Not all impressions are created equal
April 6th, 2010 by Tim WintleWhen I first started dabbling in internet advertising (as a publisher, circa 1997), per-impression advertising was the norm. All displays were measured in CPM (Cost Per Mille – the price per 1,000 displays).
There was, however, some very flawed reasoning behind the assumption that that was a reasonable thing to pay by – for an advertiser, the concept of display CPM assumes that every thousand displays of an ad will bring you the same income.
Of course this is not true – showing an ad to 1,000 teenagers will get you a different response from showing your ad to 1,000 parents for example (which of those is better depends on what you are selling).
Less obvious differences exist as well – people are more likely to splurge on large items just after pay-day than half way through the month, and they are more likely to take anti-drinking advertisements seriously on a sunday morning.
Looking beyond the users that view the ads, the internet has changed a lot since the ninties. XHR became widespread at the change of the millenium, allowing “AJAX” websites where the browser doesn’t have to load a new page every time the user did something. Suddenly an entire visit to a website could be done on a single page, and the meaning of “display” got more blurred.
The Viral Ad Network works on a different level – publishers are paid (and advertisers pay) for some kind of interaction with the ad – which may be a video starting playing, a video ending, a clickthrough to a different site, a player reaching the second level in a game, or just about anything. This metric is more closely linked to the value a publisher brings to the advertiser – but there are still variations in how much each viewer is worth to the advertiser.
These differences are carried through in the price that’s actually paid for a viewer – and these prices vary with supply and demand.
Essentially, the more demand advertisers have for viewers on specific sites / from specific countries, the higher the price per viewer will be. Likewise, the more supply there is of similar sites, the lower the price per viewer will be.
The job of our syndication system is to create a market where these prices change efficiently with supply and demand – so publishers get paid as much as they should be, and so advertisers aren’t paying more than they should. We spend a lot of time doing mathematical modeling of how our software works to ensure it fills this role correctly, and we’re proud of the level to which it works.
