vCPM in Digital Marketing – How It Works and How You Can Profit from Using It

vCPM in Digital Marketing - How It Works and How You Can Profit from Using It

You’ve probably heard about Cost per Mille (CPM) and Viewable Cost per Mille (vCPM) pricing models, and you surely know a lot about them. However, if you wish to learn more about different types of pricing models, especially CPM, then we encourage you to read our other post that you can find here. Today in this post we will focus specifically on viewable ad impressions to help you understand how to deal with native campaigns when targeting the ad exchanges supporting vCPM. 

So let’s not waste time any more and let’s start!


vCPM Meaning & Formula

vCPM is an acronym for Viewable Cost per Mille which we easily translate to cost per one thousand viewable impressions. It shows how often the Ad is viewed by a website visitor. It means that the advertiser pays only for viewed impressions.

The Viewable impressions measurement is a more accurate key performance indicator (KPI) for campaign performance as the advertiser will not have to pay for ads that are merely placed on the website (and not viewed), but potentially not even visible for users.

There are few ways to make vCPM calculation – choose the one that is most suitable for you!

Viewable CPM = CPM x Total Impressions / Number of Viewable Impressions

Viewable CPM = 1000 x Spend on Campaign / Number of Viewable Impressions

Viewable CPM = CPM / Percentage of Viewable Impressions

vCPM Meaning & Formula

When Can Users See My Ad? 

To make sure that users will actually see your ad, you should think about where it is positioned. For example, if it is placed on the top or on the bottom of the page, the user might skip it simply by scrolling the page up/down. That is why MCR (Media Rating Council) came up with standards for publishers, which help to observe whether the Ad was viewed or not. To consider that an ad was viewed:

  • Minimum 50% of the advertisement needs to appear on the user’s screen for more than 1 second for display ads. 
  • Minimum 50% of pixels need to display on the user’s screen for more than 2 seconds for in-stream video ads. 
  • Minimum 30% of the advertisement needs to appear on the user’s screen for more than 1 second for large ads.

When it comes to native advertising, it may vary depending on the network and how they define viewable impressions. The International Advertising Bureau (IAB) considers an ad viewed when at least 50% of it appears on the screen for at least 1 second.

When can users see my ad? 

vCPM vs CPM

CPM and vCPM are both advertiser-side metrics that we use to calculate the amount a client spends on an ad campaign. While running on the CPM model, you pay for all ads that are placed on the webpage, with no guarantee that they have been seen by the website visitors. Meanwhile, while bidding for vCPM, you pay only for the ads that have appeared on the user’s screen for a specific amount of time. You need to remember that users might not scroll through whole pages and this is why they can’t see all ads that are present there.

As we mentioned before, whether your ad was visible or not is connected with the positioning of your ad unit on the website, which is mainly in the center of the page in the case of vCPM. If your ad is displayed in a spot with poor viewability users may not see your ad at all. 

vCPM vs CPM

For example, right above the fold position is considered the most viewable area for an ad. However, a lot of users may scroll the page down too quickly to see the ad. If positioned below the fold, ad visibility will decrease even more, because users may not scroll the page enough to see it. 

Numbers don’t lie: as per a study from Google, the median viewability for Above the fold ads is 68% and approximately 40% for Below the fold. For this reason, you should aim at the ad spots above the fold.

vCPM vs CPM

Ad exchanges that support viewable ad impressions benefit advertisers by:

  • Reducing money waste as the advertisers are charged only for impressions that are viewed by the website visitors.
  • Strengthening trust between advertisers and publishers.
  • Making websites load faster by decreasing the number of low-performing ads at the bottom of the page.
  • Boosting overall ad performance for advertisers.
  • Tracking ads which encourage more viewership & engagement. Thanks to this, the advertiser receives more accurate information on the number of actual ad clicks (visits) generated by an ad with the guarantee that an ad is visible by the website visitor. The collected data is highly actionable and offers suggestions to  enhance campaign performance.

vCPM Bidding And Campaign’s Optimisation Tips For Advertisers

While working with the ad exchanges that support vCPM you bid on 1000 viewable impressions and you pay only for impressions that are measured as viewable. This requires a different approach to campaign optimization. Check what you should do to get the best results!

  • You should optimize your bids to increase the viewability of your campaign. Adjust your bids by analyzing the campaign’s view rate and comparing it to the win rate.
  • Your bid for vCPM should be higher than a bid for a standard CPM if you want to keep the traffic and costs on the same level. 
  • Pay attention to your ad placements report to ensure that your ad is not running on unwanted placements (Widgets/Ad Space IDs). 
  • Do not target a small audience, as vCPM strategy should focus on maximum number of viewable impressions. Otherwise, people might get annoyed by seeing your advertisement too often. You can also choose how many times your ad will be shown to a specific user with frequency capping settings.

Understanding View Rate & Win Rate on Examples

We’ve outlined two scenarios to help you understand the relationship between vCPM and your campaign metrics available in the Voluum DSP reporting.

Scenario 1: Understanding metrics in relation to ad exchanges that support viewable CPM

View rate measures the ratio of the actual number of impressions won and shown to the website visitor to the total number of impressions bid on (total bids), and expresses it in a percentage.

View rate = (Impressions* / Total bids**) x 100%

*Impressions – the actual number of ad views by a website visitor

** Total bids – a number showing how many times your campaign takes part (bids) in the global auction

Win Rate measures the ratio of the number of auctions won (wins) to the number of impressions bid (total bids), and expresses it in a percentage.

Win Rate = (Wins* / Total Bids ) x 100%

* Wins – the number of global auctions won, which means that the ad was rendered in the ad widget, but at this stage, it does not necessarily mean that the ad was viewed by the website visitor.

View Rate & Win Rate

This is how you can utilize this data in practice: 

  • Check the campaign’s reporting by comparing the values ​​in the Win Rate and View Rate columns. If the View Rate shows a rather high percentage and the Win Rate relatively low value, then it may be necessary to increase a bid on a given ad placement in order to get more valuable traffic.
  • Delve into the data to decide which Widgets/Ad Space IDs are more likely to become viewable. This way, you will see where you should place an adequate higher custom bid to have a better chance of getting more traffic from the chosen placements. Make some manual adjustments by pausing ad placements with poor viewability. Ad placements with high potential can be added to your whitelist and used in different campaigns as well.
  • To keep your ad spend and amount of received traffic at the same level as a CPM campaign, your bid for a viewable CPM campaign might need to be higher than your bid for a standard CPM campaign. Keep in mind that it’s necessary to experiment with a bid to get the most optimal vCPM bid strategy which works best for your campaign.
  • Win rate shows how good your bid is and can be improved by changing your CPM. There is no point in increasing the price if your Win Rate is 80% or higher. If you want to try to get more Wins you can do so by increasing your bid slowly to avoid overspending on this particular ad placement.
  • Be aware that reaching 100% of the Win Rate is almost impossible. Usually, website owners allocate part of the traffic to direct sales. Traffic limitations can also be caused by technical obstacles like timeouts. That’s why there will always be some percentage of the traffic that simply cannot be won.
  • View rate is hard to improve as it depends more on the actual place of the ad on the website than your bid.

Scenario 2: Understanding metrics in relation to ad exchanges that DO NOT support viewable CPM

View rate is the percentage that measures the number of Impressions (Wins) won, divided by the number of impressions bid (Total bids). View Rate shows the same values as Win Rate.

View rate = (Impressions* / Total bids)*100%

*Impressions – show how many times your ad has beaten the competition and won a global auction for the chance to have a consumer view your ad. It does not necessarily mean that the ad was viewed by the website visitor, so in this case, Impressions are the same as Wins.

Win Rate

vCPM in Voluum DSP 

In Voluum DSP, viewable ad impressions (vCPM) ONLY applies to the following ad exchanges: 

  • MGID General, 
  • MGID Pre-approval, 
  • Smaato, 
  • Smaato Newsbreak, 
  • Improve Digital, 
  • Adnow, 
  • Passendo, 
  • Opera,
  • Taboola.

It is important to keep this in mind when selecting the traffic source that you plan to target. It will allow you to react appropriately to the data in a campaign’s reporting and to optimize the results in a cost-effective way.

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Final Remarks

Hopefully this article left zero doubt as to why it is so important to distinguish between metrics in the case of targeting ad exchanges supporting CPM or vCPM. 

Remember that vCPM is one metric amongst many others that can help you in measuring your campaigns’ performance. It can definitely help to optimize your budget. So take a closer look! 

Voluum DSP released more metrics in reporting recently to facilitate campaign optimisation. Thanks to this, you now have access to data such as View Rate, Win Rate, Wins and Impressions. You should use these metrics on a daily basis as it gives you better bid and optimization control!  To find out more check out our documentation.

So don’t hesitate any longer. Join the DSP family and start optimizing your native campaigns like a pro. 

Join Voluum DSP FOR FREE today!

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