What is Cost Per View?
Cost Per View refers to the price an advertiser pays for every instance that their video ad gets played. This compensation model uses ad plays as a basis for gauging meaningful audience interest, promising advertisers better returns for their spending budgets.
As with Cost Per Completed View (CPCV), the model is meant to serve as an alternative to the established impressions-based models used in digital advertising. Since video ads are designed to run for longer than the usual one- or two-second criteria for impressions, this has been billed as both a more effective measure of audience interest and a more cost-efficient way of pricing video ads.
Google and the company TubeMogul first endorsed the cost per view model to the Interactive Advertising Bureau (IAB) in 2011. Since then, CPV usage has seen steady growth in the video advertising industry.
However, despite attempts at standardization by the IAB and other bodies, many important concepts like “views” remain highly subjective. This lack of agreement on definitions and measurement standards has continued to pose problems in the use of video advertising metrics, including cost-per-view models.
How Does Cost Per View Work?
Advertisers and publishers alike enjoy access to software and platforms that let them monitor how users respond to ads. In the case of video ads, publishers’ video players can typically receive and execute instructions to collect information like:
- Each time a user clicks on the “skip” button
- How much of the ad was on the user’s screen when it played
- How long the ad was allowed to play
This information can then be relayed to the advertisers who own the ad in question. That data can then be used to determine how much an advertiser owes a publisher based on pre-determined payment rates.