Publishers and ad agencies both have an interest in ensuring that ads are as viewable as possible on as many devices as possible. Whether focused on clickthroughs, impressions, or both, increasing return on investment comes about as publishers and ad agencies working together to improve viewability. Today we are going to look at the ROI of ad monitoring and discuss the importance of monitoring methodology and sample size in reporting on viewability and ad functionality.
Standards of ad viewability
According to the Media Rating Council, a display ad is considered viewable if at least half of it can be seen for a second or longer. A video ad is considered viewable if it can be seen for 2 seconds.
However, viewability isn’t all there is to ad interaction online. An ad must also be clickable.
Viewable vs. Clickable
With most ad platforms, you pay for impressions or for clicks. Either way, viewability matters, but only to a point. Even if an ad is viewable for 5 seconds, if it doesn’t get a click, then true ROI cannot be calculated.
Viewability must therefore be more than these accepted standards if it is to have a measurable impact on revenue. Viewing something for one or two seconds does not equal a conversion just like seeing a billboard for a roofing contractor as you race down the freeway on your way home from work doesn’t mean you’re going to decide to find out about getting your roof replaced.
The Drive Toward 100% Viewability
There is a push toward 100% viewability via demands by advertisers that publishers reveal viewability rates or the advertisers won’t buy ads. This new demand means that websites must redesign pages with ads or lose advertisers if viewability is poor.
But, is 100% viewability even possible? There is nothing to be done about users who choose to skip or scroll past ads. For example, ROI can be impacted negatively when publishers are forced to raise rates to meet the 100% viewable standards demanded by advertisers who don’t budget for the raised bar of viewability. This can lead to a negative spiral of an overemphasis on viewability and less emphasis on user experience and engagement (clickthroughs).
Furthermore, an obsessive emphasis on viewability can cause short-sightedness and misinformed buying decisions based on skewed measurements and promises from vendors.
The good news, for companies that heavily advertise on Google’s ad networks, is that Google has promised 100% viewability for all ads that it charges advertisers for with its new product vCPM (viewable Cost-per-thousand) featuring ActiveView. What that means is that if your ad wasn’t actively viewable on the page the visitor was actually looking at, then you don’t get charged for that ad, even though it technically was rendered on the page (below the fold, in an unfocused browser tab, etc.). You only pay for the impressions of ads that are above the fold and fully in the user’s view.
Logically, if you’re paying for a display ad in a pay-per-click setup vs. a simple impression of the ad, your job of determining ad viewability is made all the more simple.
Calculating the ROI of ad monitoring
We know from eMarketer that the total spent in 2015 on display ads was $26 billion. The estimate for 2016 is that it will rise to $32 billion. Another prediction for 2016 is that display ads will surpass search ads for the first time ever with search ads carving out over $29 billion in ad spend and display ads taking up over $32 billion. Monitoring for ad viewability just got more important to the tune of nearly $3 billion.
MediaPost says that Google finds almost 56% of display ads have no chance of being viewed in the first place. Extrapolating from the figures above for 2015 display ad spend, that’s nearly $15 billion in ads wasted on poor viewability for any given publisher.
Further complicating things, a survey from Salmon and Rackspace just revealed that up to 36% of advertisers have no clear way to measure the business results of their online advertising. So, already these companies are at somewhat of a disadvantage in gaining a clear picture of how much was spent on digital ads that weren’t viewable.
For the 74% who do have the capability and technical prowess to monitor their ads for ROI, the impact of improving ad viewability cannot be understated. With 56% of display ads not being viewable, it is imperative that those viewability problems be solved through aggressive and regular monitoring.
The question of the day when it comes to measuring ROI is whether sample size matters. Common sense, and a Statistics 101 class, tell us that the more samples you have the better your data will be for determining the return on investment of an ad campaign. If you’re monitoring millions of pageviews, you’re going to know more than if you’re monitoring a few hundred.
However, this isn’t always the case. It is often better to focus on aggregate measures more than sample size. That way you get the broader picture of what is going on with a variety of audiences.
It is also important to focus on methodology more than sample size alone. Methodology is important in that you’re asking the right questions of the data and vetting unwarranted assumptions about what is actually going on.
In the end, the cause and effect around what constitutes a conversion will rule the day on viewability. True ROI measurement stems from conversions, not impressions. If they can’t see it, they can’t click it. If they can’t click it, there is no return on investment. Measuring impressions helps to predict how a campaign will improve ROI, but it is not enough.
Also, using A/B testing gives a clearer indication of the success of a campaign. Whatever you measure and however you measure it needs to be based on actual cause and actual effect for a given campaign.
In the end, improving ad viewability comes from improving ad monitoring, as proven by the Salmon and Rackspace statistic of 36% of unmeasured performance indicators. Companies and content producers that don’t have accurate ad monitoring will not know whether they’re getting a good return on their ad investment.
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