The Rising Cost of Consumer Attention: Why You Should Care, and What You Can Do about It

Thales S. Teixeira

Working Paper | HBS Working Paper Series | 2014

The Rising Cost of Consumer Attention: Why You Should Care, and What You Can Do about It

Abstract

Attention is a necessary ingredient for effective advertising. The market for consumer attention (or "eyeballs") has become so competitive that attention can be regarded as a currency. The rising cost of this ingredient in the marketplace is causing marketers to waste money on costly attention sources or reduce their investment in promoting their brands. Instead, they should be thinking about how to "buy" cheaper attention and how to use it more effectively. Research in the emerging field of the Economics of Attention shows how this can be achieved. Here, I argue that, irrespective of the means to attain it, attention always comes at a price. I also show that the cost of attention has increased dramatically (seven- to nine-fold) in the last two decades. To counteract this trend I propose novel approaches to lower its cost or use attention more efficiently by adopting multitasker-tailored ads, Lean Advertising, and Viral Ad Symbiosis. To guide the choice of which approach to take, I propose the Attention-contingent Advertising Strategy, a framework to match the most effective approach to the quality of attention contingently available. As the value of attention rises, marketers need to become better managers of attention. This paper is intended to help them in this regard.

Keywords: Strategy; Advertising;

Language: English

Format: Print

23 pages

Read Now

Citation:

Teixeira, Thales S. "The Rising Cost of Consumer Attention: Why You Should Care, and What You Can Do about It." Harvard Business School Working Paper, No. 14-055, January 2014.

By late 2017, Brazilian retailer Magazine Luiza's CEO was convinced that the company could significantly grow sales and accomplish its aspirations of digital transformation. What was unclear in his mind was whether he should act as a tech company and grow as fast as possible (e.g., high double digits) or be more conservative and grow sales at a financially healthy rate, like traditional retailers did (e.g., single digits). The primary way e-retailing companies achieved these abnormally high rates of growth was through lowering prices and foregoing profitability. Historically, mass retailing had razor-thin margins. It was thus unlikely that he could have it both ways: grow fast and be profitable. Should Trajano opt for more aggressive growth or proceed more conservatively?

By June 2012, Stephan Aarstol felt that he had successfully passed the first critical stage of his ecommerce business. As the founder and CEO of a standup paddleboard (SUP) business, he had built a strong relationship with Asian manufacturers, built a small warehouse and fulfillment center, designed an innovative line of inflatable SUPs, and built an ecommerce website that sold boards and accessories to consumers. After the rising trend in interest for the sport provided a strong wave of growth in sales, Aarstol contemplated the next stage at Tower Paddle Boards. Should he partner with Amazon to sell his full line of boards--manufactured under his brand--and accessories--manufactured by other brands? Should he sell to Amazon? Should he sell on Amazon marketplace? Or should he avoid the powerful online retail giant altogether?

Consumers have an increasingly wide variety of options available to entertain themselves. This poses a challenge for content aggregators who want to effectively promote their video content online through original trailers of movies, sitcoms, and video games. Marketers are now trying to produce much shorter video clips to promote their content on a variety of digital channels. This research is the first to propose an approach to produce such clips and to study their effectiveness, focusing on comedy movies as an application. Web-based facial-expression tracking is used to study viewers’ real-time emotional responses when watching comedy movie trailers online. These data are used to predict both viewers’ intentions to watch the movie and the movie’s box office success. The authors then propose an optimization procedure for cutting scenes from trailers to produce clips and test it in an online experiment and in a field experiment. The results provide evidence that the production of short clips using the proposed methodology can be an effective tool to market movies and other online content.

Faculty & Research

The Rising Cost of Consumer Attention: Why You Should Care, and What You Can Do about It

Abstract

Citation:

About the Author

More from the Author