Many media buyers are already aware of the practice of purchasing and selling advertising on a cost-per-thousand-impressions (CPM) basis. Many marketers, however, are still unaware of vCPM advertisements and the numerous advantages they provide. As a publisher, you should be familiar with the vCPM (cost per 1,000 viewable impressions) metric.

Publishers could earn revenue simply by adding adverts on their websites just five years ago. It made no difference whether or not visitors viewed the advertisements. Visitors never saw up to 56% of the adverts that were shown. With the development of digital advertising, however, advertisers are bidding on visible impressions at a higher cost. Advertisers will only pay in vCPM rather than CPM once viewable advertising is in use.

What is vCPM?

Understanding vPCM

vCPM is a marketing measure that stands for Viewable Cost per Mille. It counts the number of times a user sees an ad rather than the number of times the seller places it. The normal CPM measures the cost per thousand impressions, but the vCPM measures the cost per thousand viewable impressions.

An ad impression is defined as visible by the Internet Advertising Bureau (IAB) when a seller can certify that a user saw more than 50% of the display ad for more than 1 second. Video advertising sold on a vCPM basis functions similarly, requiring consumers to see more than 50% of the video ad for more than 2 seconds before the impression is counted as viewable.

For instance, if an ad is loaded near the bottom of a webpage but a person does not scroll down far enough to see it on their device, the ad impression is not considered visible. Advertisers will have to pay for these ineffective impressions under CPM pricing. But on the other hand, advertisers are not paid for these non-viewable impressions when using vCPM.

How to calculate vCPM?

CPM is a measure used by advertisers. In other words, advertisers use CPM to determine how much money they will spend on an ad campaign. As a result, vCPM is now an advertiser-side statistic.

Advertisers use CPM to pay for all of the adverts that appear on a web page. Advertisers, although, only pay for those that were active and visible on a user’s screen while using vCPM.

The following are the formulas for calculating vCPM:

vCPM = 1000 x Cost / Viewable impressions

vCPM = CPM x Total Impressions / Viewable impressions

vCPM = CPM / Viewable impressions %

What is the difference between CPM and vCPM?

CPM stands for ‘cost per thousand impressions,’ as you may know. Advertisers should pay for a thousand served impressions when employing CPM. Advertisers would pay for what they bought at the auction, whether it is displayed or not.

On the other hand, vCPM is the cost per thousand viewable impressions. This implies that advertisers are charged based on 1,000 visible impressions of the ad placed rather than the ad served. The ad’s viewability is a crucial factor in deciding the campaign’s cost. Buyers that want to raise brand recognition are more likely to employ vCPM.

Viewability isn’t taken into account at all in CPM. Publishers with 20% ad viewability will be compensated at the same rate as those with 80% ad viewability. In other words, if one of your pages has 20% ad viewability, the RPM will be the same as if the page had 80% ad viewability. However, there are certain exceptions. Advertisers will only bid on 80% ad viewability pages/publishers when using third-party viewability partners to evaluate placement-level ad viewability, even if the CPMs are greater than the normal range. Furthermore, most DSPs can bid on more visible placements to increase campaign ROI.

Although, when it comes to vCPM, it will grow when ad viewability is low. For example, if ad viewability is 20%, an advertiser must purchase 5 times to achieve one complete viewable impression. When the viewability is greater than 50%, simply purchasing an impression is sufficient.

How to improve vCPM?

As we are well aware of the fact now that vCPM is dependent on ad viewability data, here are some pointers and recommendations for publishers looking to enhance ad viewability and thus vCPM:

  • Experiment with different ad styles and locations to increase your chances of getting better results.
  • Don’t take it for granted that advertising above the fold is always visible. Compare the results of different ad locations (above the fold vs. below the fold) to see which ones perform better.
  • To maximize viewability, do not place too many adverts, since this will result in a poor user experience.
  • Experiment with different ad kinds and styles to find which ones perform best. Vertical advertisements outperform horizontal ads, according to Google.
  • Improve viewability and engagement by including the most popular ad types and layouts on your web pages. For example, the position directly above the fold is regarded as the most visible.

Final Thoughts

To witness a rise in vCPM, publishers should always focus on ad viewability strategies. Use heatmap tools to identify the most user-interacted areas of the website. Try not to reduce the amount of space available for content in order to make your adverts more visible. Publishers’ earnings may suffer as a result of vCPM. In the long run, however, effective use of ad viewability indicators may lead to a stronger ad placement system that benefits the whole ad ecosystem.

Working on the viewability of your web pages will not reduce your earnings. On the bright side, a good marketing campaign may actually help marketers by raising market demand for your inventory.

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Samien Kidwai

Hailing from an academic background, I have been an Assistant Professor in Mass Communication with an additional decade of experience in creative writing. I’m passionate about music and theatre with an inclination towards movies. Being an avid reader, I love to scribble my thoughts and ideas when I’m not running behind my 8 year old daughter.