Cost per view, or CPV for short, is a term used in the field of video advertising. CPV stands for a billing model that is primarily used in social media marketing and video marketing.
Similar to CPO (cost per order) or CPC (cost per click), this purchasing model requires a specific action by users in order for it to be counted. This means that with the CPV model, advertisers only pay for the actual visual contact with an ad. These “visual contacts” occur when users voluntarily open an ad, such as a video. The fact that a video only appears when scrolling through the feed or timeline on Facebook is not counted as an action.
The willingness to consume advertising is a key advantage of the cost-per-view purchase model, as the risk of “banner blindness” is relatively low. Ads that users do not find interesting are highly unlikely to be clicked on and therefore not billed according to the CPV model.
CPV for video displays
Cost per view is often used for video ads. Here, a click on options such as “Play”, “Skip” or “Expand” can be counted as a view. However, it is important to distinguish the CPV buying model from impression-based campaigns such as cost per impression (CPI), as CPV requires action from users and not just mere viewing. The advantage of CPV is that advertisers can differentiate between people who have watched a video and those who have not. As a publisher, you get a more detailed insight into user intent, i.e. engagement, which in turn provides a valuable database. This is a decisive advantage for performance-based campaigns to measure advertising impact.
Another advantage of CPV is that the data offers more transparency and the budget can therefore be better calculated. After all, payment is only made for video ads that were triggered directly by users.
Disadvantages of the cost-per-view method
Unfortunately, there are also disadvantages to the cost-per-view approach. For example, in the case of viral videos, where users watch the video to the end and advertisers are asked to pay according to the CPV model. However, this does not necessarily mean that users are interested in the products, services or brands advertised in the video.
CPV is also not the ideal model for campaign objectives such as brand awareness through branding campaigns, as the long-term effects cannot be evaluated directly.
Example for the calculation of CPV
The calculation of CPV is relatively simple. The advertising costs incurred by placing the video are divided by the total number of views achieved.
CPV calculation – example
- Cost = 100,00 EUR
- Views = 2,500
- CPV = 0.04
100 EUR / 2,500 views = 0.04 EUR
So if €100 is spent on advertising and the video is viewed 2,500 times, the CPV is €0.04.
Cost per view in the Amazon DSP network
Amazon’s demand-side platform (Amazon DSP) enables advertisers to buy display and video ads programmatically. This means that their ads can be displayed in image or video format on other websites. In contrast to the CPV billing model, however, billing in the DSP network is based on the CPM model (cost per mille). This means that there is a fixed price for 1,000 page views. This type of purchase is therefore based on the visibility of the ad.