Don’t wait for perfection when it comes to using an attention currency
Don’t be afraid of new metrics just because innovation is uncomfortable or people tell you to wait for the perfect form of attention measurement.
While researchers and academics have fretted in The Media Leader recently about the care needed when constructing currencies, or the shortcomings of attention metrics as a currency, the reality is the market will decide what metrics become currencies.
Irwin Gotlieb, the individual likely responsible for the most media-buying in the last 50 years, had this to say about attention metrics at an event we recently hosted.
“I wouldn’t debate whether this should be currency or not,” Gottlieb said. “We always had secondary and tertiary currencies. Eventually, when knowledge asymmetry goes away, it can become primary.”
Whether or not you believe that attention metrics will achieve currency status, it’s a good idea to understand how this information asymmetry typically plays out and how to benefit from it.
Metrics become currencies in a cycle of arbitrage and gaming
In arbitrage, buyers use asymmetrical information to cherry-pick the best supply. Value accrues to buyers with information, and as buying skews to quality, high-quality sellers as well. Gradually, as the information becomes more widespread, its usefulness for arbitrage diminishes.
As quality inventory becomes scarce, some buyers will begin to ask for guarantees from sellers instead of risking the spot market. This is the turning point at which the metric becomes a currency, and benefits accrue to high-quality sellers.
Once established as a currency, sellers’ incentives are to game metrics by tailoring lower-quality products to masquerade as higher quality. Depending on how effectively the metric is gamed by sellers, buyers will start investing in new metrics to restart the arbitrage loop.
This is the cycle we’re seeing play out today with viewability and video completion rate (VCR) — two metrics widely used by advertisers that have been thoroughly gamed.
With a rather low hurdle of 50% on screen for one or two seconds, viewability offers very little assurance of quality and incentivises publishers to pack as many ads on the page as possible. VCR is even worse, as video players shrink and attach themselves to the side of the page, muted, for as long as needed to achieve completion.
These days, buying high-viewability, high-VCR placements results in fairly low-quality media.
To address this, some advertisers are shifting resources towards new ways of measuring media quality. Attention metrics have emerged as the leader in this space.
Our attention metric, AU, predicts marketing outcomes throughout the funnel.
When we set out to build AU, our aim was to isolate media impact from creative and audience. We wanted a metric that was:
- A reflection of media quality alone
- Simple and easy to understand
- Useful across channels
- Hard to game
- Connected to outcomes
While AU is most commonly used today for arbitrage, it’s starting to replace the currencies of viewability and video completion rate in contracts as advertisers gain comfort with attention metrics.
Why are more accurate metrics so important?
Beyond the value from arbitrage, better metrics create dramatic improvements in the health of markets. For starters, better metrics reset incentives towards quality — the simple act of arbitrage sends signals to the market that buyers demand higher quality and increase revenue for quality publishers.
As metrics become currencies, they level the playing field between buyers and sellers, enabling advertisers to increase the certainty of access to quality media and publishers to gain confidence in their ability to monetize it.
Finally, currencies hardened against gaming drive scarcity of quality and foster the trust required for more standardised contracts that further derisk market participants.
If an advertiser can easily retrade a contract, they’ll be more likely to invest with a publisher. And, if a publisher can confidently monetise media, they will be more likely to create it, realising the same benefits as forward sellers in a commodities market.
The lesson is to not be afraid of new metrics just because innovation is uncomfortable.
Advertisers are better off taking advantage of the arbitrage available today and prepare for the long-term efficiencies of more precise currencies.
Marc Guldimann is the founder and CEO of Adelaide, a company that aims to help brands invest more efficiently using attention data.