Definition: Cost-Per-Vew, or CPV, is a method of charging for video advertisements based on the number of views or interactions an ad receives. CPV advertising opportunities provide a platform for ecommerce merchants to connect with their relevant audience, making them a worthwhile consideration for brands looking to expand awareness.
The distinguishing feature that separates CPV from other bid-based advertising systems such as Cost-Per-Impression (CPM) is that it requires deliberate attention from the viewer receiving the video ad. In Google's AdWords system, the CPV cost is not charged unless the viewer either watches the ad for at least 30 seconds or directly interacts with it, such as clicking an embedded link. This makes CPV-based video advertising more affordable for marketers, as they are not charged for viewers who quickly click away from an ad out of disinterest.
The CPV method is generally associated with Google and their TrueView process for distributing YouTube-based advertisements, but other outlets such as Facebook have begun experimenting with similar plans.
Bids for CPV advertisements work in the same way as other pay-per-click (PPC) style marketing plans. A marketer creates "bids" within the advertising system for certain keywords being entered by searchers, which are often restricted further according to metrics such as the searcher's physical location. If more than one marketer has put in bids for that particular keyword\metric combination, the highest bid dictates which ad is displayed for the searcher.
Popular keywords and densely populated markets virtually always require higher bids, as there is more competition among marketers for those keywords. As such, prices for CPV ads can vary wildly based on a large number of factors on the searcher's end. Costs anywhere from around 3 cents to 30 cents per view are common, but that is only a broad estimate.
Within the Google TrueView system, there are two different ways of including ads in YouTube: In-Stream and In-Display.
In-Stream video advertisements are those which appear before or after other videos on YouTube, equivalent to commercial breaks on television. Viewers are forced to watch the first 5 seconds of the ad, then given the option to skip if they wish.
In-Display ads are videos which appear directly in YouTube or other Google search results and are presented as clickable choices alongside other videos.
Marketers are free to experiment with different format types with relative freedom, given the 30-second rule. They can try videos which are short, long, funny, serious, in-stream or in-display and still only pay for those which are engaging to the viewer. This gives marketers ample opportunity to try different approaches and find the most cost-effective options.
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