The Financial Times Just Introduced a New Digital Ad Currency, and It Could Change the Web for Good
The bitcoin of digital ad currencies is here, and it’s being brought to you by your favorite 127-year-old, salmon-colored newspaper.
Yesterday, the Financial Times formally announced that it will begin to sell ads based on a new currency: CPH, or “cost per hour.” Instead of selling ads per thousand impressions (CPM) or per click (CPC), as most in the industry still do, FT is betting that selling display based on time-spent with the ad in view will ultimately produce better results for both publisher and advertiser.
The move had been bubbling in its experimental stage for about a year now; the newspaper started trials for CPH back in 2014, working with 10 clients—including IBM, iShares, and BP—to test the new currency, ultimately driving over $1 million in incremental revenue in the process.
“CPH values quality content over quantity, or real reader engagement over clicks,” FT reasoned in the announcement post. “Time-based advertising is also a more efficient use of inventory: the FT has been able to use data insights to optimize its inventory towards high-performing time placements.”
According to the post, FT has found that time, rather than number of impressions, better serves most advertisers’ goals, citing “up to 50% higher brand recall and familiarity” for ads that are seen for five or more seconds on FT.com. FT says that CPH also “ensures 100% viewability of five seconds or more for clients.”
The transition to CPH also takes advantage of their time spent dominance in the business media sphere: According to Jon Slade, managing director of B2C for FT, the newspaper’s readers spends six times more time on the FT than on similar business sites.
The newspaper has been working closely with web analytics company Chartbeat to implement the currency and prove its effectiveness. The partnership makes sense: Chartbeat CEO Tony Haile has repeatedly articulated his contempt for the click. He, like FT, believes that time spent metrics can help provide the kind of sustainable media business model publishers have desperately been searching for since the transition to digital.
And he’s not alone. While FT and The Economist (which is 50 percent owned by FT) have been leading the charge, a 2014 study by Digital Content Next found that 80 percent of publishers are interested in selling ads based on time spent.
The movement towards monetizing time could be a turning point for struggling publishers—particularly those of the media old guard. After all, publications such as The Atlantic, The New York Times, and Financial Times are built to tell the kinds of important, longform stories that keep people engaged.
Clickbait headlines, “social” stories, pageview-baiting slideshows and other CPM-centric practices made popular by media brands like Bleacher Report and Business Insider, on the other hand, simply don’t fit as neatly into the CPH model.
But if these exploitative methods tell us anything, it’s that the CPM currency is flawed. A few key stats back this up as well: Only 47.6 percent of ads on desktop and 44.2 percent of ads on mobile meet the Interactive Advertising Bureau’s viewability standard of one second in-view, the average reader spends less than 15 seconds actively on a page, and many of these readers aren’t even human in the first place—in fact, one study by Solve Media estimated that bots would waste $11.6 billion in ad spend in 2014. Simply put, a lot of the money spent by advertisers is going to waste.
If FT has their way, the media industry will soon begin to adopt time spent metrics. According to their blog post, the newspaper is “already working with other global publishers to develop and increase the use of CPH, with the intention of making it a standard digital trading currency across the industry.”
Still, it’s worth noting that it will likely only be media companies with high-quality content—the kind that ensures readers will click and stay—that have any interest in the new currency.
And even if they are interested, the movement to CPH could be slow. The adoption of CPH requires an upheaval of a 20-year-old, deeply entrenched currency—think of it like bitcoin replacing the dollar, except on a smaller stage. FT had the advantage of a dedicated ad sales team and a reputation for high quality content and a high-end audience. For media companies reliant on programmatic or not as trusted as FT, however, the transition might prove difficult.
Whether time spent ends up dominating the media ad industry or not, here’s one result we all can hope for: no more slideshows.Image by khwanchai.s