Despite the significant innovations that have taken place in online ads in the past several years, advertisers still largely rely on metrics like CPM and CPC to quantify their digital ad spend.

To a large extent, the use of these metrics makes sense. They are simple and for many channels, are reasonably meaningful. But that doesn't mean that there's no room for innovation.

Case in point: The Financial Times announced this week that it is using "cost per hour" (CPH) to help advertisers understand how their ad spend correlates to the elapsed time their ads are viewed.

Dominic Good, the Financial Times' advertising sales director, explained the value of this approach:

While CPM values every impression the same, CPH uses time to measure value. The FT has shown through extensive testing that brand familiarity and recollection among readers increases significantly the longer an ad is in view. Adverts seen for five seconds or more on FT.com show up to 50% higher brand recall and familiarity than ads that are visible for a shorter period of time.

Given the serious and long-standing concerns around display ad viewability, a metric that allows advertisers to measure how much user attention they're actually able to capture will probably be of some interest. In addition, the Financial Times suggests that optimization based on CPH can produce desirable results.

According to the company, "The FT has been able to use data insights to optimise its inventory towards high-performing time placements. It results in a reduction in inventory to serve a minimum of 10% more time, as compared to a CPM campaign of the same spend."

One size doesn't fit all

Will CPH catch on and gain broader adoption, or will the Financial Times' new metric be relegated to niche status? The answer is hard to predict. 

On one hand, CPH could be well suited to companies that are focused on branding. If advertisers find that CPH is indeed correlated with brand familiarity and recollection, factoring CPH into campaign performance evaluations would seem sensible.

On the other hand, for companies looking for their ads to drive immediate action, a campaign with a good CPH but poor CTR would probably still be considered a disappointment.

Ultimately, even if interesting new metrics don't catch on in a big way, they serve as a reminder to advertisers that there's no one metric by which success can be measured.

As advertisers have learned from advances in attribution, campaign performance is a complex subject and looking at campaigns from multiple angles using multiple measurements is usually a good idea.

Patricio Robles

Published 21 May, 2015 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (3)

Guy Hatton

Guy Hatton, Director at Clinic

This is a positive move towards a more considered way of measuring ad impact. The CPM model focusses on ad serving and has skewed the development of advertising away from creativity and true engagement.

over 2 years ago

Jacqueline Cohen

Jacqueline Cohen, Marketing and Communications Manager at Hoist Finance UK

I think this is really interesting but I still beleive there is a lack of commercial measure. Surely, for those who advertise to gain a sale, there should be a CPS (Cost per sale) where this is tracked and costed; average number of click throughs result in average number of sales. This could then evolve to cost of the latter based on the hour/time of day the advertising takes place and how long it remains online.

I have seen elements of this in affiliate marketing but rarely in advertising.

over 2 years ago

Mark Ralphs

Mark Ralphs, Managing partner at Good Rebels

There is a big assumption here. That an ad that is 'in view' is actually being viewed.

It is well know that we tend to blank out ads at the top and the side of pages unless they are really arresting. This is one of the reasons that Mid Page Units tend to perform better.

Sure, there might be a small percentage uplift in recollection but I don't see it improving affinity.

over 2 years ago

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