What digital advertising can learn from the used car market

By June 20, 2020ISDose

Digital media viewability metrics don’t necessarily reflect quality and advertising could take a lesson in this regard from the used car market, according to Marc Guldimann and Karl Sjulsen of New York-based consultancy Adelaide.

Writing in The WARC Guide to Planning for Attention (subscribers can read the full report here), the pair reference the work of Nobel Prize winner George Akerlof, who theorized that markets fail when buyers can’t differentiate between high and low-quality goods.

In the case of used cars, one factor buyers have traditionally used has been the mileage of the vehicles they are looking at. “Similar to a count of viewable impressions, a count of miles provides a limited, but directional, amount of information about the quality of the goods purchased,” the authors note.

Some forty years ago the US used regulation to curb the declining quality of the used car market by making it a felony to tamper with odometers and mandating a record of reading.

Information-based businesses like Carfax built on the odometer data made available by regulation to create a more nuanced view of vehicle quality. “A similar pattern will likely emerge in digital advertising, with companies offering more nuanced quality scores on top of the data and infrastructure created by viewability ratings,” say Guldimann and Sjulsen.

Their own efforts in this field have produced a composite measure, the Attention Unit (AU), which includes several vectors such as viewable duration and clutter.

Analyzing data from campaigns across several verticals, they have found correlations between Attention Units and brand outcomes at all levels of the marketing funnel, they report. These include attitudinal survey-based brand lift and conversion & sales outcomes.

And just as regulations around odometer readings and the rise of services like Carfax resulted in more accurate evaluations and buyers being willing to pay more for higher quality cars, so, they argue, attention metrics could do the same for digital advertising markets.

“If buyers are able to use attention metrics to more accurately evaluate quality, their willingness to pay increases for higher quality impressions and vice-versa,” they observe.

“Marketers who utilize attention metrics to purchase undervalued media are doing a service to their own brands through more efficient outcomes and to the market by creating incentives for quality,” Guldimann and Sjulsen conclude.

Guest Author: WARC Staff

This article first appeared in www.warc.com

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