Point of View: Programmatic Ad Viewability in China

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1 Presents Point of View: Programmatic Ad Viewability in China Market First Industry Benchmark and Analysis Powered by

2 Introduction In digital advertising, many marketers and agencies assume that ads are always visible and therefore viewed by the audience. It has been believed that when an ad is viewed, the audience is more likely to interact with the ad from clicking the ad to reading more about the product and making a purchase. This belief leads marketers to pay for every single ad exposure, although each ad exposure does not necessarily mean a viewable impression. The definition and measurement of viewable impressions has been standardized in more developed markets, such as US, UK and Australia, where marketers are more sophisticated in measurement and programmatic trading is more widely adopted. In 2014, MRC (Media Rating Council) collaborated with IAB (Interactive Advertising Bureau) and developed industry-wide guidelines on viewability measurement. (Read more: MRC Viewable Ad Impression Measurement Guidelines, IAB State of Viewability Transaction 2015) While China is enjoying rapid growth and evolution in programmatic trading in the past 4 years, many marketers are still seeking confidence in this field because of three concerns: Inventory quality: Is programmatic advertising effective because real-time bidding (RTB) buying method involves long-tail inventory? Adoption best practices: How can I adopt programmatic trading in China which seems to be a less transparent market? Trust and integrity: How can viewability measurement help programmatic trading become more mature and credible? In this article, Accuen aims to address these concerns by the following: Initiate China s first programmatic ad viewability benchmark and compare to regular buy Re-look at effectiveness in creative response between programmatic and regular buy Propose directions for marketers to adopt programmatic trading in China Predict how viewability will influence China s programmatic trading and the ecosystem 2

3 Methodology For this initiative, Accuen works with Sizmek as the viewability measurement partner to leverage their technology solution aligned to MRC definition and standard of viewability. From September to November, programmatic ad campaigns representing three different industries (IT, cosmetics and automobile) were tracked by Sizmek on media delivery over a month and viewability on PC standard display banner bought on open exchange via real-time bidding buy (RTB) model. In this experiment, the mechanism of impression tracking is explained as follows: DO YOU KNOW? Viewability MRC guidance addresses viewability on PC browser environment currently. Definition remains consistent regardless of buying method (i.e. direct or programmatic). PC display Of all measured impressions, the percentage of impressions with 50% of display ad in view for at least 1 second Viewability rate is the ratio of viewable impressions to measured impressions. There are limitations in this experiment however: MRC guidance in viewability only applies to PC browser. Mobile programmatic campaign in mobile app environment is excluded in viewability measurement Among all PC display ad placements in each campaign, only top ad placements (by inventory volume) were tracked for viewability PC video Of all measured impressions, the percentage of impressions with 50% of video ad in view for a minimum of 2 seconds 3

4 Programmatic Advertising Effects on Viewability and Creative Response Many marketers in China see programmatic trading as buying low quality of media inventory and hence are reluctant to adopt this new media buying methodology. Our market-first analysis on viewability and what it means to programmatic trading may bust the myth about buying inventory of low quality. 54% PC Programmatic Ad Viewability in China is Comparable to Worldwide Benchmarks From our experiment of measuring viewable impressions in RTB campaigns across three industries, an average viewability of 54% was seen. To assess the credibility of 54% as the initial PC programmatic ad viewability benchmark in China, we looked into global benchmark studies from Google and Sizmek based on programmatic and regular buys combined. (Both companies use IAB standard for PC display viewability) In November 2014, Google reported US benchmark of 50% (source: The Importance of Being Seen by Google) In October 2015, Sizmek reported worldwide benchmark of 51% (source: Viewability Benchmarks by Sizmek) In the same Sizmek report, North America and Asia Pacific saw respectively 49% and 53% as regional viewability benchmarks In comparison to worldwide benchmarks, 54% viewability of PC programmatic ads in China is believable. As a move to lead the programmatic industry in this market, we therefore propose to set the first industry benchmark of PC programmatic ad viewability in China as 54%. 4

5 Within China, Inventory of Open Exchange is 28% More Viewable than Inventory of Direct Buy Considering 54% is the PC programmatic ad viewability benchmark in China, our next step was to compare against viewability of regular buy. Sizmek s China viewability report reported 42% as the viewability benchmark of direct buy. This figure derived from analyzing 8 billion measured impressions of standard PC display banners (across four placements skyscraper, top, middle and bottom banners) covering 20% of digital media page views on mainstream portals, video sites, lifestyle sites and finance news sites. (Source: Viewability The First Step to Evaluate User Interaction by Sizmek) Results from Sizmek s study are believed to be representative and also the only China regular buy benchmark we have observed at the time of writing. When comparing to inventory of regular buy, inventory bought on open exchange achieved 28% higher viewability. When programmatic ads are 28% more likely to be seen than regular ads, it evidently shows that: Inventory on open exchange may be long-tail media inventory but it has better viewable value because programmatic ads are delivered to the right audience at the right time and offers realtime optimization to maximize performance Regular buy may offer premium media inventory and is believed to be viewed by audience, but inventory quality depends on the deal agreed between publisher and marketer and has minimal room for real-time optimization This finding is not only a breakthrough in programmatic industry, but also a compelling reason for brand marketers to include programmatic ads into brand awareness activity. 5

6 Creative Response in Click through Rate (CTR) Can Increase 20% With Above-average Viewability Having proved the viewable value in programmatic, we now want to use click through rate (CTR) to evaluate effectiveness in creative response. For measurement consistency purpose, all three programmatic campaigns were evaluated by CTR, regardless of final campaign objective. Also, CTR in this analysis takes measured impressions into account (i.e. not all delivered impressions) and we used viewability rate of each individual campaign as the baseline and indexed CTR above and below that baseline. We found that, by individual campaign, CTR increment from below-average viewability to above-average viewability varies from 13% to 56%, or 20% on average. Influencing factors include (but not limited to) audience, frequency, targeting tactics, creative assets and ad placement. Among these factors and based on the availability of data, we looked into how ad placement may play a role to influence viewability and CTR. Positive correlation can be seen that, in one campaign setting, higher viewability yields higher CTR. These high-performing ad placements were 300x250 and 250x250, which are usually placed closely adjacent to webpage content to bring as much relevancy as possible. 6

7 How to Adopt Programmatic Trading In Light of Viewability For marketers that have been investing in programmatic ads, they are eager to apply best practices of viewability to improve operational efficiency. In particular, brand marketers with awareness and engagement goals may see more benefits from measuring and optimizing towards viewable impressions than sales driven marketers. However, programmatic trading is a fluid process and therefore programmatic tactics can influence viewability outcome. How Programmatic Tactics can Lead to Different Viewability Outcomes When campaigns are set up differently (different audiences, different tactics), various levels of viewability can be yielded. Scenario 1 Target audience of clients A and B were rather broad, but their different viewability result could be due to the tactics used. Client A using a tactic mix of contextual targeting and run of category likely drove more relevancy by delivering display banner adjacent to the related content. Therefore, a 52% higher programmatic ad viewability was seen in client A. Scenario 2 Whitelist tactic is highly regarded among marketers because they believe that this tactic ensures ads served on desired media list and hence achieves superior viewability. Client C using whitelist tactic achieved just a moderate 13% above the benchmark however. Client Viewability Index (index 100=54%) A 152 B 98 C 113 Audience Geared towards female with fashion and skincare interests Geared towards people with 3C and gaming interests Geared towards male with car racing, sports and outdoor activity interests Key Tactic Run of media category Contextual targeting Run of media category Whitelist 7

8 Strategic Best Practice: Directions to Take Programmatic Trading to Next Level with Viewability There is an increasing an increasing number of industry publications about viewability, such as Google US s 5 Factors of Viewability. However, many publications talk about tactics from executional perspective. To embrace viewability into programmatic trading, we recommend the following strategic approaches for marketers and agencies in China: Marketers add ad viewability into brand effectiveness measurement Agencies and agency trading desks use viewability metric to optimize programmatic campaigns, for instance, removing ad placement with low viewability Agencies and agency trading desks develop, apply and benchmark CPvM (cost per viewable thousand impressions) to evaluate effectiveness and efficiency of media investment Tactical Best Practice: Trial-and-error Approach on Programmatic Tactics to Maximize Viewability As part of annual or quarterly planning, marketers and agencies together may exploit a testing scheme with one or more of the following dimensions to deliver programmatic ad viewability: Buying model (open exchange RTB, private marketplace, programmatic direct buy) Audience (1st party, 2nd party, 3rd party) Affinity of media category Interactivity of creative assets (flash, interactive e.g. HTML 5, rich media) Ad size and placement Page position (above the fold, below the fold) Targeting tactics (run of category, contextual targeting, behavioral targeting, retargeting, whitelist, look-alike modeling, dynamic creative) Silver bullet of high viewability achievement is yet to come. Marketers and agencies are advised to adopt a test-and-learn attitude when exploring the right formula in programmatic ad viewability. 8

9 How Viewability Will Influence Programmatic Trading in 2016 Having conducted the first viewability study in the context of programmatic buying in China, although we still see challenges that need to be further addressed in the future, viewability is certainly steering programmatic trading to a deeper level in China. We believe many opportunities will arise and marketers and agencies will experience a more mature programmatic ecosystem in China. In 2016, we predict three areas of programmatic trading ecosystem being influenced by viewability: Marketers Marketers should have a sound measurement strategy in place to define marketing success. We reckon the following steps to be taken to enhance the existing measurement framework: Add viewability rate and CPvM as key metrics onto scorecard Iterate measuring viewability and CPvM measurement to observe trending over time and define a benchmark Explore the extension to video and mobile ads via a systematic test approach Agencies and Agency Trading Desks Agencies and agency trading desks will strengthen programmatic trading practice and operation to a more sophisticated level, as follows: Apply CPvM as trading currency or viewable impressions for billing purpose (however, the latter approach is subject to vendors acceptance) Integrate trading desk platform and 3rd party viewability solution provider to enable viewability as a standard option for programmatic trading and optimization Consider the use of private marketplace (private auction) programmatic buying model to increase the affinity of media and hence increase viewability outcome 9

10 Media Publishers A healthy and trustworthy programmatic marketplace cannot be achieved only by marketers and agencies desires. Support from the entire ecosystem, especially publishers, is equally important to put viewability into action: Redesign publishers websites to have more ads in view and/or even guarantee viewable placements Open up more inventory for programmatic trading Conclusion A mature programmatic marketplace in China has a long way to go, but the measurement and application of viewability in programmatic trading will take marketers and agencies one step closer. Marketers will begin to measure viewability and analyze the relationship between viewability and CTR to evaluate brand effectiveness at a granular level. Agencies and agency trading desks will integrate viewability in programmatic trading and optimization for a more comprehensive view. Our finding of PC programmatic ad viewability benchmark in China is only the first step. With more marketers, agencies and agency trading desks and publishers entering the horizon of programmatic trading, we hope that our discovery will inspire deeper acceptance, adoption and standardization of viewability in China s programmatic ecosystem. 10

11 Further Reading MRC Viewable Ad Impression Measurement Guidelines IAB State of Viewability Transaction The Importance of Being Seen Viewability Benchmarks Viewability The First Step to Evaluate User Interaction 5 Factors of Viewability 11

12 About Us Accuen Accuen is Omnicom Media Group s programmatic agency, operating the industry s first open and flexible platform for programmatic media buying for the world s leading marketers. With specialists in 60 countries, Accuen delivers market-leading solutions across channels, transforming data into competitive media advantage. Accuen is a division of Omnicom Media Group, the media services division of Omnicom Group Inc. Omnicom Media Group and Omnicom Omnicom Media Group is the media services division of Omnicom Group, Inc. (NYSE: OMC). Omnicom Media Group is made up of several media specialist companies. Among them is OMD Worldwide ( the largest and most innovative media communications specialists in the world, and PHD Network ( a leading media services company widely recognized for its pioneering and innovative work for clients. Sizmek Sizmek, formerly known as Eyeblaster and MediaMind, is the world's largest independent third party ad server working with over 3,400 agencies, over 17,000 brand advertisers and 22,000 global web publishers, serving ads in 70 countries. An Open Ad Management company, Sizmek gives online advertisers, agencies and publishers in China full end-to-end capabilities in the areas of programmatic solutions, verification powered by Peer39, dynamic creative optimizations, data & attribution services across multiple devices/channels and enabled via ad serving technology. With 10 years of China experience and a global network, marketers & partners have in the past and continue to benefit from best-in-class online advertising tools, technology and strategic guidance as Sizmek continues to evolve in an ever-changing China digital landscape. That s the Sizmek effect. For more information, please visit 12

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