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Cost per view (CPV) is a pricing model in which an advertiser is charged for every view their video ad receives.
Unlike other bidding methods, such as cost per thousand (CPM), cost per view requires viewers to engage with an advertisement or spend a certain amount of time watching it. This is a welcome perk for advertisers. In the chance a campaign does not perform well and viewers immediately click out of an ad, the advertiser is not charged.
To create a cost-per-view ad, advertisers bid for an impression in the same manner as a pay-per-click ad: a marketer sets the maximum price they’re willing to pay for necessary keywords. Then, a bid is made for those keywords, and the highest bidder is awarded the ad space.
Popular keywords almost always require high bids, since there is more competition among advertisers for said keywords. Because of this, prices for CPV can fluctuate and vary greatly from one another. On average, though, 3 cents to 30 cents per view is common.
The cost per view formula is as follows: CPV = advertising cost/video views
The definition of a video view varies on the source. Google’s TrueView system for distributing YouTube-based advertisements is commonly used by advertisers. In this instance, Google defines a view as a viewer who interacts with or watches the first 30 seconds of a video ad. Twitter, on the other hand, defines a view as two seconds of watching with at least half of the video on-screen.
Other platforms have taken hold of this bidding model, too. TikTok, for instance, now offers CPV bidding, which is defined as a viewer who watches 6 seconds of a video longer than 30 seconds, the entirety of a video shorter than 30 seconds or an interaction with a video.
While cost per thousand (CPM) refers to the price of 1,000 ad impressions, CPV determines the price of a single view. Cost per impression can be applied to any type of advertisement, whereas CPV is used solely for video ads.
One way to offset the risk of getting a high CPV when targeting prospects is to make sure you have clearly defined your target audience. Simulmedia’s TV+® platform takes a data-first approach to gathering audience data that goes beyond the minimalistic basics of sex, age, location attributes. By looking at more and more specific identifiers, advertisers can create defined target audiences, and from there increase attribution by building look-alike audiences, which are audiences with similar potential to engage. That way, when you take your campaign to scale, you won’t have to settle for simply increasing frequency and potentially numbing users to your ads.