In display advertising, brands typically pay a handful of cents for thousands of banner impressions in the hope that some of them are spotted briefly while a reader skims a website. As native advertising takes on display for dominance of the web, native marketplaces have taken a similar approach to pricing – brands pay based on the number of times a native ad shows up in a publisher’s editorial stream.
But that doesn’t work for Jerrid Grimm, co-founder of Vancouver-based native advertising startup Pressboard. In display, he said, it makes sense to charge based on how often users see or click on an ad. Native is fundamentally different. The headline or thumbnail shown on the publisher’s site isn’t the commodity being sold, it’s the content the user sees once they’ve clicked on it.
So really, native ad companies should be charging based on the number of users that saw content, not the number that saw the native ad that may or may not lead them there.
“What [brands] are really interested in is knowing how many people are actually reading the story,” said Grimm. “A sponsored story should be measured against the same benchmark as a pure editorial story.”
Accordingly, Pressboard is rolling out a new pricing model it’s calling “cost-per-read,” which charges advertisers based on the number of unique users that not only click through to a piece of content, but spend enough time there to read it.
Campaigns under this model have already been launched for Telus (pictured) and Best Buy.
The company will work with publishers to determine the average time it takes to read an article of a given length, and will offer advertisers a guaranteed number of “reads” (i.e. unique visitors who stayed on the page for an agreed fraction of the total read-time). Grimm gave the example of a 4-minute articleL: a visit would be counted as a “read” if the user stayed on the page long enough to read 30% of it – just over a minute.
Unlike native ad companies in the programmatic space, which have focused on distributing native ads and content across as many publishers as possible, Pressboard does largely manual, high-touch placements with a handful of key Canadian publishers like B.C. Living, Toronto Life and Van City Buzz. On that model, Pressboard has to charge more for each placement, and justify the increased expense.
Grimm said the natural way to do that is with a performance-based audience guarantee that ensures advertisers are only paying for placements that users actually read.
Although performance pricing is typically associated with acquisition-focused pay-per-click or pay-per-conversion campaigns, Pressboard’s pay-per-read is more balanced between direct response and brand campaigns.
The model works well for direct response advertisers, Grimm said, because reads drive conversions. He pointed to a case study the company did with Tourism Whistler, which ran a series of sponsored articles about activities and destinations in the region. Users that clicked through to Tourism Whistler’s site from those articles spent an average of 2.7 times longer on the site than users who clicked through from banner ads.
But the real opportunity is in brand advertising, where digital has struggled to prove its effectiveness. For brand advertisers, cost-per-read makes always-elusive consumer engagement concrete and measurable – it helps them uncover who is receiving their message, and (based on how long they spend with it) whether they’re really interested.
Notably, pay-per-read incorporates important metrics like viewability – if a “read” counts as 30% of the article’s read time, it’s clearly gone over and above the viewability threshold of 1 second. It also screens out accidental clickers and bots, which are excellent at generating impressions and clicks but mediocre when it comes to time-spent and scroll behaviour… so far (remember: people used to say the same thing about video completion rates before video exploded).
“A big motivation for us using a cost-per-read is to weed out fraudulent traffic and click bait,” said Grimm. “Analyzing time spent and reading behavior brings the metrics closer in line with how actual people read stories.”
Pressboard’s not the only native company to shift the focus to publisher-style metrics for sponsored content. In June, Toronto-based native ad company StackAdapt added average time on-page, bounce rate and other reader engagement metrics to its dashboard. Nativo, which just announced a partnership with Olive Media, also offers those metrics.
But Pressboard may be the first company to put its money where its measurement is. By not only offering engagement metrics, but using it as a currency for campaigns as well, the company is broadcasting its confidence in its product. Pay-for-performance can be a risky proposition for new and experimental ad formats that haven’t had time to mature.
One big worry is that as general awareness of native advertising grows, users will learn to identify it and deliberately avoid it. On cost-per-read metrics, that kind of mass consumer backlash will be hard to hide – and for performance-priced native ad companies, it will be crippling.
On the other hand, if readers become more comfortable with native ads, cost-per-read could be the best way for brands to get into native, because of its focus on measurable engagement. In the long run, it may be native’s measurability, as much as its improved performance, that helps it overtake display as the dominant format for web advertising.