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Cost Per View (CPV)

Cost Per View (CPV)Cost Per View in English refers to a relatively recent billing model in Online Marketing, Social Media Marketing, and Video Marketing. The basic idea of Cost per View is for the user to interact with the advertising media. By selecting this model, the seller pays for the actual visual contacts that are caused by requesting an advertising medium on the publisher's platform.

This principle must be distinguished from impression-based campaignsAs a user action, such as clicking Play, Skip, or Expand on a video ad, is required before the advertiser's ad budget is charged. Therefore, cost per view is equivalent to models that are based on the cost per action principle and are part of performance marketing.

General information

TubeMogul and Google suggested the cost-per-view metric at the IAB (Interactive Advertising Bureau), responsible for the standardization of digital marketing in the United States. This happened at a time when the traffic and frequencies of use of platforms such as YouTube, Vimeo and Facebook continued to increase as a result of video ads. In 2010, the number of daily unique viewers increased by more than 30%, according to a Comscore study[1].

The problem that TubeMogul and Google were trying to solve was that billing models were not being developed further even though user behavior and technologies were changing rapidly. Apparently there were no reliable metrics to examine campaign performance in the context of video business promotion. As a general rule, the CPI (Cost per Impression) and the CPM (cost per thousand) derived from it were the most used billing models. There is, however, the disadvantage that no distinction can be made between the videos that are simply requested by users and those that are not. CPI and CPM also include data in which no user interaction has taken place.

If you are billed on a CPM basis, you won't know how many users have clicked on your video and you will end up paying users who haven't. This is one crucial disadvantage for performance-related business promotion. These factors make an effective cross-media comparison of different advertising possibilities difficult, since only impressions are counted, but the actual advertising effect is difficult to detect. The data does not clarify whether a video has been viewed by users and for how long.

How CPV is calculated

The cost per view value can be calculated like other metrics, but in most cases it is specified by the publisher. The common values are between 0.10 and 1.00 euros per video, which are often calculated by publishers based on the extent of the reproduction. Marketers need to review how much an ad video is worth to them and use these metrics to choose whether the cost per view meets their campaign requirements. The CPV is calculated by dividing the total costs of commercial promotion by the number of views.

CPV = costs / views

How does it work

The difference in cost per view to other billing models is the user's intention:[2] If users are willing to consume an ad, the acceptance rate is high and the risk of banner blindness is low. It is supposed to be more likely than user-initiated advertising content conveys brand messages. Despite everything, they can be differentiated from other methods such as pre-roll and auto-inserts, especially when the performance of a campaign is in the foreground.

CPV values allow a deeper insight into user engagement and are thus valuable data for marketers and publishers. This data also increases the transparency of the billing model and simplifies budgeting. After all, marketers only pay for video ads, which are in fact user-initiated. Despite everything, there are also limitations. Aspects like brand awareness and viral videos cannot be represented with CPV.[3] The long-term effects of branding campaigns cannot be assessed with CPV. At the same time, a user can watch a viral video without being interested in a particular brand. Formats that go beyond user click-through interaction are difficult to scale with cost per view metric.

Which marketers prefer for CPV depends on several factors. The effectiveness of online business promotion campaigns can only be verified in connection with predefined goals. In such cases, values such as CPI, CPM or cost per hour suggested by the Financial Times may be more appropriate.

Relevance for online marketing

Cost per view has played an important role in video content marketing for several years now. The interaction required by the user incorporates a certain amount of user engagement in the calculations. The resulting transparency in capturing and evaluating ad metrics enables marketers to have an accurate budget. The budget is set and you know immediately how many clicks it represents. Companies like Google, YouTube, and Facebook offer cost-per-view as an optional billing model. CPV values can also be partially biddable if the model is connected to the supplier's real-time bidding. As a general rule, publishers also provide their clients additional information and recommendations on possible billing models, allowing marketers to select a model that fits their campaign goals.

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