In advertising's online space you've got to be seen to be believed
We need to talk about online advertising.
It's not great, is it?
In fact it's rubbish.
Display ads like banners, billboards, leaderboards and MPUs, are little more than online irritants. They loiter around the edge of web pages trying to grab your attention. "See me! Click me! Love me!" they implore. But most go unloved and ignored.
And they're beset with other problems too. There's ad fraud, viewability issues, and adblocking.
There's another underlying problem caused by how display ads are bought and sold. Typically, advertisers pay for clicks or for impressions. There's a growing consensus that this approach to has led to a race for scale amongst online publishers. But as everyone knows, when the number of ad impressions clock up, their economic value diminishes. It's a self-defeating strategy.
But there's a move afoot to sell ads in a slightly different manner - based on time on screen rather than impressions or clicks (often measured in CPM - Cost Per Mille, or 1,000 clicks).
The Financial Times has been leading the charge on this temporal shift. It launched a Cost Per Hour (that's CPH, acronym lovers) metric for buying ads last year. The promise to advertisers was that paying for how the FT would now be able to increase marketing effectiveness by measuring not just whether an ad is seen or not, but for how long.
"Our belief in the effectiveness of viewable ads, and the realisation that we need to find a different and complementary metric to CPM, led us to develop Cost Per Hour," says Dominic Good, the global advertising sales and strategy director at the FT.
"Partnering with advertisers, the Financial Times conducted five digital campaign brand effectiveness studies to measure the impact of the amount of time a user was exposed to a campaign. On average, an ad seen for over five seconds saw a 79pc increase in ad recall, over an ad seen for under five seconds. The further down the branding funnel, the more important the length of time an ad is seen becomes. Low attention has the same limited impact on brand perception as not seeing the ad at all."
Initial tests with advertisers like BP and Microsoft reportedly showed a significant uplift in brand recognition, and also ensured 100pc viewability of five seconds or more for clients' ads. This is a whole lot better than the industry standard agreement on viewability - half of an ad visible on-screen for at least one second.
Good believes that CPH can complement campaigns based on click-through rates or impressions. But he stresses how the digital ecosystem has changed dramatically in recent years, especially with the growth of Programmatic.
"In the whole digital ecosystem there are over six trillion ads that could be bought," he says. "A CPM trading model only looks at the quantity of ads. What viewability, and now a CPH metric, does is that it puts a quality control on these impressions. It identifies which impressions are of value and executes campaigns against inventory based on how long an ad is seen."
A new viewability study from Interpublic Group and measurement firm Integral Ad Science backs this up. They used eye-tracking and post-exposure surveys on a group of 10,000 consumers to measure brand recall.
The 'Putting Science Behind The Standards' report broke ads down by format; standard banners, rich media or large format and video ads. It also took context into consideration - the number of other ads on the page, which verticals the ads appeared in, the prominence of branding in the ads, and so on.
The report recommends that ads are placed in places they are likely to be viewed for a longer period of time, regardless of how long they're in view.
It's not rocket science. In a cluttered online environment, persistent visibility is a commodity that publishers have been slow to latch onto as something that's really valuable.
CPH may not be the whole answer to online display advertising's malaise. But it looks like it's an integral part of the solution. The Economist has also been trialling its own time- based ad campaigns and the FT has convened a working group of 30 publishers, advertisers and tech companies to build support for the idea of time-based campaigns.
In the meantime, the race for ad impressions continues across the web, with ever-decreasing returns. But something's got to give. It's about time.
Sunday Indo Business