Cost per view (CPV) is a pricing model used in performance marketing. Google charges advertisers each time a user watches a video or interacts with it.

In this article, you'll get to know the way cost-per-view advertisements work, how they differ from CPM ads and get the formula.

How do CPV ads work?

CPV ads include in-stream and in-display advertisements. Users see in-stream ads before or after the video and have to watch them for at least 5 seconds before skipping them. Advertisers can add their advertisements with a clickable link to the video they want. This way, a user will be able to open it anytime while watching the video.

According to this pricing model, an advertiser is billed after a user watches a video at least for 30 seconds or interacts with it. Interaction means following the link from the CTA button, product card, banner, etc. This metric allows marketers to analyze user commitment providing valuable insights.

To create a CPV ad, advertisers bid the same way as placing PPC ads. The only difference is that they need to select TrueView video ads. Then the algorithm is the same: you set the maximum amount of money you're ready to pay for the necessary keywords. The higher the competition for a specific keyword, the more you will pay within your initial bid.

To create effective cost-per-view ads, you need to select specific and narrow audiences to show your ad to. This ensures better engagement, higher conversions, and involvement, but you'll pay more for such targeting. While analyzing the performance of the ads with different pricing models, marketers usually compare CPV ads to CPM. So, let's see the difference.

CPV vs CPM

While the CPV pricing model makes advertisers pay after users watch the video or interact with it, the cost per mile (CPM) model charges a specific amount of money for 1,000 ad impressions. Each time users see the ad, it counts as an impression. With this model, businesses can increase their brand recognition and awareness. Even though the CPM model doesn't belong to performance-based marketing, it enables businesses to identify top-performing channels for promoting their product.

The choice of a model depends on your goals. You can combine CPV and CPM to get more accurate data about your potential clients and boost brand awareness.

It's time to learn how to calculate CPV for your advertising campaign.

How to calculate CPV?

The amount of money to pay is usually set by the publisher, so you can negotiate the price. To evaluate this pricing model for your business, consider the formula below.

CPV = advertising costs/video views

Say, you've spent $200 on advertising and got 3,000 views.

CPV = $200/3,000 = $0,06

So your cost per view is $0,06.

If you want to improve the performance of your CPV advertisements, read the following section.

How to optimize your CPV?

If you want to reduce your CPV, consider improving the quality of your ad. Mind that it should be relevant to the video you're going to place it on. The more relevant your ad, the less you will pay.

To meet your goals with CPV ads, target broad audiences. Remember that choosing this model already means targeting engaged users interested in your brand, so consider expanding your audiences. Create short but informative ads since they perform better than complicated and long ads. Ensure that your call-to-action button is straightforward and users know what to expect after following the link.

Google recommends that advertisers use advanced settings while creating a campaign for better performance. You can set the necessary language in campaign settings to target the right audience. Consider the scheduling option to manage the time your campaign is running. You can choose the days of the week and specific hours when your viewers are most likely to engage. With a frequency cap, you can control the number of times a user sees your ad. This way, you can increase your outreach to new audiences.

Congrats, now you know your cost-per-view advertisements work, the way they differ from CPM ads, and how to calculate CPV and optimize your efforts.

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