Commentary

Cost Per Viewable Person Is The Metric That Matters

At least that’s Michael Connolly’s view. Connolly is CEO and co-founder of Sonobi, an ad-tech firm. He thinks that planning and transacting media based on impressions and CPMs will eventually go away.

Connolly believes the market is heading toward something he describes as a “100% people-based market” that’s direct to publishers, with no intermediaries. In that scenario, technology that plans and delivers media to specific and highly targeted audiences is guaranteed. Sonobi offered its views recently in a series of three whitepapers.

What does a move from impressions to people mean?  Connolly said Sonobi is making people “plannable” so brands can have predictable conversations. For example, a publisher today might deal with 30 million impressions a day generated by 1.1 million people. That’s the currency the publisher has and the currency the buyer wants. The ability to plan and sell media on an “individual person basis” is what Connolly said the market will evolve to. That means thinking about ad inventory as people, not impressions.

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From an impression perspective, advertisers want to reach consumers in engaged environments. If a brand says it wants to look at its 250,000 customers across a specific publisher, it wants to know how many of its customers are on a particular page and then reserve that audience.

But, in Connolly’s view, audience-based targeting has no planning function. And real-time bidding (RTB) is essentially auctioning off unsold inventory. Connolly maintained that the RTB marketplace is limited by creative type: “It doesn’t work across video and mobile very well, and there’s no planning component. The question is, how do we provide technology that gives both the publisher and buyer the insights necessary to plan and negotiate against future audiences?” He said agencies like Merkle are bringing CRM-level data from brands to the table to negotiate on.

Connolly thinks cost-per-viewable-person will be a metric that’s eventually adopted and that publishers need to transition to people as inventory, and away from impressions as inventory.

What are the benefits of this so-called “people-based market” vs. the impressions-based CPM model? Connolly said the cost-per-viewable person (cpVp) offers benefits for publishers because instead of a site’s inventory being just a collection of impressions, it becomes a collection of unique consumers. This creates a sense of scarcity, which can be a publisher’s most valuable asset.  In Connolly’s “people-based” scenario, every viewer is relevant and has value; there are no remnant consumers.

The sense of scarcity is further enhanced when anaudience is combined with the right content and a consumer-friendly media experience. Then you might have guaranteed, viewable audiences across mobile, video, and native channels.

This scenario also enables advertisers guaranteed access to their unique audiences, and enables communication with consumers based on their particular relationship with a brand. Sonobi believes that media plans represent, at best, a proxy for an audience, but “people-based” planning and buying creates more certainty around consumer reach with minimal waste.

Connolly argued that buyers need to evolve their strategy. If they want data, it should be at the center of their media plans. Data can be forecast  and predicted on a guaranteed basis. “We have to make sure the new marketplace is direct and there are no intermediaries,” Connolly said.

All intermediaries do is increase fees and place restrictions. By intermediaries, he means ad exchanges, supply-side platforms, demand-side platforms, and other entities that publishers use to get access to demand sources.

Connolly maintained that publishers only need one technology intermediary, not dozens.

7 comments about "Cost Per Viewable Person Is The Metric That Matters".
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  1. Ed Papazian from Media Dynamics, July 26, 2016 at 11:16 a.m.

    Sounds like he has discovered the long established reach and frequency concept. Of course, to make that work, from a media planning perspective, you want to attain a certain level of reach and "expose" that audience a certain number of times. Too much frequency can lead to campaign wearout, too little can mean your message isn't really getting through or isn't fully understood. So, naturally when you combine reach and frequency, you get "impressions" or, as a percentage of the target group, GRPs. If you ignore GRPs---or "impressions"--- how do you estimate how often you wish to espose your message to a consumer?Just curious.

  2. Neil Mahoney from Mahoney/Marketing, July 26, 2016 at 11:25 a.m.

    Wrong. Cost per viewable prospect is what matter.

  3. Neil Mahoney from Mahoney/Marketing, July 26, 2016 at 11:29 a.m.

    PS to Ed;  Back in the days of B2B print media it was recommended that you cluster your ads.  Runf a heavy sked, then take a break.  Run another heavy sked, thake another break, and so on.

  4. Ed Papazian from Media Dynamics, July 26, 2016 at 11:38 a.m.

    But Neil, an "impression", if calculated correctly, is just another way to say you've "reached" a "viewable prospect". What matters is how you orchestrate your reach and frequency, whether you give your campaign a "rest", from time to time or keep pounding away day after day against the same audience, whether you control your exposure frequency, perhaps  varying it by time of day or editorial context, etc. etc.

  5. Peter Rosenwald from Consult Partners, July 26, 2016 at 3:03 p.m.

    All good stuff on an extremely important issue.

    But what is missing is 'cost' - the cost of getting the right message to the right persopn at the right time and again and again if necessary.

    The key question is just hopw much you can afford to make that impression and make that sale. It's what we call, 'The Allowable Cost Per Oder'. It is arguably the most important equation in marketing.

    Want to know more? Send an e-mail to pjrosenwald@gmail.com satying simply: "ACPO Please".

     

  6. Neil Mahoney from Mahoney/Marketing, July 26, 2016 at 3:27 p.m.

    Peter, you seem to be making the assumption that there's no sales force to help close the sale.

  7. Peter Rosenwald from Consult Partners replied, July 26, 2016 at 5:27 p.m.

    No such assumption made or intended,Neil.

    There is a calculable amount the marketer can afford which is the sum of all the steps in the funnel and must include the cost of all the people who drop away along the way and don't purchase anything. Obviously, the cost of the sales force (if there is one) is a significant factor.

    In my experience too few marketers know what they can afford and therefore don't optimize their spend. Perhaps I'm prejudiced but I've found over the years that the ACPO can help.

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