Online publishers face various challenges when it comes to ad monetization, and one key metric they need to understand is the metric vCPM (Viewable Cost Per Thousand Impressions).
In today's constantly evolving ad tech landscape, online publishers need to stay ahead of the curve to maximize their revenue potential. Understanding vCPM is an important part of this effort. By using this key metric, publishers can better evaluate the effectiveness of their ad inventory and optimize their ad placements to generate higher revenue.
In this article, we will take a closer look at vCPM, including how it differs from other ad metrics such as CPM and CPC, how it is calculated, and the benefits and strategies for publishers using vCPM.
What is vCPM?
vCPM, or viewable cost per thousand impressions, is a metric used to measure the cost of an ad per thousand viewable impressions. In other words, it measures the cost of displaying an ad to a thousand users who actually see it.
Viewability is a key factor in vCPM. The Interactive Advertising Bureau (IAB) has established guidelines for viewability, and many ad platforms and supply-side platforms (SSPs) now use these guidelines to determine which impressions are considered viewable. An impression is considered viewable if:
- at least 50% of the ad's pixels are in view for at least one second on a desktop, or
- at least two seconds on a mobile device.
vCPM differs from other ad metrics such as CPM and CPC in that it takes viewability into account. CPM, or cost per thousand impressions, measures the cost of an ad per thousand impressions served, regardless of whether they are viewable or not. CPC, or cost per click, measures the cost of an ad per click, regardless of whether the ad was seen or not.
By using vCPM as a key metric, publishers can ensure that they are only paying for viewable impressions, which can lead to higher engagement and better results for advertisers. Additionally, vCPM can help publishers optimize their ad placements and increase their revenue potential by focusing on viewable impressions rather than simply impressions served.
What is vCPM vs. CPM vs. CPC?
vCPM, CPM, and CPC are three common ad metrics that are used to measure the cost of displaying ads. While each metric has its own unique approach, they all share the goal of measuring the cost of ad campaigns.
CPM, or cost per thousand impressions, measures the cost of an ad per thousand impressions served, regardless of whether they are viewable or not. CPC, or cost per click, measures the cost of an ad per click, regardless of whether the ad was seen or not. vCPM, or viewable cost per thousand impressions, measures the cost of an ad per thousand viewable impressions, considering only impressions that are considered viewable.
The main benefit of using vCPM over CPM and CPC is that vCPM provides a more accurate measurement of ad effectiveness. By focusing on viewable impressions, publishers can ensure that they generating ads that are actually seen by users, rather than simply impressions served or clicks. This can lead to better results for advertisers, as their ads are more likely to be seen by their target audience which makes the publisher's website more attractive for premium ad campaigns.
Additionally, using vCPM can help publishers optimize their ad placements and generate higher revenue. By focusing on viewable impressions rather than simply clicks or impressions served, publishers can ensure that their ad placements are optimized for engagement and effectiveness. This can lead to higher click-through rates, higher conversion rates, and, ultimately, higher revenue for publishers.
Overall, while CPM and CPC can be useful metrics for measuring the cost of an ad campaign, vCPM offers a more accurate and effective way to measure the impact of an ad campaign and optimize revenue potential. By using vCPM, publishers can ensure that they are creating a high proportion viewable impressions, leading to better results for advertisers and higher revenue for publishers.
How do you calculate vCPM?
To calculate vCPM, or viewable cost per thousand impressions, you need to know the total amount spent on the ad campaign, the total number of ad impressions delivered, and the percentage of impressions that are viewable.
The formula for calculating vCPM is:
vCPM = Total Spend / ((Total impressions * % in-view) / 1000)
Here's how to calculate the metric using this formula:
- Determine the total spend for the ad campaign, which is the total amount of money spent on running the ads.
- Determine the total number of ad impressions delivered during the campaign.
- Determine the percentage of impressions that are viewable. Viewable impressions are defined as at least 50% of the ad being visible on the user's screen for at least one second.
- Use the formula above to calculate vCPM by dividing the total spend by the total number of viewable impressions, then multiplying the result by 1,000.
For example, let's say a campaign costs $10,000 and delivers 100,000 impressions, with 60% of the impressions being viewable. To calculate the vCPM for this campaign, we would use the formula as follows:
vCPM = $1,000 / ((100,000 * 60%) / 1000)
vCPM = $1,000 / (60,000 / 1000)
vCPM = $1,000 / 60
vCPM = $16.67
In this example, the vCPM for the campaign would be $16.67 per thousand viewable impressions.
However, it's important to note that several factors can affect the calculation. Ad format, ad placement, and ad type can all impact the viewability of an impression, which in turn affects the vCPM. For example, video ads tend to have higher vCPMs than display ads, as they are generally more engaging and have higher viewability rates.
Ad placement is also an important factor to consider when calculating vCPM. Ads placed above the fold tend to have higher viewability rates than those placed below the fold, as users are more likely to see them. Finally, the type of ad can also impact the vCPM calculation. Rich media ads, for example, tend to have higher viewability rates than standard display ads.
By considering these factors when calculating vCPM, publishers can gain a better understanding of their ad campaigns and optimize their ad placements and formats to generate higher revenue.
Is a High vCPM Rate Good?
A high vCPM rate can be a good indication that an ad campaign is performing well. By measuring the cost per thousand viewable impressions, vCPM provides an accurate representation of the value of an ad campaign. A high rate indicates that advertisers are willing to pay a premium for ad placements that are highly viewable, which in turn suggests that the ad campaign is effective in reaching and engaging the target audience.
Factors that can lead to a high vCPM:
- Ad placement in high-traffic areas
- Rich media ad formats, such as interactive ad units and video ads
- Fast page load speed and ad auctions
By focusing on ad placements and formats that generate higher vCPMs, publishers can ensure that they are getting the most value for their ad inventory. Additionally, a high vCPM may be desirable for advertisers who are looking to reach a highly engaged audience and are willing to pay a premium for ad placements that offer high viewability rates.
How to Improve vCPM?
Improving vCPM is essential for publishers looking to maximize their ad revenue potential. Fortunately, there are several strategies that publishers can use to improve their vCPM rates and optimize their ad revenue.
Improving vCPM can be a key focus for publishers looking to maximize their ad revenue. Here are a few strategies that can be effective in improving vCPM:
- Ad Optimization and Ad Targeting: Publishers can optimize their ad placements and formats to increase viewability and engagement, which can lead to higher vCPMs. Additionally, publishers can use first party data to better target their ads to relevant audiences, which can lead to higher engagement rates and higher vCPMs.
- Experiment with Ad Placement: Publishers can test different ad placements to see which generate the highest viewability rates and highest engagement rates, which in turn can lead to higher vCPMs. For example, moving an ad placement from below the fold to above the fold can increase viewability rates and drive higher vCPMs.
- Run A/B Testing: Publishers can test different ad formats and sizes to see which generates the highest engagement rates and highest vCPMs. A/B testing can help publishers identify which ad formats and sizes are most effective for their audience and content.
- Use Heatmap Tools: Heatmap tools can provide publishers with valuable insights into user behavior and engagement, which can inform ad placement and format decisions. By analyzing heatmap data, publishers can identify which ad placements are most effective in generating engagement and driving higher vCPMs.
- Use AdEngine: Snigel’s AdEngine offers a range of ad optimization services that can help publishers improve their vCPMs. With expertise in ad optimization and header bidding, Snigel can help publishers identify and implement strategies to maximize their viewability and ad revenue.
By implementing these strategies, publishers can improve their vCPMs and generate higher revenue from their ad inventory. Whether through ad optimization, A/B testing, or using Snigel’s ad ops services, there are many approaches that publishers can take to drive higher vCPMs and optimize their ad revenue potential.
In conclusion, vCPM is an important metric for publishers looking to maximize their ad revenue. By measuring the cost per thousand viewable impressions, publishers can ensure that they are generating ads that are actually seen by users and optimize their ad placements and formats to generate higher revenue potential.
To improve vCPM, publishers can implement strategies such as ad optimization, A/B testing, and using Snigel's ad management services. With expertise in vCPM optimization and header bidding, Snigel can help publishers identify and implement strategies to maximize their ad revenue potential. In addition to vCPM, related topics such as programmatic advertising, header bidding, and third-party-cookie alternatives are important considerations for publishers looking to stay ahead in the ad tech landscape.
Snigel offers a range of resources and blog posts on these topics, which can provide valuable insights and guidance for publishers looking to optimize their ad revenue potential. To learn more about Snigel's ad management services and expertise in vCPM optimization, visit our website or contact us today.