vCPM in Digital Marketing - Voluum DSP Blog

vCPM in Digital Marketing – Voluum DSP Blog

Marketing

You’ve probably heard about Cost per Mille (CPM) and Viewable Cost per Mille (vCPM) pricing models, and you surely know a lot about them. However, if you wish to learn more about different types of pricing models, especially CPM, then we encourage you to read our other post that you can find here. Today in this post we will focus specifically on viewable ad impressions to help you understand how to deal with native campaigns when targeting the ad exchanges supporting vCPM. 

So let’s not waste time any more and let’s start!

vCPM is an acronym for Viewable Cost per Mille which we easily translate to cost per one thousand viewable impressions. It shows how often the Ad is viewed by a website visitor. It means that the advertiser pays only for viewed impressions.

The Viewable impressions measurement is a more accurate key performance indicator (KPI) for campaign performance as the advertiser will not have to pay for ads that are merely placed on the website (and not viewed), but potentially not even visible for users.

There are few ways to make vCPM calculation – choose the one that is most suitable for you!

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

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

Viewable CPM = CPM / Percentage of Viewable Impressions

When Can Users See My Ad? 

To make sure that users will actually see your ad, you should think about where it is positioned. For example, if it is placed on the top or on the bottom of the page, the user might skip it simply by scrolling the page up/down. That is why MCR (Media Rating Council) came up with standards for publishers, which help to observe whether the Ad was viewed or not. To consider that an ad was viewed:

When it comes to native advertising, it may vary depending on the network and how they define viewable impressions. The International Advertising Bureau (IAB) considers an ad viewed when at least 50% of it appears on the screen for at least 1 second.

vCPM vs CPM

CPM and vCPM are both advertiser-side metrics that we use to calculate the amount a client spends on an ad campaign. While running on the CPM model, you pay for all ads that are placed on the webpage, with no guarantee that they have been seen by the website visitors. Meanwhile, while bidding for vCPM, you pay only for the ads that have appeared on the user’s screen for a specific amount of time. You need to remember that users might not scroll through whole pages and this is why they can’t see all ads that are present there.

As we mentioned before, whether your ad was visible or not is connected with the positioning of your ad unit on the website, which is mainly in the center of the page in the case of vCPM. If your ad is displayed in a spot with poor viewability users may not see your ad at all. 

For example, right above the fold position is considered the most viewable area for an ad. However, a lot of users may scroll the page down too quickly to see the ad. If positioned below the fold, ad visibility will decrease even more, because users may not scroll the page enough to see it. 

Numbers don’t lie: as per a study from Google, the median viewability for Above the fold ads is 68% and approximately 40% for Below the fold. For this reason, you should aim at the ad spots above the fold.

Ad exchanges that support viewable ad impressions benefit advertisers by:

vCPM Bidding And Campaign’s Optimisation Tips For Advertisers

While working with the ad exchanges that support vCPM you bid on 1000 viewable impressions and you pay only for impressions that are measured as viewable. This requires a different approach to campaign optimization. Check what you should do to get the best results!

Understanding View Rate & Win Rate on Examples

We’ve outlined two scenarios to help you understand the relationship between vCPM and your campaign metrics available in the Voluum DSP reporting.

Scenario 1: Understanding metrics in relation to ad exchanges that support viewable CPM

View rate measures the ratio of the actual number of impressions won and shown to the website visitor to the total number of impressions bid on (total bids), and expresses it in a percentage.

View rate = (Impressions* / Total bids**) x 100%

*Impressions – the actual number of ad views by a website visitor

** Total bids – a number showing how many times your campaign takes part (bids) in the global auction

Win Rate measures the ratio of the number of auctions won (wins) to the number of impressions bid (total bids), and expresses it in a percentage.

Win Rate = (Wins* / Total Bids ) x 100%

* Wins – the number of global auctions won, which means that the ad was rendered in the ad widget, but at this stage, it does not necessarily mean that the ad was viewed by the website visitor.

This is how you can utilize this data in practice: 

Scenario 2: Understanding metrics in relation to ad exchanges that DO NOT support viewable CPM

View rate is the percentage that measures the number of Impressions (Wins) won, divided by the number of impressions bid (Total bids). View Rate shows the same values as Win Rate.

View rate = (Impressions* / Total bids)*100%

*Impressions – show how many times your ad has beaten the competition and won a global auction for the chance to have a consumer view your ad. It does not necessarily mean that the ad was viewed by the website visitor, so in this case, Impressions are the same as Wins.

vCPM in Voluum DSP 

In Voluum DSP, viewable ad impressions (vCPM) ONLY applies to the following ad exchanges: 

It is important to keep this in mind when selecting the traffic source that you plan to target. It will allow you to react appropriately to the data in a campaign’s reporting and to optimize the results in a cost-effective way.

Final Remarks

Hopefully this article left zero doubt as to why it is so important to distinguish between metrics in the case of targeting ad exchanges supporting CPM or vCPM. 

Remember that vCPM is one metric amongst many others that can help you in measuring your campaigns’ performance. It can definitely help to optimize your budget. So take a closer look! 

Voluum DSP released more metrics in reporting recently to facilitate campaign optimisation. Thanks to this, you now have access to data such as View Rate, Win Rate, Wins and Impressions. You should use these metrics on a daily basis as it gives you better bid and optimization control!  To find out more check out our documentation.

So don’t hesitate any longer. Join the DSP family and start optimizing your native campaigns like a pro. 

This content was originally published here.

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