The Rise Of The qCPM: Rewarding Quality In Programmatic Buying

The lowest priced ads don’t always deliver the best results – especially for digital branding campaigns – so ad buyers are re-calculating CPM to a quality CPM (qCPM).

The qCPM only counts impressions that are viewable, with on-target delivery, optimal frequency and in brand-safe environments. By looking at performance factors beyond cost, ad buyers can take a more nuanced view of performance and discover if campaigns truly met their clients’ goals. The qCPM also realigns incentives, encouraging buyers to procure ads that aren’t just low cost, but also high quality.

Among the players singing the praises of the qCPM are Hearts & Science, Essence, Europe-based agency Adlicious and tech company Parsec Media’s Adelaide, which licenses its tech to brands and agencies.

All four use the qCPM to evaluate campaign performance. Adelaide and Adlicious also use it to optimize in-flight campaigns.

The qCPM metric – which is also referred to as valuable CPM (VCPM) or cost per valuable impression (CPvM) – has helped increase programmatic budgets and steer clients away from fraud.

“When a client is brand building, you can’t use data and optimization if you don’t have an exposure,” said Adam Heimlich, who joined as president of Adelaide this spring after serving as an SVP overseeing programmatic trading at Horizon Media.

The disconnect ad and the action makes brands vulnerable if they only buy using a CPM. “Brands coming into digital video is what caused the digital fraud crisis,” Heimlich said.

QCPMs first emerged in 2014, the same year that the ad fraud crisis hit a fever pitch and WhiteOps estimated 23% of all video impressions were fraudulent.

Since then, qCPMs have been a quiet contributor to the decrease of ad fraud.

As the metric matures, early adopters of qCPM are seeing benefits and applications beyond measurement and optimization – like using it for procurement.

The following is a list of agencies and buy-siders who’ve adapted quality metrics. The first two, Hearts & Science and Essence, use it for post-campaign evaluation.

The second two, Adelaide and Adlicious, incorporate the qCPM for optimization.

Hearts & Science

Omnicom Media Group has used the cost-per-valuable-impression (CPvM) metric for five years. Clients calculate value differently, but include factors like on-target frequency, audience, viewability and the right demographic.

Over a year ago, Omnicom agency Hearts & Science brought the CPvM metric to clients’ procurement teams, so they could evaluate the agency not just for the prices it could secure, but the quality of the inventory it bought. Now, most of its large clients use the CPvM.

“Procurement can now hold the agency accountable not just for efficiency, but efficiency and effectiveness,” said Megan Pagliuca, chief data officer at Hearts & Science.

Having a metric that accounts for quality empowers the agency to pay more for impressions that ultimately will be more effective. “This change has put the right incentive models in place, and helped us realize the vision of being a data-first agency,” Pagliuca said.

In some cases, switching to CPvM meant clients noticed that they were paying higher CPMs, but lower CPvMs. Hearts & Science worked to educate clients that hitting the right audience at the right frequency, with a viewable impression, can cost more – but clients are getting more too.

The ROI brands are seeing is proving this theory out. Clients have seen cost savings as well as improved brand lift, Pagliuca said. And even direct response clients see sales lifts when they move to the CPvM model.

Hearts & Science doesn’t use CPvM as an optimization tool, because it wants traders to have more freedom to use more granular measures to tweak campaigns. The CPvM serves as a KPI for post-campaign analysis.

Re-calculating the CPM metric is complex: It requires combining log-level data from the ad server and data-management platform along with event-level integrations from third-party viewability providers. Then, the compounded metric is used to evaluate how the campaign performed.

Essence

Essence started using the qCPM metric around 2014 to solve for a client that wanted a better way to measure branding campaigns.

“We were not satisfied with reporting just on impressions and CPMs,” said Gila Wilensky, Essence SVP of media activation in North America. “For campaigns driving brand awareness, consideration, brand love, it’s harder to assess what’s valuable and differentiate between impressions bought in different ways and places without [the qCPM metric].”

Essence calculates its qCPM using a similar log-level data approach. The metric looks for viewable, fraud-free, on-target impressions in the right geographic area, at the right frequency and in brand-safe places. Like Hearts & Science, qCPM evaluates campaigns after the fact.

qCPM has enabled apples-to-apples comparisons between programmatic campaigns and direct buys with a publisher.

“There was a perception in the industry for many years that programmatic was poorer quality inventory,” Wilensky said. “This [metric] was a way for us to compare the two and level the playing field.”

As with Hearts & Science, in some cases, Essence clients end up paying a higher CPM for impressions because their qCPM is lower. “There were different surprises for different campaigns as we got insights about quality, not just quantity,” Wilensky said.

Adlicious

The German media agency Adlicious takes a tech-driven approach toward creating QCPM. Instead of combining data after the fact, it scores impressions to enable optimization toward the metric in real time. All of its branding advertisers have used the metric for the past three years.

The agency scores different ad units for their branding impact. Then, it includes that weighting as part of the qCPM metric – which is not a part of the calculation for Essence or Hearts & Science.

For example, a small 300×250 box might be weighted a 0.5, while a large desktop billboard might get a score of 4.5.

“Small ads with a factor of 0.5 don’t have a big impact on branding,” said Viktor Eichmann, co-founder and managing director of Adlicious. That’s because users either don’t see the ad or don’t pay attention.

Adlicious multiplies the CPM by this branding impact score as well as the percentage of ads that are viewable and the percentage of ads that hit the optimal frequency of ad exposures.

“This is a great metric for branding effectiveness, and to compare different agencies,” Eichmann said. In Germany, many advertisers work with multiple agencies. But sometimes the agency bringing in a lower average CPM for campaigns bought ads of lower quality – exactly what qCPM is designed to uncover.

Adlicious feeds the results of the qCPM into its client’s DSP in near real time, allowing the DSP to optimize for frequency in the target group or buy fewer of those too-small ads. That real-time optimization of qCPM sets its approach apart, Eichmann said.

“It’s technical, and it’s a lot of work for agencies to drive the campaign this way,” Eichmann said. “I think that’s why it’s not being pushed by the big agencies.”

Adelaide

While most agencies have built qCPM tech themselves, Parsec Media -– which had focused on cost-per-second advertising — launched Adelaide this year with the goal of helping brand-focused advertisers and their agencies buy the most attention-filled digital ads.

“Parsec used to be about duration,” said company founder and CEO Marc Guldimann. “Now, it’s duration weighted by coverage and clutter, which we sum up as attention units.”

Like Adlicious, Adelaide scores different types of ad units. But it adds in factors beyond size to look at how long the ad is in view and overall ad clutter to generate an “attention score.”

Adelaide’s QCPM focuses on branding campaigns. Brands can optimize toward the ads with more attention, improving their outcomes. “If the ad with the $4 CPM is getting more attention units than the $6 CPM ad, it’s a better value,” Guldimann said.

Part of Adelaide’s pitch is about its information advantage – brands who understand quality can find undervalued impressions that deliver the best results.

And there’s a second benefit: Broader adoption of attention metrics makes for a healthy ad ecosystem.

For instance, when advertisers wanted “completed views,” publishers used video players that shrank but continued to play as a user scrolled. Guldimann said the qCPM would instead reward uncluttered, high-impact ad environments.

“When the industry starts to use metrics that are proxies for value, good experiences and good environments are worth more,” he said. “That will inherently clean up the ecosystem.”

This post was syndicated from Ad Exchanger.