With US adults spending an average of 3 hours and 35 minutes per day on their mobile devices, mobile is expected to surpass TV as US users’ favorite medium in 2019. This has many brands looking to shift their video ad budgets from TV to mobile, and for good reason.
Unfortunately, many mobile video ads suffer from viewability issues that prevent them from being seen. The latest Integral Ad Science Media Quality Report claims that overall mobile web video ad viewability rates were just 65.2%, meaning that less than two-thirds of such ads get viewed for any meaningful amount of time.
The IAB and Media Ratings Council define a mobile video ad as viewable if at least half of the ad is displayed on the screen for a minimum of one second. But even that standard is under debate. Should advertisers have to pay for an ad that only ran for such a brief period of time? Advertisers certainly don’t think so, and most are looking for new ways to pay for video ad campaigns so that they get their money’s worth.
That’s where Cost-Per-Completed-View (CPCV) advertising comes in. The CPCV pricing model gives advertisers the best chance to have maximum impact on their audiences and generate the best ROI for their campaign.
Let’s take a closer look at the model and what it means for mobile advertisers.
CPCV advertising enables the advertiser to only pay for a video ad once the user has finished watching the entire video. Some publishers consider a view “completed” when the user has finished watching a certain length of time instead of the entire video; for instance, when Facebook rolled out CPCV advertising in 2015, they defined a “completed view” as 10 seconds. That’s better than the one second dictated by the IAB and MRC, but still not a complete ad.
Tapjoy considers a completed view to be just that — a video that is watched all the way to completion. Whether the video is 10 seconds, 15 seconds, 30 seconds or longer, advertisers don’t pay a cent unless their video is watched in its entirety.
There are a number of pricing models that publishers employ when charging for mobile video ads. Surprisingly, some still charge on a Cost-Per-Mille (CPM) basis, meaning that advertisers pay a certain amount for every thousand impressions. However, impressions are essentially meaningless for video ads because it guarantees only that the ad itself was served, not that it was viewable in any way or that any part of it actually ran.
More common is the Cost-Per-View (CPV) model, charging advertisers for every measurable “view” of their ad. However, as mentioned above, the definition of a “view” is debatable, and the minimum standards of half the video’s pixels being displayed on the screen for 1 second are hardly enough for the advertiser to truly engage their audiences.
Cost-Per-Action (CPA) or Cost-Per-Install (CPI) advertising is a performance-based payment method in which advertisers only pay if a user watches the video and then completes some type of desired action afterwards, such as installing an app, visiting a landing page, or buying a product. This model benefits performance marketers but isn’t very well suited to brand marketers whose primary goal is to drive awareness. It is not very favored by publishers either since the conversion rates tend to be low.
Time-based pricing such as Cost-Per-Second (CPS) are a variation of the CPCV model in which advertisers pay a certain amount for every second that gets viewed. This is a good compromise between CPC and CPCV because it finds the middle ground between having to pay for one second or not at all. It’s good for publishers and advertisers alike, but still not as good for advertisers as CPCV because it guarantees that consumers only watch part of the video, not the whole thing.
If CPCV advertising is advertisers’ preferred pricing model for video ads, why don’t all publishers and ad networks offer it? The answer is simple: many of them can’t. Average video completion rates on mobile are just 64%, meaning that publishers would miss out on 36% of their potential revenue. Some publishers try making videos mandatory and unskippable, but this creates an annoying user experience.
The reason why Tapjoy is able to offer CPCV advertising is that our rewarded advertising model provides a balanced exchange of value between the advertiser, publisher and consumer. Consumers receive rewards (in the form of premium in-app content) in exchange for their time and attention, while publishers get paid for creating that wonderful content and advertisers only have to pay for quantifiable, opt-in, completed views. It’s a win-win-win situation.
As Tapjoy’s Steve Wadsworth wrote about last year in AdExchanger, the industry is moving towards a CPCV model because it addresses many of the transparency, accountability and performance issues that affect the market. The change has not come easily, but the rewards for advertisers and publishers are worth it.
If you’re an advertiser looking to run mobile video campaigns, insist that your publishing and ad network partners offer you CPCV pricing. Not only is it the best way to drive ROI for your campaign, but your branding and awareness metrics will soar as well.
Want to learn more about the world of in-app advertising pricing models? Check out “In-App Advertising Cost – The Complete Marketer’s Guide”.