Grow Faster. Die Slower.

TLDR: Popular metrics like CPM, CPAU and ROAS undervalue the media that is most effective at brand building. Advertisers who apply attention to predict effectiveness will outperform their competitors in the marketplace.

We’ve known that not all impressions are equal for a long time. We see this in the marketplace, with higher quality media commanding a CPM premium….

…but does the Invisible Hand of the free market have a blind spot?

Inspired by Byron Sharp, I evaluated the cost of Instagram and YouTube using attention data to proxy quality and predict effectiveness. In theory, the more effective platform should command a proportionately higher CPM premium.

For the sake of simplicity I focused on planning a 2-week campaign to drive Unaided Awareness.

The Simple Cost of Attention is Misleading

Adelaide’s attention algorithm “scores” inventory against a metric they refer to as the “AU.” One way buyers have been leveraging this data is to use CPMs and AU scores to calculate the cost of 1 AU (CPAU) on each platform. Using the Industry Benchmarks published in EMARKETER, we can calculate the CPAU of Instagram and YouTube.

On a CPAU basis, YouTube is double the cost of Instagram. However, the cost of 1 AU is completely irrelevant. What we actually care about is the probability and cost of effective advertising on each platform

Calculating the Probability of Effective Advertising

My friends at Adelaide were kind enough to provide access to two datasets underpinning their attention benchmarks.

1. Attention Norms Database: Aggregates Attention Unit scores (AU) from all historical campaigns. The higher the AU , the higher the ad placement’s quality, or predicted attention.
2. Flight Control: Aggregates category brand lift study data from historical AU-measured campaigns to ascertain the minimum amount of attention you need to be effective. The higher the AU scores, the fewer exposures required for effective advertising.

With both Norms and Flight Control data, I calculated the odds of delivering effective advertising.

• At 1 exposure, only .5% of impressions on Instagram were effective
• At 6 exposures, the odds of effective advertising on Instagram improved to 8.2%

Conversely, the vast majority of impressions on YouTube delivered enough attention to be effective at lower frequencies.

The Cost of Effective Advertising Reveals Triple Digit Efficiencies

With our CPMs and probability, we can determine the optimal frequency and Cost Per Effective Advertising (CPEA) relative to the Cost Per AU.

Unaided Awareness

	Instagram	YouTube
Planned CPM	$3.00	$15.00
CPAU	$.0001	$.0002
CPEA	$.22	$.03

Even without considering decay, YouTube was over 7X more cost-effective than Instagram at increasing Unaided Awareness. While this won’t be the case for every brand, mix, audience, creative and KPI, you still need to wonder, “Is YouTube undervalued? Shouldn’t the YouTube CPM be even higher?” Where is Adam Smith’s Invisible hand?

The micro-answer is that most buyers are not using attention data to its fullest. The macro-answer speaks to a much larger marketplace trend.

The Market Is Disproportionately Invested In “Performance Media”

Unlike economic theory, not all buyers have the same objectives or incentives. Most buyers would agree that a Meta lower-funnel ROAS (Return on Ad Spend) campaign outperforms YouTube.

This is precisely why YouTube is undervalued as a “true advertising” vehicle. YouTube is effective at driving Unaided Awareness because it is inherently designed to be seen and heard to drive Mental Availability.

“Performance” media is designed to drive in-market presence by serving Ads to those most likely to convert. This is problematic for several reasons.

• The majority of your customers are those less likely to convert, and they account for half of your sales.
• Platform ROAS (Return on Ad Spend) is simple, but rarely addresses incrementality or nuanced attribution.
• Performance bidding increases the cost of a smaller, in market audience. It is designed to extract more revenue from Meta’s audience, not increase your returns.

The shift to “ROAS” has established brands allocating~40% of their media budgets to “performance” marketing.

With the increased focus on returns, you’d expect macro increases in effectiveness and accordingly, increased media budgets.

Marketing budgets have declined.

Media budgets have not increased…though spend in performance media continues to grow.

This has led some to conclude that although necessary, performance marketing will not grow your brand over the long-term.

Conclusion: Don’t Sacrifice “Brand” For “Performance.” Use Attention to Stretch Your Brand Building Media Investments.

If your media budget is fixed and increasingly dedicated to performance media, you have only one option: Make your brand media more cost effective.

• Attention is an unbiased valuation alternative directly linked to How Brands Grow
• Attention emphasizes placements and channels currently undervalued by the media marketplace
• The probability of effective advertising is the largest lever in determining optimal platform frequency and marketing efficiency

Attention is an opportunity to Grow your brand Faster, or at least, help it Die Slower.

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Post Script: Four Additional Marketplace Hypothesis’ to Drive Efficiency

Hypothesis	Opportunity
Lower barriers to entry (out of pocket cost, turnkey asset production, ease of use) increase demand and pricing relative to ad effectiveness	High-barrier media is undervalued
Walled Gardens have created asymmetrical access to unbiased performance data	Neutral, cross-channel third party measurement solutions to identify efficiencies
CPM is a critical efficiency lever, but is driven by the marketplace, not effectiveness	Simple, unsophisticated metrics overvalue the returns of “low-cost” media
The growth of “Performance” media has inflated demand for “lower-funnel” platforms	Don’t always pursue a “full funnel” platform strategy – be selective in how you use platforms based on your KPIs