Viewability and Advertising Effectiveness
Answers from Işın Acun
What’s your project about?
My research is about online advertising effectiveness. 50% of global ad spend goes towards online advertising, which is why it’s crucial to understand what drives its effectiveness.
What’s the research problem?
Many online ads are never visible to users, although they count as ad impressions, leading advertisers to waste money on unseen ads. To overcome this issue, the IAB created a viewability standard. It states that 50% of an ad needs to be in view for at least one continuous second, such that it counts as viewable. This standard was the outcome of a political process, rather than being based on empirical evidence.
Which solution does your paper bring to the problem?
We thus study how ad viewability (as defined by the IAB) affects advertising effectiveness for different types of websites.
We argue that ad viewability is more important for websites that users explore (e.g., browse a homepage), rather than visit to fulfill a specific goal (e.g., checking their email). In case they visit the website to fulfill a specific goal, they are anyway not receptive to ads, such that it does not make a difference for ad effectiveness whether the ad is viewable or not. Yet, for websites that users visit to browse and explore content, ad viewability will play a greater role and the ad being viewable should make a difference in ad effectiveness.
How did you study this?
To study this question, we use rich observational data from a company partner. The data covers different types of websites (goal vs browsing-oriented) and includes ad impressions, their viewability, and whether the ad impressions eventually led to a visit to the advertiser’s website or not.
What did you find?
We indeed find that ad viewability is more important for websites that users explore (e.g., browse a homepage), rather than a visit to fulfill a specific goal (e.g., checking their email). In case they visit the website to fulfill a specific goal, it does not make a difference for ad effectiveness whether the ad is viewable or not. For websites that users visit to browse and explore content, the ad being viewable does make a difference in ad effectiveness.
What can practitioners learn from these results?
First, advertisers should consider paying more for viewable ad impressions when the ad appears on a browsing-oriented website. On goal-oriented websites, it might even make sense to not advertise at all, given our findings. Second, browsing-oriented websites should make sure that ad viewability is high, as advertisers may see higher ad effectiveness when their ads are more viewable. Third, they can also charge higher CPM for those ad impressions because advertisers see a higher “return” from them. Fourth, goal-oriented websites might want to rethink what type of ads they offer on their websites, as users are there to fulfill a specific goal and are less receptive to (display) ads in general.
Get in touch with Isin ACUN to learn more about the project!