Fast Chat: Dr. Magid Abraham

comScore CEO talks viewability and the company's patent war

Like much of the ad industry, comScore cofounder and CEO Dr. Magid Abraham has been talking a lot about online ad viewability of late. Now he’s put that talk into text with the newly published whitepaper, “The Economics of Online Advertising.” He talked to Adweek about that work as well as the company’s recent patent war.

Adweek: One of the big focuses of your report is digital scarcity, or the lack therof. It seems the biggest challenge with reducing the number of ads online is getting publisher to overcome any fears over revenue impact. How do you see that playing out?

Abraham: I think that the first hopeful sign is that there is a consensus among key industry players that this ought to be a priority. There isn't really anybody that you talk to that doesn’t understand and accept that it doesn’t really make sense to measure advertising that’s not viewable. Conceptually everybody buys into it. When it comes to implementation, it’s going to be a process rather than a single step. The first part of the process is agreeing on the standards and documenting that there are technologies that meet the standards. That has been happening the past few months. [The Making Measurement Make Sense initiative] has a standard, and the [Media Ratings Council] is looking at different technologies for accreditation. We have gotten our solution through the accreditation process. I think that those steps are an important prerequisite because people are ultimately going to say, 'if I am going to be judged on the basis of a viewed impression, I want to make sure that I am being judged on something fair and objective.' There is an arbitrage game that’s being played where there is more demand that is created for the high viewability placement, less demand that is created for the low visibility placement, and ultimately, given enough time that will start effecting prices.

How fast is this going to happen?

Publishers have a vested interest in making sure that the yield that their inventory has in terms of viewable and valuable impressions is maximized. We see a lot of publishers now start to experiment with understanding what their inventory looks like. I think this evolutionary process will probably take another 6-12 months, but I think that there is little doubt in my mind that viewability creates an arbitrage opportunity where in today’s system you are buying two different impressions that potentially have two different viewability percentages. If you have access to information that will tell you what the differential is, that creates an arbitrage opportunity where you can buy the high viewability [inventory] more often than the low viewability, which means that you’re going to discount the low viewability inventory and eventually the price will be raised on the high viewability inventory.

So, is it not necessarily requisite that publishers will have to take an initial revenue hit?

I’m not sure that they have to. A lot of publishers are selling a significant portion of their inventory as remnant inventory, and that remnant inventory is really not generating a lot of revenue for them. If it turns out that they have to sell less remnant inventory and a higher portion of their inventory as a premium because now they’ve improved or guaranteed their viewability, it’s not clear to me that the revenue that you lose on inventory that you’re getting pennies for is going to outweigh the benefit of smartly packaging higher quality inventory and being able to sell that more directly to the advertisers.

The existing methods available to publishers to track impression viewability range from after-the-fact reporting to technology that prevents non-viewable impressions from being served. Adweek has reported that comScore is working on a tool that does the latter. What’s your take on the best approach?

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