How 'viewability' can save display advertising

Display ad bashing is in vogue, but writers who whip up lists of “fascinating”, “mind blowing” or “horrifying” banner ad statistics are looking at the wrong metrics. They’re stuck in a world of click-through rates (CTR), but ad technology is quickly moving towards a world of “viewability.”

Yes, supposedly you’re more likely to get into MIT, birth twins, or survive a plane crash than click a banner ad. And while a lot of these statistics are deceptive bunk, as one Digiday contributor pointed out, banner ads often do have low click-through rates – somewhere between 0.1% and 0.04% by most estimates.

The problem is CTR, the metric itself, not banner or display ads. Most brands don’t care or shouldn’t care who clicks because the experience of viewing is usually more important than the act of clicking. This is why paying by cost per thousand impressions (CPM) is more popular than cost per click (CPC).

The impression model is a source of real problems, though. Brands often overpay for ad impressions (and clicks) because unscrupulous competitors dilute the results using bots that impersonate human web traffic. In fact, fraudulent bot traffic will cost the global display advertising industry $11.6 billion in 2014, according to Solve Media, and no one will get in trouble for it.

If we look at display advertising through CTR and CPM lenses, it does look broken. We can’t generate real conversions without real traffic. Only real people can buy products, register for newsletters, and engage with ads. The way to save display advertising is to evolve from CPC and CPM to measuring viewable impressions. Only viewable impressions can guarantee true engagement and repeatable success.

Who’s Really Looking?

Viewable impressions are the answer to misleading CTRs and dangerously high fraud rates. While CPM/CPC models are easily deceived, viewable impression models ensure that advertisers only pay when users are actually capable of engaging with the ad. Bots can’t create fraudulent viewable impressions because they can’t perform the actions that distinguish a genuine view from a false one.

A viewable impressions model can also save advertisers from paying for ads that load but aren’t seen. Last year, comScore found that 54% of ads never have the opportunity to be viewed. Many advertisers are misled into paying for bottom-of-the-page ads that users never scroll down far enough to see. Yet the publisher or ad networks still charge for these ads that never see the light of a display. Viewable impressions can singlehandedly clean up all this fraud and deception.

The Birth of Standards

“After 18 months of intense debate”, Making Measurement Make Sense (3MS), a coalition of advertising industry associations, agreed on standards for viewable impressions in March. For a display ad to count as a viewable impression, 50% of the pixels have to appear on the screen for a minimum of 1 second. For video, 50% of pixels have to appear for a minimum of 2 seconds. 3MS also gave a green light to transacting in viewable impression beginning on June 30.

While the 1 and 2 second rules do provide a useful baseline and will prevent bot fraud, advertisers know that most ads can’t engage a viewer that quickly. They want 5, 10, and even 20 second guarantees, particularly for video ads, so ad networks are now allowing them to select these timeframes. In addition, buy-side platforms can now measure average viewability rates across their web properties so that buyers can optimize on high viewability sites. Both of these innovations will help marketers quantify engagement with ads without relying on CTRs, which are becoming obsolete.

Publishers will also benefit because viewable impressions help monetize their inventory more effectively. If a publisher can guarantee that advertisers only pay for viewable impressions and clicks from human beings, their ad inventory becomes more valuable.

The Marketer’s Takeaway

Traditional CPC is dying, and CPM is merging with viewable impressions. Why risk click fraud or having more than half your ads going unseen when technology can guarantee each impression? While the 1 and 2 second viewability rules are adequate for verifying that a user is human, marketers will benefit most from buying longer viewable slots that can achieve real engagement.

Will this change advertising content? When ads are less about clicking through and more about engaging an audience, then yes, I think ad content will become less annoying and more interesting.

People will continue to make lists of statistics that bash and defend display advertising. From now on though, forget click-throughs – they don’t matter to most brands. Let’s start measuring viewable impressions, and let’s focus on making digital advertising safer and more effective for advertisers and publishers alike.

Ted Dhanik is CEO of engage:BDR.