The Shifting State of Digital Ad Sales

Digital Ad Sales

Image from: Sales / Shutterstock

As readers of this blog know, at the end of this year the industry will begin transitioning from a served to a viewable impression standard.

This may not happen tomorrow, or in October—but it will happen sooner than you think. Advertisers will finally stop paying for ads that have no chance of being seen by the consumers—that is, those ads that are below the fold or that are skipped too quickly.

This is a true paradigm shift for an industry that since its early days has relied on direct marketing metrics for optimization, trading impressions as a questionable commodity. Presumably, after the transition is over, an ad impression will evolve from being a mechanical event—the creative file being loaded on the Web page—to an “opportunity to see” event: something of inherent value to a brand, just as in traditional media.

The current IAB definition of viewability—at least half of pixels that fall within the visible area of the browser be viewed for at least one second—will, most certainly, become an industry standard for display. The discussion is still raging about streaming video, however, and it is very likely that the industry will follow Google’s TrueView self-imposed standard of five-seconds-in-view play.

Feeling too comfortable? Brace for impact. The shift will be challenging, to put it mildly.

According to estimates from varying sources, 30% to 50% of measurable display ads currently served are below the IAB viewability standard. The averages do not tell a good story in this case, because the variances are also very high, with some campaigns’ viewability being as low as 8%, even on desirable sites.

Moreover, the viewability of a significant portion of display ads served via iFrames cannot even be measured at this point without adopting new technologies (e.g., switching to IAB-promoted SafeFrames). It is clear, however, that once the invisible ads cease or become free, the CPM rates for the remaining viewable inventory will jump in compliance to hard market laws. That will shake publishers, advertisers and agencies alike, necessitating changes in budget allocations, new pricing models and new technologies/partnerships to monitor viewability. According to the most extreme scenarios, online CPMs for viewable ads could well exceed those of TV—at least, for the foreseeable future.

Will it all be worth it? Will buying these newly appreciated ads result in greater brand impact and ROI for advertisers?

What we observed is that simply removing all the ads viewed for less than a second does not necessarily guarantee an improvement in overall effectiveness, unless the average viewability is much, much higher than 1″. It usually took 5-10 seconds for a digital ad to produce some impact. While an invisible ad cannot influence by definition, apparently a barely viewed ad is not much better.

Our research deals with live campaigns, not lab reenactments—but there’s a potential scientific explanation. Orienting response, the hard-wired neurophysiological process of discovering and internalizing new information by humans, takes longer than counting to “one Mississippi.” Unless you are consciously waiting in full attention for the ad to appear on the page, even the most stunning creative will leave no trace in your memory after just one second.

Granted, publishers should not be held responsible for an ad’s effectiveness; that’s the responsibility of creative directors and media planners. The publisher’s job is merely to ensure that the ad has been seen. But an “opportunity to see” what is so brief that it rules out a chance to remember does not look like a good deal. This is perhaps why traditional channels prefer to err on the safe side when it comes to “opportunity to see.” TV started with 60-second spots and stopped at 15 seconds. There are no 5-or 10-second commercials, although they are now technologically possible and will probably find buyers.

The online viewability initiative is a step in the right direction: creating a brand-friendly ad ecosystem. It gives the online industry a fresh start, unless it remains too timid. By setting standards at the technical minimum, online/digital advertising industry is walking into the same old trap, positioning itself as secondary to TV—again. Buying one-second ads is like trading penny stocks. In the long term, it would probably be better for publishers if viewability standards were higher and “allowed for impact.” Inventory would turn more lucrative, the share of online would increase at the expense of TV budgets, and markets would take care of the rest.

About Yaakov Kimelfeld:
Yaakov Kimelfeld, Ph.D., is Chief Research Officer at Compete. He is an industry expert in media research and analytics and is responsible for the establishment of best-in-class processes for refining and expanding Compete's data, analytic, and research products. Connect with him on Twitter @YaakovKimelfeld.