In today's Choice Economy, Canadian consumers have all the power and this is a good thing for everyone. Successful brands know that to win consumer attention, they need to develop advertising that entertains, informs and delivers utility. With relevance as a guide, consumers get the information and entertainment they seek and advertisers build quality audiences based on legitimate attention.

Written by
Marshall Self
April 2014


The choice economy

The media landscape keeps getting more complicated for marketers. Consumers are screen agnostic: They watch what they want, when they want and, with the proliferation of social media, they can instantly share their good or bad experiences they have had with any brand. Consumers choose when and how they engage with content and brands. Seth Godin talks about the "Attention Economy" and the "Connection Economy." Both are possible because of one powerful privilege–choice. We are in the Choice Economy. And it requires a new kind of advertising literacy.

Traditional awareness media relies on what Chris Anderson calls "ambushing attention." We pour a ton of stimulus media in market, primarily through TV, hoping to connect with what we believe is our core audience. We use reach and frequency as the core metric in the hopes that we bombard people with our message just enough times to ensure it gets through. But consider this—the average consumer sees approximately 5,000 ad messages a day. How many of those ads are relevant to the consumer? Thinking of my own experience, I would say no more than 50%. That's a tremendous amount of media waste in order to find the relative few who care. And with media time fragmenting across multiple screens, 51% of Canadians report using a smartphone, tablet or PC while they watch TV. Attention is not only fragmented; it's fickle.[1]

Yet, even though attention is being scattered like confetti, many brands are still devoting most of their resources to traditional media tactics that rely on ambushed attention. So how do brands break through the clutter? And more importantly, when they do, how do they create impact, so that their messages actually leave a lasting impression?

I believe the answer is to master the new mediums of choice, to develop the skill sets to take advantage of this new marketing reality.

My wife, who hates golf, would almost certainly click Skip This Ad.

From YouTube and Twitter to Netflix, platforms-of-choice are becoming the choice.

And choice isn't just about programming anymore. It's also about entire mediums. These days, with so many choices, consumers also have the option to decide whether broadcast television itself is relevant to their lives anymore. Ten years ago almost everyone watched cable TV. Today, cable companies are experiencing the discomfort of “cord cutting” where cable subscribers are simply opting out. A recent study estimated that 458,000 (3.9%) of Canadian TV subscribers cancelled their cable subscriptions between 2011-2013, presumably to find entertainment and news elsewhere.[2]

So in this fragmented Choice Economy, where attention and relevance are an ever elusive target, and CPM still measures eyeballs rather than impact, what choices do brands have? Some good ones, actually.

Successful brands in this choice-based economy know that to win consumer attention they need to provide advertising that entertains, informs and/or provides utility. In my opinion, today's brands need to provide a clear value exchange in their advertising, if they are going to create a genuine connection with consumers. For example, search "Pepsi Max Jeff Gordon" on YouTube and you'll see. In early March 2013, Pepsi entertained their fans with this hilarious celebrity video on YouTube. By August, it had earned more than 38 million views. This March, they launched a follow up video with Jeff Gordon that received 14.8 million views in just three weeks. Anyone who has watched either video from start to finish has spent over three minutes with Jeff Gordon and, by implication, with Pepsi. On television, that's an unaffordable duration.

The key is relevance. And that's not new. As famed '60s adman Howard Gossage said, long before the browser, "The real fact of the matter is that nobody reads ads. People read what interests them and sometimes it's an ad." Search is successful because its core purpose is managing relevance.

At Google we are developing other ways consumers can make choices and that advertisers can target their most promising audiences. On YouTube and Google's Display Network, consumers can skip ads which do not interest them, and advertisers only pay when consumers choose to watch the ads.

If, for instance, I was to encounter a skippable ad from a top golf club manufacturer, I'd likely not skip it, particularly if the first few seconds grabbed me. Golf is one of my interests. I want that information. My wife, who hates golf, would almost certainly click "Skip This Ad." And that's good. For the same reasons she's not interested in TaylorMade or Callaway, they aren't especially interested in her since she is not a golfer. It's a win-win.

Let's be clear. Traditional "awareness advertising" is not going away. It will remain the mainstay of most brand budgets. But brands are constantly under pressure to improve advertising efficiency, and choice-based ads reduce spill. You pay only for consumers interested in your brand.

Choice advertising also improves brand perception.

A 2013 Canadian study with comScore [3] found that 60% of consumers are more favorable towards brands that let them skip. View rates, it turns out, are high because there is genuine interest in the brand/product.

But this type of advertising requires a new literacy. And the path to literacy is practice.

Five reasons to go deeper with choice-based advertising

1. Efficiency. There's very little waste. In conventional media, you rent space for a flat rate. Impact isn't an accurately measurable factor. There's a lot of media waste to reach the portion of the audience who cares. In choice media like TrueView, you pay only for attention, the very measure of impact.

2. Find your true audience. With choice-based ads like TrueView, your audience is effectively raising their hand and saying "I'm interested in what you have to say." Your audience will raise their hand if they find your message relevant therefore you don't need to target with a preconceived idea of whom your core audience is.

3. Deeper engagement. Consumers choose to engage with your brand when they know your message is relevant to their interests. We conducted a study in the U.K. [4] which found that people who decided to view skippable pre-roll ads on videos were 75% more engaged than users who had to view a standard pre-roll.

4. Analytical awesomeness. You can see important implications as they unfold. Total views are just the tip of the iceberg on YouTube. With YouTube Analytics, you can also see, for example, when audiences fall off by region. Identify the point in a video ad that people skip. Or even what demographic group liked the video the most.

5. Creativity unleashed. You can unleash your agency. TV ads are packaged in 30-second boxes. That limits expression and information, and it forces reliance almost exclusively on emotional triggers. On the other hand, the Jeff Gordon YouTube clip is almost four minutes of high-energy creative fun. Instructional videos can be even longer. And online there's the bracing freedom to test the borders of propriety and score big when audiences respond. Kmart's slightly risqué "Ship My Pants" YouTube video could not run on TV. But online it's a big hit and getting bigger week after week. Posted April 2013, it was climbing toward 20 million views by August. The lesson–brands can create more flavor online, backing off on the hard-sell and driving audience connection.

Choice is good for everyone involved. It defragments media by putting the power where it is anyway, in the hands of the consumer. Consumers get the information and entertainment they seek in a readily accessible form. Advertisers build quality audiences while refining the art of attracting legitimate attention. And, a point worth reinforcing, brands pay only for that legitimate attention, not merely for eyeballs.

[1] The New Multi-Screen World in Canada: Understanding Cross-Platform Consumer Behavior, Google/Ipsos, November 2014
[2] The Battle for the North American (US/Canada) Couch Potato: Online & Traditional TV and Movie Distribution, The Convergence Consulting Group Limited, April 2014
[3] Ipsos MediaCT and Innerscope Research Inc. 2011
[4] Ipsos MediaCT and Innerscope Research Inc., U.K. 2011