The Consumption of Advertising: Attention & Ad Content

Abstract

This paper develops an equilibrium framework to study the consumption of advertising. Through this framework, we examine the advertiser’s optimal decision for informational and non-informational content while tending to the viewer’s individual incentives to attend to the ad relative to some other, non-ad-viewing activity. We show how the equilibrium ad content strategies vary across (i) market factors, (ii) advertising goals, and (iii) ad formats (skippable versus non-skippable). Our framework also classifies many advertising decisions observed in practice. First, an advertiser can structure content to induce curiosity for continued viewing, a tactic prevalent in clickbait ads and “mystery ads”. Second, skippable ads have a lower amounts of non-informational content relative to non-skippable ads, which can explain the industry perception that ads on digital media are of lower copy quality than traditional ads. Finally, skippable ads are better suited for less ambitious advertising goals, such as brand awareness, when attention-spans are shorter. This latter result justifies the value proposition for the skippable format used by digital media platforms, such as YouTube and Facebook.

Keywords: Advertising Content, Attention, Skippable Ads

JEL Classification: M30, M37