Tremor expects higher margins in video as marketers increasingly demand engagement-based pricing models. Day acknowledged the company had offered a performance-based pricing for years, though it’s really catching on now.
“We think most people use products in the video space now that are just derivatives of the display space or optimize against a click, which makes no sense for video,” Day said. “While we can’t optimize to brand lift, we can optimize to brand impact, engagement and viewability.”
He called viewability “the most important issue currently facing our industry,” and offered the following breakdown of Tremor’s viewable allowances:
In a programmatic buy using Tremor’s DSP, a partner like Varick could choose viewability as a KPI, select either “Viewable Impression” or “Viewable Complete” and then the DSP would automatically optimize against that selection.
The ability to buy on viewable completion guarantees the ad had a better chance of achieving brand impact, Day noted.
For a guaranteed campaign (typically purchased more directly, through its sales force), Tremor enables two different models in which advertisers pay only when they’ve hit a predetermined viewability parameter – either “cost per viewable impression” or “cost per 100% viewable and 100% complete.”
Tremor’s performance-based products accounted for 32% of its revenue while its All-Screen ad product, a cross-screen campaign planning tool, represented 40% of total revenue.
Although the All-Screen tool is currently compatible with mobile devices and tablets, “there’s no reason why we can’t expand that to linear TV,” Day said on the earnings call in response to an analyst who asked if the company desired a greater share of the traditional TV ad market.