The Efficiency of Attention in Advertising

I’ve written before about the problems with TV advertising. Recently I’ve been thinking more about the efficiency of various methods of advertising — to the target, not to the advertiser. Almost all studies of advertising concern how effectively advertising turns into leads or sales, but rarely are the interests of the target of the ad considered directly.

I think that has to change, because we’re getting more tools to avoid advertising and getting more resistant. I refuse to watch TV with ads, because at $1.20 per hour of advertising watched, it’s a horrible bargain. I would rather pay if I could, and do indeed buy the DVDs in many cases, but mostly my MythTV skips the ads for me. The more able I am to do this, the more my desires as a target must be addressed.

Advertising isn’t totally valueless to the target. In fact, Google feels one big reason for their success is that they deliver ads you might actually care to look at. There are other forms of advertising with the same mantra out there, and they tend to do well, such as movie trailers and Superbowl ads.

Consider a video ad lasting 30 seconds, with a $10 CPM. That means the advertiser pays one cent per viewer of the ad. The viewer spends 30 seconds. On the other hand, a box with 3 or 4 Google ads, as you might see on this page, is typically scanned in well under a second. These ads also earn (as a group) about a $10 CPM though they are paid per click. Google doesn’t publish numbers, but let’s assume a $10 CPM and a 1% click-through on the box. It’s actually higher than this.

In the 30 seconds a TV ad takes, I can peruse perhaps 50 boxes, bars or banners of web ads. That will expose me to over 100 product offers that in theory match my interests, compared to 1 for the video ad. The video ad will of course be far more convincing as it is getting so much attention, but in terms of worthwhile products offered to me per second, it’s terrible.

It isn’t quite this simple though, since I will click on one ad every every minute spent looking at ads (not every minute on the web) and perhaps spend another minute looking in detail at what the ad had to offer. That particular, very well targeted site, gains the wealth of attention the video ad demands, but far more efficiently.

I think this area is worth of more study in the industry, and I think it’s a less understood reason why Google is getting rich, and old media are running scared. In the future, people will tolerate advertising less and less unless it is clearer to them what value they are getting for it. Simply being able to get free programming is not the value we’re looking for, or if it is, we want a better deal — more programming in exchange for our valuable attention. But we want more than that better deal. We want to be advertised to efficiently, in a way that considers our needs and value. The companies that get that will win, the dinosaurs will find themselves in the movie “The Sixth Sense” — dead people, who don’t know they’re dead.

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His name is Brad Templeton. You figure it out.
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