Video ad network BrightRoll has introduced a new payment model for video ads, one under which advertisers only pay if the viewer watches the entire clip to completion. Ad networks have long stalled on revealing completion data, because the number of ads that get fully watched are so few. Inevitably, though, BrightRoll’s clients, who include Wal-Mart, Visa, Sony and Warner Brothers, pushed for the new pricing system. BrightRoll has dubbed it Cost Per Completed Video, abbreviated to CPV to fit alongside existing three-letter advertising acronyms CPM, CPC and CPA.
“It surprised us” when advertisers pushed for the CPV model, CEO Tod Sacerdoti said in a phone interview. “But it makes sense for folks with longer content, or content that’s more instructional or informational, not just pure entertainent.” Asked which advertisers were now buying on the CPV model, Sacerdoti said his buyers had balked at identifying themselves. “But we have eight companies so far, stretched across twelve campaigns,” he said. “Half are in entertainment. The others are in travel, and brands in the health/beauty category. Plus anyone who’s been buying on a performance-based metric before. For them, CPV is a much more palatable stepping stone into video than CPM is,” because they’ve grown accustomed to not paying for ads that get ignored.
Sacerdoti added that, “A lot of advertisers have been testing pricing based on cost per engagement” or CPE, under which they only pay when the viewer interacts somehow with the ad — playing a game, taking a poll, rolling over an ad unit for a specified amount of time, or taking a product tour. “But most of the engagement ads are being served either for gaming, or in social networking context,” he said. “What they’re finding is that the viewer isn’t really engaged. They’re paying for a bored teenager.” These viewers spend a few seconds with the ad, then lose interest.
CPV pricing will shake up the video ad business more than a little, by requiring ad networks to begin sharing data with their clients on how many viewers actually watched a video to completion. That’s a fraction that all sides involved know will be disappointingly low. But as online advertising continues to shake out, it seems inevitable that advertisers would eventually demand the option to only pay for those clips that their consumers actually watch.
VB’s research team is studying mobile user acquisition: Chime in here, and we’ll share the results.