Since the dawn of the audience targeting, publishers have fretted about audiences “leaking.” Audience leakage is when an advertiser can serve ads on cheaper inventory to the same people they’ve previously seen on premium sites.

Walt Mossberg recently told a story about an advertiser who bragged: “We’re going to place ads there for a little bit, we’re going to drop cookies, we’re going to figure out who your readers are, we’re going to find out what other websites they go to that are way cheaper than your website”.

If an advertiser pays a premium publisher a $20 CPM to reach auto enthusiasts, they can cookie the audience as part of the ad serve. Then, the advertiser can take that cookie onto the open exchanges and pay a $2 CPM for the same audience across programmatic inventory.

This scares the crap out of publishers. And rightfully so, but for all the wrong reasons. Audience leakage is made possible by cookies, but it’s not caused by them. Audience leakage is caused by a metric that doesn't accurately reflect the value contained in media: the impression.

An advertiser who looks at media bought from programmatic and premium publishers might ask themselves “are impressions on the premium publisher worth 10x more than exchange traded inventory?” and come to the logical conclusion that the environment doesn’t justify such a large premium.

In the context of the impression they’re probably right. All things equal, an impression from the premium publisher probably isn't worth 10x of another site. But all impressions aren’t equal, and this is where the audience leakage problem originates.

Brand advertising is about attention. Both the premium and programmatic publishers are selling attention. There are two ways to measure attention: duration and intensity. Duration is how long an impression lasted, and intensity is a measure of the quality of attention.

Neither of these are taken into account when buying impressions. The enables low quality publishers to game the metric by diluting the amount of attention contained within each impression.

Low quality publishers do this by simply putting more ads on a page, and reloading pages and ads more frequently. That low-CPM ad running on a programmatic inventory could very well be one of 15 ads surrounding a slideshow that is on-screen for 3 seconds. Using the impression, this is valued the same as a placement on a premium publisher which is the only ad on page for over a minute. Even worse, they're both "viewable".

This dilution of attention into many impressions is what allows low quality publishers to charge less. There is no free lunch; the cheaper programmatic inventory isn’t actually creating value out of thin air. In fact, the arbitrage game played by most of these publishers is creating more friction between content producers and consumers.

Audience leakage is caused by an opaque pricing metric that allows low quality publishers to masquerade inferior media as similar to premium ad space. If media metrics took into account intensity and duration, the value difference between low quality open exchange tonnage and real premium inventory would be more obvious and premium publishers could better support the price their product deserves.

Our industry can easily fix audience leakage — and a lot of other problems — once we start to move away from the failed metric of the impression.