile ad units via a network of major publishers -- is called “cost-per-second," or CPS, and is intended to replace conventional media cost models like cost-per-thousand and cost-per-click, which charge based on gross impressions or actions.
“This is the CPC for brand advertisers,” says Guldimann, referring to the fact that performance marketers like cost-per-click models, because they only pay for actions that are potential leads or conversions. While CPC might be too high an order to ask of branding campaigns that don’t necessarily have a call-to-action, Guldimann says the cost-per-second model is its equivalent because advertisers are only paying for the time they have a consumer’s attention.
“They don’t have to take any risk for their brand advertising,” he says, adding that the model has two main criteria for ads to be successful:
“One, the ad has to be interruptive. And two, it has to be controlled by the user,” he explains.
Guldimann says those criteria are exactly what Sled Mobile’s formats are designed to do for advertisers and consumers on mobile screens, and in the six months that it has been operating it has fielded more than 80 campaigns across 20 different publishers -- companies such as AOL, Bonnier, Time Inc. and Wenner Media -- that shows consumers will engage with high-impact ad units that they can control by turning on and off.
Over time, Guldimann says the goal is to leverage the cost-per-second model beyond Sled Mobile’s formats to become an exchange for any cost-per-second ad formats, and it is building a platform to do exactly that. The platform, dubbed Parsec, is an allusion to the per-second model (as well as an astronomical unit of measure), and Guldimann envisions it emerging as a new programmatic ad model in which advertisers trade with publishers based only on the time consumers are exposed to and engaged with their ad messages. The model, he says, is an elegant solution to industry debates concerning “viewability,” fraud and non-human traffic, because brands only pay for exposure to user-controlled ads.
“We know this will work because we’ve been running these formats through publishers on a CPM basis for six months now. Now we’re just changing the metric for which it is sold,” he says, adding that Sled Mobile believes in the model so much that it is willing to play the role of an arbitrager to further de-risk the new marketplace for both advertisers and publishers.
While publishers can utilize the model directly as part of a straight rev-share model, Guldimann says Sled Mobile will also seek to make a market by buying publisher inventory it knows will reach attentive consumers and resell it to brands based on the cost-per-second model, making its own money on the spread between the two sides.
“What we’re really after here is to drive adoption of the metric over the long run, and we realized we had to assume some of the risk in the short run to do that,” he explains.
He asserts it is not much of a risk, because of the data, insights and market intelligence Sled Mobile has derived from testing high-impact, user-controlled units in the marketplace. Over time, he says, creative executions will only get better as brands, publishers and even other third-party developers come up with better, even more engaging units.
Ultimately, Guldimann says Parsec will introduce a programmatic model leveraging a “quality score” so that the process can be automated and brands, agencies, trading desks and others can use the platform to buy audience time with reasonably predictive confidence.