Today's column is written by Tom Shields, Co-Founder and Chief Strategy Officer of Yieldex, an analytics tools provider for sell-side, yield optimization.
I am biased, I’ll admit it. I wrote the first technical impression counting standards for the IAB in 1998. And I think that trying to move the industry to "viewable impressions" is a bad idea, for three reasons: it won’t make any difference to marketing ROI, it doesn’t help bring dollars online, and it will be expensive and confusing to adopt.
Let’s start with the argument that using “viewable impressions” improves marketing ROI. Measurement vendors trumpet “CTRs are higher!” for the marketer, while “CPMs will rise!” for the publisher. Let’s do a little math. C3 Metrics claims that CTRs are understated by 179% because so many ads aren’t in view. Wow – CTRs will double! Except, publishers will charge double the CPM for “viewable impressions”, so the CPC (and ROI) is actually the same. On the publisher side, Magid Abraham presented to the IAB (PDF) an example of 35m premium impressions selling at $5 CPM netting $175k to the publisher. However, only 75% of those are “viewable” according to ComScore, so the eCPM is “actually” $6.67. Wow – CPMs will rise! Except that the publisher can only charge that higher CPM (CPV, actually) for “viewable impressions”, so their revenue stays the same. And somebody has to pay the measurement vendor. This is progress?
These “increases” may improve the perception of online advertising, but marketers and publishers are smart enough to know they don’t make any real difference. Yes, the current impression standard is flawed in many ways, but we have over a decade of experience in setting rate cards, negotiating deals, and measuring results with it. A new standard will have new as-yet-unknown flaws. More importantly, it means creating new rate cards for CPV, and then redefining CTR (should it be VCTR?) with viewable impression as the denominator, so people don’t compare apples and oranges when looking at historical data. The cynic in me says that this apples/oranges comparison is the main reason this idea is getting traction, but I can’t imagine anyone I know falling for that. Other cynical reasons for the excitement may be that many agencies see this new metric as just the ticket to demonstrate to their clients that they “get” digital, and a few technology vendors see this as their path to revenue. But in my view, this metric just adds another tax without creating any real value.
The real challenges we need to solve are laid out in the other 4 principles of Making Measurement Make Sense: rationalizing measurement across media, understanding online’s contribution to brand building, and generally making it easier to spend big budgets online and get ROI that makes sense. Let's focus our efforts on these challenges, so we can grow the market to $200 billion for everyone.