The quality of consumer attention has been falling for decades, and consumers find product informations on the web rather than on TV these days. That what’s Thales Texeira, assistant professor in Harvard Business School’s Marketing Unit, explain sin a recent working paper. What can marketers do about that? Beefing up advertising or setting up price promotions can have negative effects on current profits and future revenues. Hence, Texeira says that marketers should focus on reducing cost (create & distribute advertising for less money, using crowdsourcing, for example) or on increasing quality (create better ads and tailoring them to increase conversion).
This tweet from creativity researcher Theresa Amabile got me to this paper:
Intriguing paper on the need for #creativity in marketing: The Rising Cost of Consumer Attention http://t.co/5mJT68tZuS via @HarvardHBS
— Teresa Amabile (@TeresaAmabile) January 27, 2014
The basic idea is that consumer attention, which has always been highly sought of by brands and advertising agencies, is far from being a given. Actually it has never been, but today it is even more difficult to get consumers’ attention through advertising. The below chart shows that, after the appearance of TiVo in the United States, attention has been more expensive than ever.
Of course, you’ll say, the chart shows only primetime and Super Bowl CPM cost, for which brands tend to have (very) deep pockets. But Texeira says that, “while this graph only shows two cases, […] this pattern is not an exception. The rise in CPMs for premium content (broadcast TV, major magazines, online portals) has followed a similar path.” Below is another chart, showing that ad-skipping rates have increased… in other words, consumers watch less TV ads completely than before.
Why? Some possible reasons are that we’re overwhelmed by advertisements (but Texeira cites a newspaper copywriter from 1759, who wrote “Advertisements are now so numerous that they are very negligently perused,” so it’s obviously not new), that we don’t trust brands as much as before, that our attention span got shorter and/or/because that we’re paying attention to much more channels than before, including more screens of different sizes. While these reasons probably play a role, Texeira asks a provocative question:
Could it be that consumers just don’t need to pay attention to ads anymore?
Texeira thinks that advertisements don’t fulfill the same role anymore. Simply put, he argues that previously, they had an informative function. Today, consumers who seek information will go online rather than watch (and believe in) ads. What role does advertising play today? “The only other class of content that advertisers can use is entertainment,” he says, “TV commercials have become more entertaining and less informative.” That’s what the following figure indicates.
In a context where consumers pay less atention, companies could just buy more media space to offset this decrease. But Texeira also shows that buying consumer attention becomes more expensive. All that comes in a contest where companies try to decrease spending… or at least increase efficiency. So what can advertisers do about it?
- Create content for less money, either in-house or by crowdsourcing it
- Distribute content for less money, by using inbound marketing (pull) and amplification (push) strategies
- Tailor advertisements to have higher conversion rates when people don’t pay attention
- Tailor advertisements to increase peoples’ attention levels
If you are interested in Thales’ research, make sure to check out his article How to Profit from “Lean Advertising” on the HBR blog (or click on the image left). As to my opinion, I definitely think that advertising is going through a considerable (r)evolution phase where companies will be able to produce and distribute cost for less money than before. Advertising agencies will stay masters of strategy, media planning and high-quality content production, but new actors will emerge to make creation and distribution cheaper.
Crowdsourcing has already established itself as a (criticized but) legitimate design and advertising practice (Crowdsourcing Gains Legitimacy For Advertisers, Forrester, 2011), allowing brands to get relatively good content in a controlled and cost-effective manner. Today, some of these companies start competing even with traditional advertising producers and agencies. And many interesting developments are probably still to come.
Very interesting insights which aren’t really surprising, but good read anyway! 🙂