Friday, July 30, 2010

Why Do Advertisers Keep Paying For Impressions When They Can Pay For Actual Engagement?

That’s the question posed by Mitchell Reichgut, CEO of Jun Group, a video distribution partner of choice for Fortune 500 brands.

Mr Reichgut gives an example where a $150,000 ad buy at a $4 CPM delivers 93,750 fewer clicks than a $150,000 ad buy at a $1 CPE (cost per engagement).

That’s substantial.

Mr Reichgut goes on to explain that with engagement campaigns, the results are guaranteed as ads are displayed until they hit their numbers, putting the onus on the publisher to deliver value.

So, why aren’t more advertisers paying for engagement rather than impressions?

Because the way the system is currently set up, CPE (cost per engagement is just another way to describe CPC (cost per click).

I haven’t explored the Jun Group’s site, but I have to guess that the advertiser isn’t paying for how long the viewer is “engaged” with the spot for, but rather, just for initiating the view.

In other words, the viewer might only watch 5 seconds out of 60 and that is called engagement. That’s not engagement. That’s a lack of engagement when less than 10% of a spot is watched.

Are publishers willing to change? To charge for how long the engagement actually lasts for? Of course not. Publishers have no control over how “engaging” the commercial actually is.

Who’s responsible for that? The creative agency.

What publishers do have is the view duration data that tells the advertiser how long viewers engaged with their spots for.

If I were a publisher, I’d sell this data to advertisers over and above the cost of running their spots. What would advertisers do with this data? Hold their creative agencies accountable for view duration.

It’s called Second-By-Second Compensation. And it’s a way for advertisers to get accountability over their agency’s creative output.

The problem with the term “engagement” is that media is trying to use it and "engagement" is basically a creative term. There’s a time element to engagement that media can’t guarantee.

And shouldn't.

That said, media can certainly sell the data that allows engagement to be guaranteed.

And, if they’re not doing that, then that is truly an opportunity missed.

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