The Sell Through Rate in FAST advertising
Sell Through Rate, closely related to Fill Rate, is a crucial metric in the realm of display advertising. It gauges how effectively a publisher is utilizing available ad inventory. Unlike Fill Rate, Sell Through Rate takes into consideration that inventory in streaming video (and audio) is based on time, not just impressions.
Example of sell through rate
To illustrate this concept, let’s consider an example. Imagine a viewer streaming a TV show on your FAST channel or app, encountering three ad breaks. According to your ad break policy, each of these breaks can contain five ads, each lasting 30 seconds.
The basic calculation suggests that you can deliver a total of 15 ads, each lasting 30 seconds, resulting in a 100% Sell Through Rate. But here is the catch:
Your ads can last 30 secs, but also 10, 8 or 15 secs
Due to the time-based nature of streaming, you could also deliver 1 ad lasting 90 seconds and 4 ads lasting 15 seconds, which collectively equals the time equivalent of 5 ads lasting 30 seconds. This would also yield a 100% Sell Through Rate.
However, let’s say you receive a report indicating that you delivered only 12 ads lasting 30 seconds each. In this case, your Sell Through Rate would be 80% (12 out of 15 ads were delivered).
The Significance of Sell Through Rate
For FAST channels, Sell Through Rate is a straightforward calculation that assesses and monitors your revenue performance. It also ensures that you are measuring the actual available inventory, addressing a unique challenge in streaming media advertising that differs from display advertising.
Unlike display advertising, where all ad units are loaded when a page is accessed, streaming ads cannot be rendered until the viewer reaches that point in the video stream. Moreover, there’s no guarantee that the viewer will reach that point. This is why viewability is not as relevant in Connected TV (CTV) advertising. Given the scale of video streaming, technology providers heavily rely on caching strategies, employing a standard like VMAP. VMAP functions like a Spotify playlist: a single play request returns a full list of ads for viewers to engage with at their discretion.
Excluding ad opportunities from the final sell through rate
In our earlier example, a 2-hour video stream with 10 ad breaks theoretically contains 50 ads. If we measure using these 50 ads, our Sell Through Rate drops dramatically from 80% to 19%.
However, since the viewer only watched 3 ad breaks, the remaining 7 ad breaks go unrendered and unsellable, thus excluded from the Sell Through Rate calculation. That’s it.
