vCPM stands for "Viewable Cost per Thousand Impressions."
How do I calculate vCPM?
vCPM measures when an ad is counted as "viewable", which means 50 percent of an ad shows on screen for one second or longer for display ads, and two seconds or longer for video ads.
A simple calculation for vCPM = CPM / viewability rate.
Why is vCPM important to advertisers?
Higher viewability leads to higher CTRs (click-through-rates). As such, more viewable impressions will almost guarantee you higher prices at auctions. As highly viewable inventory brings higher CPMs it is important to look at your viewable CPM (vCPM) rather than viewability rates alone.
From an advertiser's perspective, review the below example of how viewability optimization leads to real results.
| Scenario One | Scenario Two |
Budget | $5,000 | $5,000 |
CPM | $5.00 | $4.00 |
Impressions | 1,000,000 | 1,250,000 |
Viewability % | 80% | 50% |
Viewable Impressions | 800,000 | 625,000 |
vCPM | $6.25 | $8.00 |
Estimated CTR | 0.25% | 0.15% |
Clicks | 2,500 | 1,875 |
CPC | $2.00 | $2.67 |
The advertiser who achieved 80% viewability paid a higher CPM and got less total impressions, but received more viewable impressions, resulting in a higher CTR, more clicks, and a lower CPC (cost per click) compared to the advertiser with 50% viewability. Whether the goal is to drive conversions or heighten awareness and ad recall, advertisers focused on viewability measurement are sure to achieve better results.