Price per thousand viewable impressions (VCPM) helps advertisers understand exactly how much it costs for an ad to be seen on a site. We investigated and found a lot of variation in this metric. Smart marketers will pay close attention to VCPM and really smart marketers will use this data to their advantage. Show More
Price per thousand viewable impressions (VCPM) helps advertisers understand exactly how much it costs for an ad to be seen on a site. We investigated and found a lot of variation in this metric. Smart marketers will pay close attention to VCPM and really smart marketers will use this data to their advantage.
VCPM is simple metric: it calculates CPM based only on the portion of impressions that were viewable. For instance, in Q4 for TubeMogul’s top three tiers of inventory, pre-roll viewability was 32%, and CPMs were $10.13, so VCPMs were $31.65 ($10.13 divided by 32%) on average.
TubeMogul took a closer look at Tier 11
sites and their viewability rates and CPMs during the month of December, 2014. As you can see from the graph below, sites with viewability below 35% have prices clustered between $5 and $15. Above 35% CPMs start to diverge dramatically. For a viewability rate of 70%+ you might pay $10 or nearly $40. Of course, there are other things that affect inventory cost, such as the audience being reached or the valuable context in which the ad is presented. Still, CPMs explained less than 15% of the variance in viewability rates. Put simply: you can’t just pay more and expect better viewability.
It’s worth remembering that there are just as many sites with cheaper VCPMs as there are with above-average costs. What struck us in our analysis was that the real outliers (the very high and very low VCPMs) were still high-quality brand-name sites and didn’t appear to have any obvious common characteristics. What’s likely happening is that other factors such as demographics, context, brand preferences or specific events are driving those prices.
For marketers, the upside of this variance is that it creates opportunities to get better viewability for cheaper. Given that these sites are high-quality Tier 1 inventory, buying only the low VCPM sites can be a big win. A quick look at the graph above, though, and you can see it would be a daunting task for a person to sort through, especially as VCPMs can change rapidly over time. It seems like a job for a computer.
With that in mind, we decided to do more than just eyeball a graph. In fact, we matched our best people against our new goal optimizer algorithm and it beat our team by 30%. Again: one push of a button got 30% better VCPMs than a highly skilled account manager optimizing the campaign every day
Viewable ads reaching the right target in a brand-safe context is what all brand advertisers are looking for. All else being equal, even a small shift in VCPM can make a big difference to the efficacy of a campaign. Imagine what a potential 30% difference could do. That’s like moving from that $31.65 Q4 average VCPM to $24.35.
It should surprise no one that in the vast world of Internet video, there is too much complexity for a human to handle. The good news is that a good algorithm can give you a big advantage over those who still do it by hand.
Tier 1 sites are brand name sites with up to date content and are globally or nationally recognizable.Show Less