Just a few months ago, the traditional ad model was served a shakeup when the Financial Times announced they’d be rolling out new ad rates based on time and attention versus impressions. This is just one in a series of interesting new — and interrelated — tactics that media sites are taking to diversify their revenue streams from adopting publisher analytics platforms like Parse.ly to monetizing reader intent data via adtech providers.
This particular model is being called CPH or cost-per-hour, and for retail marketers it presents an interesting new reality. I’m sure many would agree that they’d far rather work in a world where ad rates were based on how long they appear in front of target audiences than anything else, but with any new metric can come some institutional changes and an education curve. Ultimately, what matters today is how you get people on-site, keep them there and keep them coming back.
1. First party data — long valuable — will become even more so. To compete with publishers that have larger audiences, the Financial Times will now lean on data that it collects firsthand to do a better job slicing up its audience for advertisers. Your own information about your customers is the primary data stream that you should be concerned with. Understanding what they do and when they do it is your ticket to capitalizing on the CPH shift. Success is no longer a story of mass user acquisition and site traffic volume; it’s a story of quality audiences and brand loyalty. CPH marks a clear shift from mass acquisition to smart acquisition, which along with it comes stronger retention rates.
Advertisement
2. Personalization will be recognized as the largest revenue driver. With the prioritization of metrics including depth of session, page views and time on site, personalization will finally get to publicly flex its muscles as a generator of serious revenue. The Financial Times said they will start the clock when at least 50% of an ad is on screen for five seconds. The way to get people to stay on-site long enough will be based on content relevancy, quality and consistency. That will come through automated personalization and audience insights at scale; that’s the best way to drive revenue from loyal audiences. I define loyal audiences as those who click through to the site from email, social and across all devices. Retailers who truly understand personalization will start asking questions around a publisher’s technology, not just demographics.
3. Data depth and quality will take on a whole new meaning. As brand marketers, you want to attach yourself to something legitimately reportable. Time is tangible. To that end, data delivered to marketers will have to be much more thoughtfully deciphered, cross-checked and delivered in the post-CPH world. With a finite resource, it’s difficult to hide discrepancies. While page views equal revenue, the impression isn’t the end-all be-all. Depth of information on individual users and session time are both more measurable and more bankable than traditional CPMs. Don’t hold back when it comes to asking for more intelligence in exchange for your marketing dollars.
Questions certainly remain even six months on from the initial announcement of CPH. While great for brand marketers, what about direct response? What’s the impact to conversion and click-through rate based on how long the ad shows? How much more valuable to a brand are the users acquired through CPH vs. CPM or CPC models?
Yet, if every publisher believes their audience is unique, then CPH will thrive in the months and years ahead. I believe CPH is just one of many approaches that will be setting the stage for the future of marketing budget allocation.
Innovation around advertising spend is increasing as more people ask “why” when it comes to historic workflows, faulty metrics and disproven costs and more importantly, “how” can they use their entire data set to bring in better, more valuable customers.
Neil Capel’s successful track record of working on large-scale, high-demand web systems led him to develop Sailthru’s unique, customer interest-based automation and personalization capabilities. Prior to Founding Sailthru and acting as CEO, Capel was the Chief Technology Officer for MusicNation, an AlleyCorp company, ASmallWorld, and Money-Media (acquired by Financial Times). Today, Capelalso is an advisor to several startups, including Refinery29.com and Zootoo.com, and a Venture Partner at Bowery Capital, a seed stage venture fund focused on transformational upgrades to enterprise technologies. Capelalso was named to The Silicon Alley 100 in 2011, 2012 and 2014 as one of New York City’s most influential and coolest technology leaders.
