Programmatic digital advertising was supposed to deliver a new level of accountability: Narrower targeting to drive more tailored messages, and performance metrics that inform what’s working and what’s not. But the promise of programmatic is rendered moot if ads are not viewed by human beings.
The economic framework of digital advertising on the open internet is still defined by impressions rather than views. Beyond Facebook and Google, there are thousands of quality domains and apps out there that offer superior, brand-safe content. For marketers to reach those audiences with full confidence, it is critical for programmatic technology to shift from impressions to views, with buyers paying if, and only if, their ads are viewed.
Indeed, for more than 20 years, digital advertising has been bought and sold based on CPMs. By definition, then, this universal digital currency values the number of impressions served rather than audience time and engagement, and the digital media economy has developed accordingly. Publishers are rewarded for quantity and scale—not the quality—of ad units.
Low CPMs and poor user experience
In 2011, according to an article on Adobe’s Digital Marketing Blog, CPMs declined a jaw-dropping 31 percent year over year, despite a corresponding 271 percent increase in the number of impressions served. “The key driver for CPM declines appears to be a wider play for less expensive inventory,” the author noted.
As CPMs for display ads decreased over time, publishers had to achieve scale to deliver enough impressions to preserve monetization across their digital channels, and media buyers and traders had to buy more impressions to spend their clients’ budgets. It’s easy to see how clickbait, ad farms, pops and other low-quality tactics thrived on the internet. These business models were rewarded, even as the user experience was degraded.
It’s also easy to see why consumers adopt ad blockers to avoid the barrage of unwanted ads. Or why they turn to their Facebook News Feeds to consume their preferred media in an environment designed to balance curated information with relevant marketer messages. In addition to this engaged audience, Facebook offers another critical advantage to marketers: It only charges for ads that scroll into view.
Until now, marketers have faced a stark choice: Spend their advertising budgets on Facebook, with the guarantee their ads would be viewed, or use programmatic on the open internet where perhaps half of those units are viewable.
The need for viewability on the open internet
Brands and agencies are rightfully demanding viewability standards on the open internet. But most technology has not yet caught up. As eMarketer reported last year, many media agencies don’t even have line items in their systems to support anything other than CPM-based media buys. This leads to a manual reconciliation process, which adds one more task to a media trader’s already long list of tedious to-dos.
Technology companies that support a free and open internet have an opportunity to meet and exceed these marketer demands. For the past three years, AppNexus has been investing in machine learning-driven technology to help traders buy on a 100-percent-viewable basis, even when publishers are still defaulting to sell on CPMs. On each impression, AppNexus automatically predicts the likelihood of a view and pays the publisher per impression based on that prediction. The buyer only pays for impressions that are viewable.
Meeting the viewability standard is just the first step in achieving better economic incentives and measurement for digital ad effectiveness. The future will bring additional outcomes-based buying solutions that allow marketers and agencies to buy on the basis of tangible and verifiable results like video completion.
Automated outcomes-based buying will enable media traders to spend their time gaining a competitive advantage for their clients. Indeed, there is no one-size-fits-all strategy or metric for user engagement. Attention and engagement differ across channels (desktop, mobile) and formats (display, video, audio, native). Traders’ roles, in turn, will shift to delivering strategic outcomes as opposed to blanket impressions.
It’s important for an ad to be seen, but viewability is not a measure of effectiveness. Viewability should be table stakes in a broader push to shift the economics of the internet to incentivize a more engaging internet for everyone—advertisers, publishers, and end consumers alike.
On November 8, at our New York Summit, we plan to discuss how the next generation of buy-side technology shifts the paradigm from impressions to views. Stay tuned.