What Counts More Than CPM is Cost Per Engagement (CPE)

In the early days of television the ads were all placed in programs that the advertiser not only sponsored but in some cases produced Those were the days when marketers truly understood and appreciated Context EffectWhich is the fact that a specific creative execution performs better when it is psychologically aligned with the content that is its program leadin This has been proven over and over again in innumerable studies 70 of which are summarized here in ARF39s Journal of Advertising ResearchThe average lifts in ad recall and other surveybased measures are 15 across these 70 studies and hundreds of others In virtually all of these studies the psychological alignment was determined based on one simple dimension eg happysad seriousfunny etcHoward Shimmel then head of research at Turner a longtime believer in the value of context sponsored a study using Nielsen NC Solutions NCS to measure amp8211 not survey results amp8211 but actual sales results amp8211 using a multidimensional way of measuring the alignment of ads with programs The method is RMT39s DriverTagsTMNCS found that in two brand schedules the context lift in sales effect averaged 23 using RMT DriverTagsTM RMT forecasted that the lift could be 36 if the buys were made using its data in the prebuy stageRecently with the help of Standard Media Index SMI whose media cost data comes directly out of agency computers and is factual rather than estimated RMT conducted a quotRebuyquot to sharpen its forecast This new forecast is that the sales effect lift can be higher 69 And interestingly there is a positive correlation between the programs that have higher indices of reaching product category purchaser households and the programs that have higher resonance with the adsHowever there are two factors which will to some degree offset these high improvement scoresCable networks will charge a premium for selecting specific programs typically 15 which is why we recommend bidding 15 more when program context is aligned with the ad on DriverTagsTM That would reduce the 69 improvement to a 54 improvementThe Rebuy quotboughtquot 6 times the number of programs of the actual buy meaning that seeking resonance between ads and programs will generally lead one away from high CPM programs However we know that tentpole programs have a positive attentional context effect across all ads and being high rated drive schedule reach higher Therefore one will need to set optimizers to buy the right balance between reach and ad resonanceThese considerations suggest that the gains available to marketers is not so high as 69 but is substantial none the sameThese findings have inspired programmatic technology company Reset Digital to build a bidder that can make microsecond decisions based not only on target alignment but also on context alignmentCrackle Plus and its owner Chicken Soup for the Soul have become the first OTT network to agree to provide the programspecific data to the Reset Digital bidderSome networks have misread the 1998 US VPPA Federal Law The Video Privacy Protection Act to mean that they cannot reveal the program an individual subscriber is watching on OTT In reality the law does not say that As long as the mediating parties Reset Digital for example do not know identity nor reveal the individual anonymized ID39s program viewing to any other party the law has been followed The point of the law is not to reveal anyone39s program viewing preferences TRA for example did that very well during my tenure there but that never impeded the use of program level analytics on an aggregate basisThere is a mutual winwin opportunity for advertisersagencies to gain more value from their video ad investments amp8211 being able to use psychological alignment of at least 30 as a proxy for engagement amp8211 while sellers can also gain a 15 kicker on their revenues amp8211 quite relevant in today39s environmentWhy 30 Because a study done by 605 for one of the largest CPG advertisers showed at that resonance level that even a single ad exposure moved the needle strongly on first brand mention 62 and purchase intent 25By using 30 resonance which can be determined in the prebuy as a proxy for engagement buyers and sellers can move from CPM to CPE which will directly address the concerns of advertisers focused today on attention paid to their adsClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNetamp160

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What Counts More Than CPM is Cost Per Engagement (CPE)

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James Fennessy

Bill Harvey

We Are the Outliers - By Jack Myers

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What Counts More Than CPM is Cost Per Engagement (CPE)

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James Fennessy

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We Are the Outliers - By Jack Myers

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