A few days ago, a report in Axios caught my eye: big advertisers, frustrated with the digital advertising process, are shifting their digital ad dollars to TV — and even radio and billboard ads are in play. It was a pointed reminder that despite growth in overall digital ad spending projected at billions of dollars per year, not all is well in the marketplace.
Advertisers are concerned by an opaque supply chain, low viewability and high levels of fraud. Publishers are stuck competing with Facebook and Google in an ad economy based on selling impressions, which by definition rewards scale over quality. Professionals on both sides of the equation are looking for better ways to buy and sell ads.
Brent Merritt
One intriguing alternative to the status quo is selling display ads based on time. In this approach, publishers use attention currencies such as cost-per-hour to sell big blocks of users’ time (measured by active engaged time metrics), instead of selling bundles of impressions.
In the course of researching a new white paper about attention analytics, I got to talk to smart practitioners about this trend, and some key insights from the report are below. The most important takeaway is that while time-based ad sales may not reshape the entire ad economy, they hold real potential for certain publishers as they fight for the ad dollars the duopoly leaves behind.
Where the demand comes from
The idea behind time-based ad sales started circulating in 2013 when an advertising director at the Financial Times proposed that time could be used as a currency to trade. Over the intervening years, awareness of the concept has spread and a small group of publishers, including the FT and the Economist, has actually begun selling ads this way.
The appeal for higher-end publishers is clear. Selling ads based on impressions rewards a high volume of visitors (even if they’re bots), but selling based on time assigns higher value to a more engaged audience. By extension, this rewards higher-quality content, and it provides a foothold to compete for ad dollars on the basis of content quality and audience engagement rather than fighting a losing battle for massive scale.
From the advertiser perspective, purchasing based on time can help address concerns about the efficacy of ad buys. The attention currencies used for time-based sales guarantee greater viewability than the Media Rating Council’s viewable impression standard, and because they’re based on real-time monitoring of user actions, they can help reduce fraud. And while more empirical research is needed, reports from the FT indicate that more time in view does increase a display ad’s impact.
Asked about the growing interest in time-based ad sales, Brendan Spain, FT vice president of advertising for the Americas reported, “The MRC viewability mandate has made publishers think about attention metrics and has resulted in a lot of questions around optimization for and selling on attention. We’re hearing other pubs talk about getting their ducks in a row to sell on time.”
Sounds great. What’s the holdup?
So if time-based sales hold such potential, what accounts for their relatively limited adoption thus far? One of the key points I heard repeatedly in my research is that significant barriers remain.
Stephanie Layser, director of advertising technology at News Corp, pointed out that a major hurdle is simply inertia. She observed that it would be difficult for an attention currency to spread because “the industry as a whole and the technology that it takes to achieve these goals are so deeply ingrained in the CPM model.”
Another roadblock is the current lack of demand for time-based sales from advertising agencies. Since their business models and technology are built around trading on impressions, introducing an entirely new currency is not a simple proposition. Similarly, mixing and matching currencies could create headaches for publishers. Layser explained that introducing a time-based currency would require significant changes to the ways that publishers’ ad servers function.
In assessing how likely time-based attention currencies are to spread more broadly despite these barriers, the people I spoke with offered a broad range of opinions. Some believe it’s improbable while others think it’s likely.
Jill Nicholson, head of product education at the analytics firm Chartbeat observed that the industry would have to reach “a tipping point where the early successes are so attractive to publishers, and the monetary benefits, the revenue benefits, of selling a new way are so attractive to publishers that it will overcome the difficulties. … I think the industry is really hoping for a new way to transact, it’s just a scary change to make.”
Who wins in an attention economy
If trading on time spreads more broadly, as some predict, it would stand to reward premium publishers above all. Their quality content and highly engaged audiences made up of desirable advertising demographics make them prime candidates to benefit from this approach.
On the other hand, publishers who chase scale without regard for engagement, especially those who do so using clickbait and misleading headlines are likely to lose out since they generate a lot more clicks than engaged time.
How much impact could time-based sales actually have for the winners? The FT’s Spain predicted, “I think what we’ll see is a much more sustainable business model for pubs who aren’t top ten or top five sites. You take Facebook, Google and a few others out of the top, and I think you start to see a sustainable business model for the top 1000 publishers instead of the top 100 publishers.”
In a marketplace where many publishers are fighting for survival, a shift of that magnitude would be an important step toward sustaining top-tier digital publishing and journalism. It remains to be seen how big the “attention economy” of time-based ad sales grows, but any tool that can help publishers compete certainly warrants ongoing attention and further exploration.
Brent Merritt recently completed a graduate fellowship at the George Washington University’s School of Media and Public Affairs. His work there focused on how digital technologies are changing the future of news media and strategic communications. He’s now an independent communications consultant at Metric Communications, where he helps organizations develop smart messaging and analytics. Follow him on Twitter, @brentmerritt.
