Blog

Blog

qCPM-Blog Header

qCPM — Do we really need another marketing initialism? Maybe.

Posted Sep 4, 2019

The advertising industry has historically largely survived based on trust, where the agency and the vendor operate under an unspoken oath that they will do what is right for the client – and that they will be held accountable for anything that does not serve the client’s outcomes. But we are now in a bit of a crisis, in a time where the very measurements of that accountability cannot be trusted, and so transparency is the clarion call of the day. 

Advertising relies on standards, global metrics that we can all measure our performance against. But what happens when those metrics do not evolve to catch up with the current landscape? In an atmosphere rife with fraud, and where a CTR is a tenth of a percentage point (if you’re delivering a campaign well), it’s time advertisers started looking at another dimension of the advertising experience: quality. 

Some agencies are actually taking this idea of quality one step further, and calculating a new metric, one that takes into account what brands and agencies really care about: KPIs that map back to their specific goals and objectives. In a word, quality – but as defined by the client. 

The magical shorthand metric many agencies are now using as their internal standard is called the Quality Cost Per Mille or qCPM. It’s essentially the next idea of what some as far back in 2013 called the “viewable” CPM, a way to measure how frequently an ad is actually seen by a user and not merely the number of times it’s served by an ad server. 

However, qCPM differs in that it can incorporate more holistic criteria, including environment, targeted user and frequency. In other words, it also notes whether the viewable ad impressions are delivered optimally, to the right user, at the right time, and in a brand-safe environment.

qCPM is not, however, an industry standard, far from it but it is a clear indicator that the biggest names in the business are taking the idea of quality seriously, and that’s good, because consumers respond to different ad formats in different ways, and different advertisers have different objectives. CPM can only cover so much. 

Agencies that are using qCPM today each have their own interpretation, their own way of getting to that metric, which makes it less of a true metric, and more of a shorthand. See some of the ways that marketers just like you are DIY-ing their way to better measurement:

Validate campaign strategy

Is your campaign good enough? Post-campaign analysis is essential for understanding the performance of every campaign, and findings from those can and will inform future campaigns. But the traditional metrics that we see in most after-the-fact reporting don’t always tell the full story.

Essence, for instance, is using a log-level data approach to recalculate the CPM metric. They combine the log-level data from the ad server and data-management platform, along with event-level integrations from third-party viewability providers. Then the compounded metric is used to evaluate how the campaign performed. 

Increase effectiveness (not just efficiency)

Omnicom’s Hearts & Science has been using the same approach for five years now, and they now even use it in procurement, so clients can evaluate the agency not just for the prices it can secure, but for the quality of the inventory it buys.

It seems to be working, too. Because the impressions are ultimately more effective, clients are saving money, while seeing improved brand lift. Even many of their direct response clients are witnessing sales lifts when they move to the qCPM model. 

Avoid ad fraud  

And then there’s the fraud piece – looking at qCPM as a way to validate delivery. Programmatic has the stigma of having the potential to be lower-quality inventory (even after ads.txt and so forth), so evaluating it using qCPM criteria rules out all that is off-target, non-brand-safe, recorded but not viewable, etc. This levels the playing field and allows programmatic to be compared apples-to-apples with direct buys with a publisher. As a result, programmatic budgets can increase, as buyers find more value and ROI from that inventory. 

Optimize on delivery

And then there’s the real-time optimization factor. The German media agency Adlicious, for example, scores different ad units for their branding impact (e.g., a 300×250 that’s easy to ignore = .5, large desktop billboard with more brand impact = 4.5). This score is then multiplied by the CPM, as well as by the percentage of viewable ads and those that hit the optimal exposure frequency. The qCPM is then fed into the client’s DSP in near real-time, which allows for optimization toward the metric during the flight. This level of sophistication is what everyone is digital should be doing, but it’s also arbitrary in its own way.

Incentivize your partners to go above and beyond

It goes without saying that qCPM is highly subjective – it’s really just about which KPIs and outcomes are important to the advertiser. But isn’t that the kind of advertising world we want to live in? Where “quality” is a term that is 100% determined by the client, as the standard that meets their specific goals and objectives? 

How do we get there though? You can use 3rd parties like viewability partners to be the voice of truth – to support the first pillar of transparency and at least part of the “quality” end goal, but ultimately, it’s on the brand to realign incentives and encourage your agency partners to procure ads that aren’t just low cost, but high quality. Quality as you define it, not them. 

Join the Conversation 
Do you use qCPM? Tell us by tweeting @AdColony. For the latest AdColony mobile news and updates, follow @AdColony on Twitter, like us on Facebook, or connect on Linkedin.

Jonathan

An avid electronic entertainment connoisseur and huge pop-culture nerd. Jonathan uses his Swiss Army Knife of skills as AdColony's head of marketing and Senior Director — Global Marketing & Communications.
Jonathan

Latest at AdColony