Friday, May 27, 2011

Why Cost-Per-View Pricing For Video Needs One More Thing

In an interesting piece posted today by Erick Hachenburg, the question is raised as to what cost-per-view pricing for digital video really measures.

Mr. Hachenburg is a proponent of this new CPV metric, also being heavily endorsed by both Google and TubeMogul.

With CPV, the user can decide whether to interact with the video or not. If they do click in to watch, the client pays twenty to twenty-five cents per click-in.

This, on its own, is nice. But, it’s not enough to truly measure effectiveness.

What needs to be added are the view duration figures.

After all, a thirty-second video that viewers click-in to watch and then leave after five seconds should be deemed less effective than a thirty-second video that viewers click-in to watch and stay for all thirty seconds.

With CPV, the advertiser pays media the same for both views - one five seconds long and the other thirty seconds long.

I’m not saying we should change this. Clicking-in is the first part of engagement. Media should be paid when viewers click in. After all, they’ve done they’re job.

The job of keeping the viewer engaged isn’t the media’s. That's the job of the creative agency.

They, and not media, should be held accountable for view duration.

The way to hold them accountable is to pay them based on view duration. It is a model called View Duration Compensation (VDC).

Adding VDC to CPV allows the advertiser to separate media from creative and hold them both accountable financially.

The more viewers that click-in, the more the media gets.

The longer they view for, the more the agency gets.

In other words, CPV + VDC = Effectiveness.

Both are needed.

And now, both can be paid for individually.

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