Cost per view (CPV) is a pricing model explicitly used for online video ads where marketers pay for a user’s view of their video. What counts as a “view” depends on the platform, as each has different means of engaging with users. For example, Google considers 30 seconds (or the duration of the video if the ad is shorter than 30 seconds) as a view, and so does YouTube for their skippable TrueView ads. Facebook and Instagram count three seconds for both in-stream and story ads, and TikTok counts two or six seconds as a view.
Although pricing structures and requirements vary by platform, CPV advertising includes a bidding process in which marketers can decide on the amount they are willing to pay for each view. Typically, marketers create a maximum bid amount for necessary keywords, depending on their target audience. Then, when users search for the specific keyword, every bidding that pertains to this word will be auctioned, with the highest paying ad shown on display.
The maximum amount to bid varies on a business’s needs and goals. Some factors that marketers should consider before setting their maximum bid are target audience, how likely users are to watch the videos, the marketing goals, and budget. Videos with a higher maximum bid will gain more exposure and views but will also be costly.
CPV advertising ensures that marketers do not incur unnecessary losses paying for every single user, some of whom may be irrelevant. Since marketers only have to pay when a user fulfills the viewing process of their video ads, CPV is a cost-effective model that allows marketers to invest in active users only. In order for a view to occur, users deliberately need to give their time and attention to watching a video, which is an indicator that they are interested. Hence, with the CPV model, marketers can determine their ideal users and how their ads are performing. The higher the CPV spend, the higher the views and vice versa.
Cost per view (CPV) = (Total advertising cost)/(Total number of views)
For example, if you spent $5,000 on video advertising and reach 10,000 views, your CPV would come down to:
$5,000/10,000 = $0.5 per view
A good CPV is when the cost does not go over budget and is helping your videos gain the necessary exposure. In order to reach the optimal level, make sure to:
Make sure you bid on keywords that are relevant to your ad and target audience. By determining what keywords will most effectively help you reach your target audience, you can get your money’s worth from advertising as well as reach your marketing goals.
Just like other ads, video ads need to be catchy and to the point, with accessible call-to-action elements that users can conveniently engage with. These videos also need to be channeled in the right format on the right platforms based on your target audience and ad creative.
CPV alone is not sufficient enough to give you the full picture. Incorporate other metrics such as CPCV, CPM, CPI, and CPA depending on what your campaign is measuring to get a better overview of your ad performance. Data from these pricing models will help you better understand user behavior and establish best practices for future ad campaigns.
