On October 23rd, 2014, we updated our
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Demand SupplyPrice When supply is constrained, price is extremely sensitive to demand.CPM Impressions Quantity 5
… with more marketing dollars comingonline, CPM will go up, right?
The supply and demand model has two requirements: Supply & Demand are Independent Supply is Resource Constrained
Media Market ExamplesAd Medium: USA Network TVConstraint: 32 spots per hour, 5 hours per viewer = 160 spots Scarcity: Ad Pricing: Increasing 8
Media Market ExamplesAd Medium: Inventory sold through Display Exchanges Constraint: None! Cost are negligible, ad space is virtually unlimited. Scarcity: Ad Pricing: Declining 9
If demand increases, Demand but supply is unconstrained Price DoesPrice NOT Increase!CPM Supply Impressions Quantity 10
The Problem unlimited servedCountingimpressions hurts advertisingeconomics.The SolutionIntroduce Digital Scarcity to the system.
Achieving Digital ScarcityOnly count impressions that reached a real userand had a chance to make a real impact. were in-view delivered in the target geography displayed in a brand safe environment not fraudulent 12
vCE Charter Study18campaigns380,898sites1,772,117,123impressions Allstate 13
comScore vCE charter study results in-view rates across top 500 publishers Sites 7 % in-view 100% in-view 69% in-view ? ? ? best average worst On average 69% of ads were in-view, meaning 3 out of 10 were never seen. 14 source: comScore vCE charter study
The Above-the-Fold Myth?Above-the-fold in-view rates ranged from 48% to 100% source: comScore vCE charter study
Some Below-the-Fold ads areactually premium inventory.Below-the-fold in-view ranged from 3% to 67%. source: comScore vCE charter study
impressions CPM % served $5 ÷ 100% = $5 nominal CPMimpressions CPM % viewed1,000 $5 ÷ 75% = $6.67 effective CPM If only 75% of ads were seen the Effective CPM is 33% higher! 17
The Viewable-Impression-Guarantee Model:Publisher EconomicsValidate Value | If impression viewability isguaranteed, publishers can sell currentnon-premium inventory at premium prices.Sell More | Publisher is able to sell 15% moreguaranteed viewability premium impressions than theycurrently sell in gross premium impressions. 18
Conclusions Moving from served to validated impressions introduces scarcity and drives attractive economics:1. Above/below the fold placement becomes irrelevant.2. Most validated non-premium inventory becomes premium. 19
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