“Digital marketers need to understand consumers’ attention economics”

Rohan Mehta, CEO, Media Kinnect, sheds light on the cost of ad-blocking for advertisers as well as media publishers, the advantages of shorter ad formats and more. 

How much are these Ad-blockers costing the advertisers as well as media publishers in terms of revenue?
Ad-blockers do not affect advertisers as much as media publishers. Advertisers choose different channels to allocate their funds to compensate for decreased reach on certain publishers. A 2015 PageFair Report estimates that publishers lose about $21.8 billion of their revenue due to Ad-blockers. 

How big is this problem of ad-blocking in India?
In India, approximately 122 million users from a total population of 350 million internet users in use ad-blockers. 

How would the phenomenon of ad-blocking affect the campaigns of the advertisers?
Advertisers get affected differently, depending on the campaign type. 

In cases where the deal type is CPM or CPC, the advertisers only pay for ads that get served/ clicked, therefore, the monetary loss is non-existent. The only probable issues they might face are slower campaign rate and difficulty in reaching a certain set of audience. 

In the case of fixed buys/ innovations, the advertiser stands to lose a lot. Decisions are usually made on the basis of overall traffic/ pageviews on a publisher and the costs are fixed irrespective of their performance on the day or period of the campaign. Here, the advertiser loses out on a substantial number of impressions that would have otherwise served in the absence of ad-blockers. 

What do digital marketers need to do in terms of attention economics?
A digital marketer needs to understand the attention economics of its consumer before trying to address the issue he/she faces with attention economics as a whole. The basics of attention economics is driven by five factors – Attention, Permission, Engagement, Trust, and Action.

·        Attention – Address the who, how, where, what, why of your online consumer

·        Permission – Gain permission from the consumer to advertiser such as asking them to subscribe to an emailer list

·        Engagement – It’s the most important factor for content and mainly defines time spent on a piece of content

·        Trust – Since two major goals are acquire new customers and retain old customers, trust becomes a key factor for attention economics

·        Action – Content is created to ensure that the end goal is achieved but in no wise means action is sure thing. Hence, it is very important to drive action actively

How far can shorter Ad formats help brands to meet changing audience demand?
The attention span of an online user is approximately 8 seconds, and this is the major reason why shorter ad formats work with today’s consumers. We have all experienced the point where we want an ad to end so that we can move to the main content. This irritation is avoided when shorter ad formats are used. Such ads are direct in their messaging and also value the time of their viewer. Today, there is no commodity more valuable than time; shorter ad formats work as they do not take much of the user’s time. 

What kind of challenges does the increasing Ad-block technology adoption pose?
Media houses that that rely on digital ads for revenue will have to reconsider their business plan to stay afloat. A power house like Google saw a 10 per cent decline in ad revenue in 2015, which resulted in a loss of $6 billion. Considering that they use paywalls to generate revenue, the market for paid news consumers is very small and cannot cover up for ad generated revenue. Advertisers will have to create ads that are more creatively crafted to grab the attention of their consumer. They will also have to make sure that they use the right channel with the target audience.

Media
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