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vCPM: Why Publishers Need to Take This Metric Seriously

In 2015, Google announced that publishers will be paid for only viewable ads on their web pages. That means, no matter how many ad units you place on your web page, the earnings will depend on the ads that are actually seen by the visitors.

But how would anyone know whether an ad is seen by the user or not? Simple, by observing the user interaction with the web page. But, will this impact the publishers’ earnings? Of course. With viewable ads in action, advertisers will only pay in vCPM rather than CPM.

So, What is vCPM?

vCPM stands for cost per thousand viewable impressions. Simply put, advertisers will pay according to the impressions that are viewed, not the creatives that rendered on the publisher’s site.

If CPM is cost per 1000 impressions,

then vCPM would be cost per thousand viewable impressions

What are viewable ad impressions?

Viewable impressions are ad creatives that are actually seen by the users. But how would you determine which ads are seen? To simplify it, publishers have the MRC provided standards which define whether an ad would be considered as viewed or not:

  • For display ads, at least 50% of the ad (or ad pixels) should be visible on the user’s screen for more than 1 second.
  • For large ads, at least 30% of the ad (or ad pixels) should be visible on the user’s screen for more than 1 second.
  • And for in-stream video ads, at least 50% pixels should be visible on the user’s screen for more than 2 seconds.

Calculating the exact number of viewable ad impressions could be tricky. And even after you know that an ad is active on a user screen, there is no guarantee that the user has seen it. Hence to solve this, the standards defined by MRC offer some ideas about how viewability can be calculated.


Ad Viewability Metrics

Image source: MantisAdNetwork

CPM is an advertiser-side metric. Meaning, advertisers use CPM to calculate the amount they will spend on an ad campaign. This also makes vCPM an advertiser-side metric.

With CPM, advertisers pay for all the ads that rendered on a web page. However, with vCPM, advertisers only pay for the ones that were active and viewed on a user’s screen.

Here are the formulae to calculate vCPM:

#1 Viewable CPM = CPM x Total Impressions / Number of Viewable Impressions

#2 Viewable CPM = 1000 x Spend on Campaign / Number of Viewable Impressions

#3 Viewable CPM = CPM / Percentage of Viewable Impressions

Tips for Increasing vCPM

By now, it’s clear that vCPM depends on ad viewability metrics. So, here are some tips and suggestions for publishers to improve ad viewability, and hence increase vCPM:

  • Experiment with different ad layouts and positions to improve the chances of better performing ads.
  • Don’t assume that above the fold ads are always viewable. Consider comparing the data of different ad placements (above the fold vs below the fold) to understand which ones work better.
  • Do not put too many ads in order to get maximum viewability as it will lead to a bad user experience.
  • Experiment with the types/styles of ads to see which ones perform better. According to Google, vertical ads do better than horizontal ads.
  • Add the most popular ad formats and layouts on your webpages to attain better viewability and engagement. For instance, right above the fold position is considered as most viewable position.

There is no proven answer to which position or layout is the best. So, it makes sense to find out what’s the best for you to keep your users engaged.

Take Away

Publishers are always recommended to work on the ad viewability methods to see an increase in vCPM. Take help of heatmap tools to find out most user-interacted part on the webpage. Try not to take away the space dedicated for content in order to make your ads more viewable.

Because of vCPM, publishers might see a drop in their earnings. However, in the long run, efficient use of ad viewability metrics can lead to a better ad positioning system benefiting the entire ad ecosystem.

vCPM doesn’t apply to publishers dealing in real-time bidding or private auctions. In case of RTB, each impression on publisher’s web page is being bid on with ever-increasing competition. Next, in the case of a private auction, the price of inventory is pre-negotiated. Hence in both cases, viewability might not be the first thing advertisers consider while going for RTB and private auctions.

Working on viewability of your web pages isn’t going to harm your earnings. On a positive note, it can actually benefit advertisers with a successful ad campaign, increasing the demand for your inventory in the market.

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