Since the advent of digital advertising the challenge for publishers has been how to be profitable when trading print ad dollars for digital dimes. Most publishers have approached the challenge with the mindset of quantity of quality. Web pages have been plastered with ads to capture more impressions with each pageview with the hope that the volume would solve the revenue problem.
With ads all over the page, many are not in view of the reader which has hampered the effectiveness and driven down the cost-per-thousand (CPM) rates. Agencies and advertisers are now clamouring for better standards to ensure greater viewability but a industry-wide solution remains allusive because of technical shortcomings and a lack of consensus. One company however, seems to be taking the viewability bull by the horns and may have the answer for the entire industry.
A recent study by Teads found that 50% of agencies and 46% of advertisers are holding back digital ad spending because of concerns about viewability. It is a valid concern when you consider a report published by Google that concluded that 56% of digital ads are not seen. Publishers are having difficulties improving viewability because that technology used to serve ads do not measure viewability. Furthermore, with users accessing websites from different devices and browsers, viewability becomes even more difficult to measure as the user experience is not uniform. Agencies and advertisers are pushing publishers to guarantee 100% viewability as an ad not seen cannot make an impression. But publishers counter that 100% standard is unreasonable since current ad serving platforms cannot accurately measure the viewability of the ads serving.
The Interactive Advertising Bureau cited the technical challenges as a reason to not expect 100% viewability and has suggested 70% as more realistic target. No matter the target viewability percentage the results will be smaller ad inventories for publishers, who will now demand higher CPM rates for the viewable inventory since it is a premium. Agencies and advertisers counter that any inventory that is not viewable is worth nothing and that viewable ads are not a premium product but simply the expectation. The divide in the industry will persist until the technology catches up and is implemented to allow for more uniform measurements of viewability.
However, the Financial Times has unveiled a new advertising format that ditches cost-per-thousand for cost-per-hour. Under this format, advertisers will only pay for “active exposure time” which is defined as being seen by the user for at least 5 seconds. The Financial Times is working with ChartBeat to measure how long users are looking at ads by tracking interactive actions such as mouse movement. It was tested with a few large advertisers since the Fall 2014 and rolled out site wide in May. The Financial Times has the technology in place so could this format be adopted by the entire industry to resolve the viewability debate? Publishers may not be so eager to adopt the cost-per-hour model since engagement in the digital world remains a barrier for success. The Financial Times has a loyal paid subscriber base that results in better engagement which in turn leads to more time viewing the ads on the site. Publishers that operate differently will have many questions about this format. Can publishers with free, less loyal audiences generate enough revenue with a time-based ad format? Will mobile users who tend to spend less time on the site prevent this format from working? Will this format disregard metrics such as clicks?
If cost-per-hour shows potential in becoming the new standard, the current questions remain the same; can it be integrated into the ad serving technology and can the industry agree on the parameters of time and rates?