Only 25% of programmatic video ads are viewable: report

By now it’s well established that around half of display ad impressions can’t be seen, which has been a cause for concern among online advertisers who aren’t sure they’re getting fair value out of their media dollars.

But updated estimates from TubeMogul about the state of viewability in online video may be about to throw another log on the fire. According to its Q3 report on the Canadian marketplace, only 25% of video ad impressions on auction had an opportunity to be seen by humans.

That’s a substantial drop from Q1 2015, the last time TubeMogul released its numbers on viewability in the programmatic video marketplace. At that time, average viewability was 38%, and at least in the same ballpark as display.

However, Taylor Schreiner, TubeMoguls’s vice-president of research, said it may not represent a real decline in inventory quality, but rather an increase in market visibility.

“In Q2, we increased our ability to capture viewability data on previously unmeasurable impressions, many of which fell below the Q1 average,” he said in an email. “As a larger portion of impressions are explicitly measured, we’ve found these newly measured impressions less viewable than the Q1 average.”

“The viewability rates referenced are similar to what we’re seeing in market,” Xaxis Canada managing director Rodney Perry told Marketing in an email. He said the low rates were likely part of the reason publishers have been reticent to move to viewability as a currency for media buying (something that a lot of marketers and agencies have demanded). He also noted that the rates Xaxis sees for video inventory on the market are generally much lower than in display or mobile.

TubeMogul is the only company that publicly reports viewability estimates specific to the Canadian video marketplace, so there’s no way to say whether 25% is a high- or low-end estimate. It uses the MRC’s standard definition of a viewable impression, which must have at least 50% of its area on-screen for 2 consecutive seconds. TubeMogul also measures viewable completions (the rate at which ads were both viewable and played to completion), which was just 13% on average for programmatic pre-roll across Canada.

In terms of the actual cost of securing viewable impressions — which many media planners argue is a more relevant metric — lower viewability rates mean a substantial increase in rates. Comparing numbers from TubeMogul’s recent report and its Q1 2015 quarterly, Canada’s average cost-per-thousand viewable impressions (vCPM) has more than doubled since Q4 2014, from $24.04 to $49.08.

Factoring the weak Canadian dollar, Canada’s average vCPM is still substantially less than the current average vCPM in the U.S. of US$45.10 (or approximately CAD$58.42).

Bad actors see more value in video

Karel Wegert, VP of digital media systems at Media Experts, also said his agency’s trading desk is seeing lower viewability on programmatic video inventory. “There’s a lot of gaming of the system going on, primarily because it’s higher value inventory. This is where I think there’s more effort being made by both publishers and fraudsters in driving revenue,” he said.

Wegert noted that direct sources of inventory, as well as YouTube ads — which were recently removed from Google’s open exchange — tend to have better rates. The open exchanges are less well-regulated and provide more fertile ground for bad actors.

A big factor is the lack of transparency about what’s actually being delivered, he said. Many impressions are sold as pre-roll but run in small-format video players embedded in banner ads, which are a lot less likely to be seen. There’s been an alarming trend in marketplace middlemen buying banner ad impressions on the exchanges and re-selling them as video at a two or three times the price, a practice that’s been coined “arbitrash.”

Wegert said he sees TubeMogul’s estimates as a “word of caution” about the video marketplace. “You need to be very aware of what’s going on in the video space, and you need to put a lot of filters out there,” he said.

According to TubeMogul’s report, advertisers can get a lot more value by narrowing the field using viewability filters and optimization. Non-subscription streaming services (such as CTV Go) see a significantly higher average viewability rate of 33%, which means that despite higher average rates, the cost of a thousand viewable impressions on tier 1 streaming sites is actually lower than average – $34.46.

Sites that have been optimized for viewability, meanwhile, reach 34% viewability. And on mobile and connected TV, viewability rates exceed 80% (with the caveat that the MRC has not yet accredited any measurer for mobile viewability).

Schreiner also said that using TubeMogul’s programmatic algorithms to optimize buys for viewability has boosted campaign viewability rates for clients by 10 percentage points on average.

Trading desks also tend to mix inventory sources across programmatic and direct, and apply their own tactics to boost viewability. Wegert said that by aggressively screening inventory sources and tracking rates, Media Experts is able to reach rates on par with display. “You can certainly get around it,” he said. “We are able to achieve higher-than-average viewability rates because of the filtering we put in place.”