Commentary
Is Viewability The Bogeyman Of Digital Advertising?
- by Paolo Gaudiano , Op-Ed Contributor, July 28, 2015
While I agree that viewability is important, I feel that this is a misplaced concern for a number of reasons.
First of all, as long as advertisers are eager to buy inexpensive inventory, viewability will continue to be an issue. If you buy cheap remnant inventory for your 300x250 banner ads, you simply can’t expect that a lot of those slots will be viewable.
Second, demanding higher viewability will simply drive up overall prices. Even if you could get publishers to agree that they will guarantee a certain viewability rate, the only way they will be able to survive is to charge enough for those viewable ads, so that they can afford not to charge you for ads that are not viewable. At the same time, DSPs and other ad-tech providers will need to absorb the cost of developing the technologies and business processes that are needed to measure, track and adjust for viewability. How do you suppose they will make up the cost of adding these capabilities?
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Third, I feel that much of the brouhaha about viewability is just a decoy to keep us from thinking about a much bigger problem, which is that digital advertising generally sucks. Depending on how you look at it, industry-wide click-through rates (CTRs) for display ads hover around 0.1%. Let’s pause for a second to understand what this means: for every 1,000 ad impressions delivered, only one of them leads to a click.
Let’s now assume that, roughly, viewability rates are around 50%. That means if we could guarantee 100% viewability, the average CTRs should double – up to a whopping 0.2%. That would still mean that, even accounting for viewability, only two of every 1,000 impressions led to a click.
What happened to the remaining 998?
When you look at it in isolation, it sounds terrible: Half of all the ads you pay for are never even seen. However, to me this concern pales in comparison to the observation that 99.8% of viewable ads are never clicked. To me, blaming viewability is a bit like being a concert organizer, finding out that 99.8% of the people who come to your shows hate them, and blaming it on the fact that the venues for your concerts have fewer seats than they had advertised.
Ultimately, advertisers, publishers, and the entire advertising ecosystem need to address the real problem: We are flooding the Internet with largely useless, irrelevant and often annoying advertising, treating users as if they all they are doing is looking for the next place to spend their hard-earned money.
But because figuring out the real problems is hard, we all fall back on blaming things we can touch and measure, like viewability.
Viewability is being used a bit like the Bogeyman: a vaguely defined, terrifying creature that will come after children who are misbehaving. Think about the main players who have been fueling this fire: Google has been leading the pack with its reports on viewability, while several ad-tech companies have jumped on the bandwagon, touting their efforts to improve measurement or enforcement of viewability. For Google, there is no better way to promote its own services (and in particular video ads) than to point out just how bad their competition is. For the growing number of ad-tech companies, this is a great way to expand their arsenal, gain competitive advantage, and increase the price of their services.
So, while advertisers and publishers run around in the dark waiting to be rescued from the Bogeyman, these players are laughing all the way to the bank.
Paolo, while I agree with you about low CTRs being a potentially bigger issue than viewability, one of the reasons why CTRs are so low is that even if an ad can be seen, very few users bother to take note of it---hence the low response. Of course, lousy ads don't help, either.
Also, most branding advertisers, as opposed to the direct marketing types, dont really care a fig about CTRs. It's nice if people visit your website, but that's not the main goal of a branding canpaign. Instead, it's gaining awareness and motivating people to buy or use the product. So, if digital ad sellers really want to capture more branding dollars, the visibility issue is of paramount importance. It doesn't matter what size or form a branding ad takes, if you are seller and expect to be paid for delivering real "imperessions", you must deliver the goods, namely a full and fair opportunity to see the ad. After that, it's the ad's job to capture and sell the user.
@Ed, there are two points I'd like to clarify. First, you make a farily broad generalization about branding - but in fact a lot of display advertising is not sold for branding but for direct response.
Second, here is a different way of framing what I was trying to say: increasing viewability will be costly, and that could quickly outstrip the benefit. Ultimately, whether you are doing branding or DR campaigns, it will make no difference whether you pay $5 CPM for 50% viewability or $6 CPM for 60% viewability. But it's likely that getting to higher viewability will cost more than the efficiency gain. So you may end up having to pay $10 CPM for 80% viewability or $20 CPM for 100% viewability. This, economically, makes no sense to the advertiser. Who cares if half of your impressions are not seen if you are paying less than half of what you would have to pay to make sure they are all seen?
Making noise about viewability without considering these tradeoffs is what I consider the bogeyman-like response to this issue.
Paolo, I doubt that my observation about most branding campaigns is too broad a generalization. But that's not the real issue here. If digital sellers think that they can charge branding advertisers more if they want to have their video ads really visible, then the sellers had better keep an eye on what TV is charging the same advertisers for 100% visibility. TV's CPM---all network types and dayparts---is around $10-11 for 15-second and 30-second commercials on average and the corresponding figure for video ads is jacked up to $75, or who knows what, to attain the required degree of visibility---or close to it---- there will be consequences, meaning that the impressive growth we now see in digital video ad revenues will slow dramatically.
It may be that digital sellers can move branding advertisers to accept some metric other than visibility, which, to be fair, is only a threshold indicator of potential impact. But it is firmly ingrained in many adertisers' minds as an essential part of the process, so I'm not that optimistic about this goal being attained.
Those who are responsible to buy the ads are not the same as those responsible for the sales of those things. Those who are responsible for profits are not the same people as either of those people. Major disconnects all around.
Great article Paolo. Telling Comment Ed. On the money Paul. The issue as I see it: will media executives address viewability, fraud, and click-through-rates and the harsh reality that Google and Facebook mean to own local advertising (52% share already). Media executive need to quickly address the reality that advertisers have begun to figure out that digital advertising does make the cash register ringing. There is a bright side but it requires a digital detox.
Viewability without it you have less than nothing. With it and accurate, Transparent,comprehensive real time raw aggregated measurement you have significantly improved ROI. Paolo you need to catch up with us,at least one BDssP I know of has already incurred the expense "to measure, track and adjust for viewability" and much more, wink, wink, nod, nod. They are also the most cost efficient in the industry. Cutting edge Technology and Dedication to serving your customers best interest makes programmatic work. Increasing Ad rates to obtain ad performance is the path of those less capable or maybe just greedy.
1) We have the technology to measure viewability very well. It's basically built into all the modern browsers at this point and works just as well in mobile apps. Plenty of companies like ours transact on 100% viewable impressions and there's no increase in operational costs. In fact is saves money by lowering the total amount of impressions to actually handle and report on.
2) The IAB and MRC has done a poor job of coming up with a standard and auditing process. This is something that should be handled by a solid team of engineers first to come up with a test suite and certification process, followed by audits done by actually tech savvy companies. A month with the right team can get this done. Unforunately the IAB/MRC have managed to get the industry into a situation where accredited vendors have 50% or more discrepancy. Wonderful.
3) Once these certification processes are fixed, every platform can then go after this validation themselves, and that certification can then be actually trusted by buyers. Until then every agency will have their favorite vendor, which does nothing but add cost with this entire sub-industry of verification vendors. Also every extra tracking tag just slows down sites and is fueling this rapid rise of ad block usage.
4) So what if rates increase? Viewability will help cut down on fraud and increase the quality of each impression while also adding scarcity and bringing back realistic rates. This will help everyone in the ecosystem deliver better products and services instead of this current race to the bottom. There will always be cheap inventory for cheap buyers, if that's what they want. But you get what you pay for.
5) Clicks are an outdated model and other than very strict DR situations, they're pratically useless. Modern platforms either transact on attention, conversions or other post-click action that proves some kind of ROI. A click is meaningless and buyers/platforms still working on that model need to catch up to where the market is today.