February 22, 2021

CPCV vs CPV: Rethinking Video Advertising’s Pricing Model

Imagine a scenario where a restaurant didn’t charge you for your meal unless you ate every last morsel on the plate, even if you were comfortably full well beforehand. On the surface, it sounds like a great deal for the patron, a kind of reverse ‘all you can eat’ offer. But on reflection, does it seem like sensible business? Is it a deal which may be too good to be true?

Matt Keating
Matt Keating
Sales Director, VDX.tv
CPCV vs CPV: Rethinking Video Advertising’s Pricing Model

The digital video advertising world offers a real-life example of this concept: the very widely used Cost Per Completed View (CPCV) pricing model. Only when the video view time has ticked over from 99% to 100% does that view get charged. But does it make logical sense for partially completed views to be considered worthless?

On one hand, CPCV certainly has its benefits. It beats CPM as a video cost model in most situations, and it seems easy and simple to deal with: assuming a 30-second video duration, the whole ad gets viewed or you don’t pay a penny. On the other hand, audience behaviour and campaign performance are not always a black and white matter. When we know that performance measurement and attribution, not to mention human behaviour, can be a highly nuanced business, it starts to seem rather arbitrary to charge only for a completed view.

Why CPCV doesn’t always work

There seems to be a common perception that buying a ‘completed view’ must be, by definition, better and safer than buying a plain-old ‘view’- i.e. Cost per View or CPV. The assumption is that a ‘completed view’ equates to the ‘most engaged’ (and thus, ‘most likely to convert’) users, but this may not always be true.

Let’s explore a few scenarios where a ‘completed view’ may not be a reliable indicator of a high-value user:

  • A video ad starts playing in a user’s tab, but the user turns their attention to another tab while the video (no longer in the user’s view) completes in the original tab. This is not an uncommon occurrence and should be considered when looking at the campaign report. It certainly puts quite a different spin on what a ‘video completion’ actually means!
  • A video ad, or even the format and the placement, can be overly intrusive, creating a bad experience for the user.
  • An ad incentivizes a user to watch the full video. If the user has been incentivized, is that user as valuable as one who engaged with the ad on his or her own terms, of his or her own volition?

Is Cost per View (CPV) a better pricing model for video?

Instead of a model based on the idea that someone watching only 99% of your ad is of zero value, let’s consider more nuanced solution: CPV.

Time and attention-based CPV set ups are more reflective of how people actually interact with, and respond to, video ads. It’s also important to take into consideration the level of premium inventory the ad is going to be delivered against; 80% or 90% completion through premium inventory may be worth more than 100% completion through low-level inventory. And if you’re still unconvinced, it’s worthwhile to ask your video vendor if pricing can be adjusted to factor in those views that ‘only’ reached 80% or 90%. Keep in mind that adjusting your video ad to have your brand logo and call-to-action earlier on in the video can ensure that a full impact is made on the viewer, without requiring them to finish the video.

While it’s true that some CPV models only guarantee viewability up to the Media Rating’s Council’s definition – 50% of the ad in view for 2 seconds (for a video ad) – there are many others (including  VDX.tv’s model, with viewability validated by Moat by Oracle Data Cloud) that go further. I hope that as an industry, we can all agree that such a low threshold is merely table stakes, not a target to aim for these days.

Whatever model you buy on, it’s always worth asking your video vendor questions about what you’re getting, including how the ad is delivered, what the technical definition of a ‘completion’ or a ‘view’ is, and how viewability is verified (if by a 3rd party vendor, even better). That’s how you ensure transparency, align expectations, and set your video campaign up for success.

To learn more about VDX.tv’s CPV pricing model, click here or contact us at hello@vdx.tv

Subscribe below to stay on top of the latest updates!

You might also like