The Future of Viewability

November 2012

Executive Summary
Ad viewability has emerged as a core challenge for marketers hoping to quantify and validate their online display investment. Given the advancements in technology that often outpace our ability to measure it, online advertising has lagged in its ability to assure that an impression does in fact mean that a user has viewed the creative. This is of chief concern for brands that are paying for ad space on a CPM basis, in which a below the fold impression may be counted without considering viewability. Online ad viewability is a complex concept with several stakeholders ranging from brands and agencies to ad networks and measurement vendors. The Making Measurement Make Sense (3MS) initiative was created last year under the leadership of key industry organizations such as the IAB, the 4As, the ANA and MediaLink. The core purpose of this partnership is to propose standards for metrics and advertising currency that will enhance evaluation of digital media and facilitate cross-platform comparison for brand marketing. The existence of this consortium of influential industry stakeholders is critical towards advancing key standardization initiatives and ensuring widespread participation and adoption. This spring, 3MS engaged Bain Consulting and the Media Ratings Council (MRC) to manage a pilot program focused on the topic of ad viewability, of which 360i was an active participant.

Key Takeaways 1
The viewable ad impressions metric is a necessary evolution to the online advertising model. Adoption of the ad viewability metric will ensure marketers understand the real impact of their media investment. Brand marketers paying top-dollar for high-quality inventory will be able to confirm that their investment garners strong ad view, and direct response advertisers will be able to track viewability levels against conversionoriented results.

Measuring viewability is an ongoing pursuit that will be pushed forward by innovators, with greater polish and evolution emerging as more people adopt the new metrics. As for now, the pilot uncovered challenges that must be overcome before ad viewability will be embraced. For example, the number of impressions that could not be measured for viewability poses a significant challenge. This and other challenges underscore the need for further investigation before viewable impressions can become an accepted metric pan-industry.

The implications of a standardized viewability metric are substantial and tremendously positive for publishers and consumers alike. The ad viewability metric will shift how the industry perceives the monetization of online real estate. As the finite world of TV inventory commands higher CPMs, a more scarce supply of premium online inventory (as determined by high viewability rates) will likely do the same as it simultaneously improves the consumer experience by de-cluttering web pages.

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360i fully embraces the efforts being made by 3MS to advance the cause for better measurement and standardization in digital media. Viewability is a pivotal component that will allow marketers to collectively evolve into a more apples-to-apples cross channel attribution system, which is the Holy Grail of successful marketing. This report will outline the challenge of viewability and share key results from the pilot program.

Introduction: What is Viewability?

Online advertising has pressed for progress in nearly every medium when it comes to driving advanced accountability and trackability, but there is one area where the industry has fallen blatantly short ad viewability. What is the value of an online ad unit if no one ever sees it? This challenge is the chief reason why 3MS was established in 2011. As you consider the origins of viewability as a meaningful metric, take a look at the screenshot below, which shows the bottom third of the CNN.com homepage. If a user never scrolls all the way down the page, he or she will never see these ad units. Yet standard ad-serving technologies still count this ad load as an impression, and potentially assign conversion credit on a post-view basis regardless of whether the ad was truly ever in view.

The 3MS initiative was created to enhance and standardize digital metrics and establish a measurement governance model that allows for cross-platform comparison. As part of this effort, the group has created 5 Guiding Principles of Digital Measurement. The first principle, regarding a new standard of viewable impressions, serves as the core focus of this report. Principle #1 Move to a viewable impressions standard and count real exposures online. Today we count served impressions as recorded by ad servers. Often, ad units are not in a viewable space to the end-user or fail to fully load on the screen potentially resulting in substantial over-counting of impressions. Viewable exposures are increasingly the norm across other media and better address the needs of brand marketers. (Source: 3MS)

The following section outlines 360is participation in the 3MS agency pilot program related to viewability.

About the 3MS Pilot Program

The primary goal of the 3MS initiative is to phase out the industrys dependence on the ad impressions-served metric and replace it with the viewable impressions metric. The viewable impressions metric, as preliminarily defined during publisher pilot programs, focuses on two factors: area and duration. By this standard, a viewable impression is reported when at least 50 percent of the ad content on a web page is within the visible area of the viewer's browser window for one second or more. Supervised by the Media Ratings Council (MRC), the agency-focused pilot was designed to uncover and address several aspects of the proposed transition to a viewable impression. The pilot was designed to assess advertiser campaigns in live environments and test viewable impression parameters in order to better understand measurement limitations. Several agencies were selected to participate (including 360i), alongside measurement and ad serving providers, during a trial period in May-June 2012. MRC provided pilot management support and unbiased analysis of the pilot results. A total of 17 advertisers and 12 agencies participated in pilot across 22 campaigns, representing more than 3 billion served impressions that ran in variety of different environments.

Results & Reactions

Data released by the MRC to pilot participants revealed the following key findings. 1. Viewability rates or, the percentage of impressions for which the viewable/non-viewable status was determined varied widely by campaign; from a high of 78.6 percent to a low of 7.3 percent. The graph below shows varying viewability rates across 22 campaigns measured in this study.

Viewable Rate
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 38.3% 26.7% 21.0% 14.7% 15.1% 15.7% 7.3% 43.7% 41.1% 27.1% 38.4% 78.6% 66.6% 58.3% 57.4% 43.4% 68.1% 58.3% 44.3% 38.4% 33.7% 67.1%

Campaign

2.

The percentage of served impressions measured for viewability ranged from a low of 0 percent to a high of 76.7 percent. Note: In this chart, the X-axis still represents campaigns, but this time using

letters since the chart above and this one are not one-to-one. Some participants sharing viewability results did not share measurability results, resulting in a discrepancy in the total number of campaigns tracked.

Measured Rate
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
A B C D E F G H I J K L M N O 17.2% 14.4% 15.7% 12.6% 26.0% 34.1% 27.3% 16.1% 0.0% 2.8% 32.9% 62.9% 76.7% 68.5% 59.7%

Campaign

3.

Cross-domain iFrames presented a significant challenge to viewability measurement; they were the cause of the 73.1 percent of the unmeasured impressions in Network and 37.3 percent of unmeasured impressions in Publisher placements.

Unmeasured Impressions Percentage within Cross-Domain iFrames

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Network Placements % in iFrames % not in iFrames Publisher Placements 37.3% 73.1% 62.7% 26.9%

4.

Network placements in pilot programs generally had lower measured and viewable rates.

Network Placements vs. Publisher Placements

60% 50% 40% 32.1% 30% 20% 10% 0% Measured Rate Network Placement Viewable Rate Publisher Placement 18.9% 26.8% 55.2%

5.

Viewable rates in pilot programs varied by ad size.

Viewable Rates by Ad Unit Size

70% 60% 50% 40% 30% 19.8% 20% 10% 0.0% 0% 160x600 180x150 Network Placement 300x250 Publisher Placement 728x90 12.6% 49.0% 63.7% 58.8% 52.5% 40.0%

The number of impressions that could not be measured for viewability poses a significant problem. Across some campaigns, that figure exceeded the number of viewable and non-viewable impressions combined. Measured impression rates showed no similarities across campaigns and were very low in some cases. The majority of unmeasured impressions were the result of cross-domain iFrames, due to the viewable impression code being served through a different domain than the publishers site. If the domain of the iFrame is different from the domain of the page, the impression is not measurable. Network placements were affected more negatively by cross-domain iFrames than the publisher placements. Moreover, a portion of unmeasured impressions could not be attributed to any known fact. Other contributing factors to the unmeasurable served impressions were that not all viewable vendors met the 17 validation criteria,

or the viewable decision tags failed to fire. In addition to the problem of measurability, campaigns viewability rates varied greatly across campaigns, suggesting that strategies to maximize viewability have a long way to go. The pilot revealed the challenges ahead and underscored the need for further investigation before viewable impressions can become an accepted metric across the industry. Like all aspects of digital advertising, measuring viewability is a technical challenge that requires perfecting before marketers can accurately and confidently calculate the impressions that are truly viewable. In the case of not being able to measure served impressions 100 percent, the industry will need to come to a level of measurability that is at least projectable. Currently, there are too many unknowns to make informed projections. Measuring viewability is also an accountability challenge. Unfortunately, not all vendors participating in the pilot were able to meet the validation criteria. Maximizing viewability will not only require additional studies, but the assurance that viewability measurers are validated under and held to strict guidelines. As more served impressions can be measured for viewability, a fuller understanding of viewability rates and the finalization of an industry standard will be in closer reach.

Implications
This pilot program is just one phase of the overall evolution that 3MS is hoping to accomplish. The following are what we perceive to be the short and long-term implications of this pilot program on both the digital industry and the overall media landscape:

Near-term implications:
1. Key players will push adoption of viewability. Even before the agency pilot program wrapped, industry leaders in research and measurement has already begun to push usage of the new metric. For example, comScore is working with agencies on partnerships that incorporate viewability into campaign measurement, and AdSafe is also offering a viewability product. Even some publishers, such as ESPN, are experimenting with viewable currency models. As more credible vendors promote this concept, viewability will become a part of our industrys common vernacular. 2. Marketers will benefit from enhanced optimization and negotiation tools. For both brand and direct response-oriented campaigns, marketers will have new insight into their display investment. Brand advertisers who pay premium CPMs for high-quality inventory will be able to ensure that their investments are garnering strong ad view (and publishers will be able to adjust CPMs accordingly). The effects will be more palpable for direct response campaigns, where ad viewability proved to fall at lower percentages due to the relatively low viewability rates for networks as compared to premium publishers (32 vs. 55 percent). Media professionals would be well-served to compare their network viewability levels against their conversion-oriented results. If a correlation exists, this is something that can be used for strategic optimizations designed to enhance the efficiencies of the campaign. As less wasteful ad impressions are served, potential monetary savings on the ad serving front may be achieved, and ultimately less conversion overlap.

Long-term implications:
1. Ad technologies will evolve to allow for better measures of viewability. As noted above, one of the more unintended findings from the pilot program was the extreme gap in measurable vs. unmeasurable impressions. Since this is the basic foundation for widespread adoption of viewability standards, the IAB is working to resolve issues related to cross-domain iFrames that render viewability impossible. The solution currently under way is a safe iFrame, which the IAB intends to release on Nov. 5, and has already begun distributing to agency ad operations teams, including that of 360i. 2. The industry will migrate towards the digital GRP. According to the 3MS website, as early as November 2012, marketers should begin to see digital gross rating points (GRPs) take form beyond some initial experimented use by comScore (vGRP) and Nielsen (eGRP). The IAB predicts broad industry adoption by April 2013. This will only be possible with the adoption of a standardized viewable impression metric. 3. Publishers and agencies will begin to favor scarcity. An enormous positive outcome that will stem from this new way of thinking about ad impressions is that the industry will shift its current approach to the monetization of online real estate. A recent ClickZ article highlights an interesting notion that traditional advertisers are well accustomed to, which is that the finite universe of TV inventory is what commands its high CPMs. Conversely, the seemingly boundless display impression universe has translated to a system where online advertising has perhaps overmonetized its real estate, thus driving overall CPMs downwards. As marketers begin to press for a higher level of confirmed viewable ad impressions, we will ultimately de-emphasize waste and re-prioritize only the most valuable inventory. While the possibility of a more seamless integration of cross-channel metrics is a huge boon for marketers, its important to not overlook what just might be the most profound potential impact of a new viewability metric: how it may change the experience for consumers. As this industry matures, much like other mediums have had to do, there comes a time to reassess and perhaps un-think some of the bad habits developed over time for online advertising, this means cluttered web pages. Viewability has the potential to shift the entire way of thinking around how a website is designed and optimized for a positive ad experience. As a practical move forward, 360i will be actively incorporating measurement tools and technologies into media recommendations as appropriate for clients and will continue to monitor the space for any further outcomes stemming from this pilot program.

Next Steps
Our recommendations for some quick wins that marketers can take as far as incorporating viewability into their campaigns are as follows: Prioritize campaigns which are heavily direct response-oriented. These are the campaigns where the highest shortfall in viewability was evident. Partner with a research company who offers a viewable impression validation suite. Both RealVu and comScore are accredited by the MRC, and others have actively participated in the pilot indicating they are likely to follow.

Factor viewed impressions into optimizations. While it may be a longer road towards negotiating based on a paid viewed impression, marketers and agencies are in the drivers seat in terms of controlling campaign budgets.

About 360i
360i is an award-winning digital marketing agency that drives results for Fortune 500 marketers through insights, ideas and technologies. 360i helps its clients think differently about their online presence and evolve their strategies to take advantage of the new world of marketing communications one where brands and consumers engage in interactive and multi-directional conversations. In 2010, Ad Age named 360i to its prestigious Agency AList. Current clients include Kraft Foods, JCPenney, Coca-Cola, NBC Universal and Diageo, among others. For more information, please visit www.360i.com or follow us on Twitter @360i.

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