Not all consumer attention is created equal—that’s a critical lesson from McKinsey’s recent report on content creation and monetization. On this episode of The McKinsey Podcast, McKinsey Senior Partner Kabir Ahuja speaks with Editorial Director Roberta Fusaro about something called the “attention equation” and how media players can use it to get a better return on their investments. It’s about the quality of focus, Ahuja reminds us, not just the quantity of eyeballs.
The McKinsey Podcast is cohosted by Lucia Rahilly and Roberta Fusaro.
The following transcript has been edited for clarity and length.
What’s new on McKinsey.com
Lucia Rahilly: Before we hear from Kabir, let’s talk about what’s new on McKinsey.com. We have a report on how today’s foreign direct investment may shape the future of industry and trade.
Roberta Fusaro: And our strategy champions article describes how top-performing companies design their plans and mobilize their organizations. Because—especially in turbulent times—great business strategies really matter.
And now, McKinsey Senior Partner Kabir Ahuja.
Who’s paying attention?
Roberta Fusaro: Since the beginning of time, companies have been trying to get consumers’ attention—to get them to do something, to buy something. How has that become more difficult today? I look at my kids: They’re playing a video game, watching a TV show on the big screen, but also texting with friends. What’s going on with consumer attention these days?
Kabir Ahuja: It’s funny. I do the same thing when I think about attention—I think about my kids. But we’re as bad as they are.
Roberta Fusaro: True.
Kabir Ahuja: Everyone has fragmented attention these days. What’s fascinating about what’s happening with our attention is that more of it is going into media. The average American person spends about 12 to 13 hours a day with media.1 Where does that come from? It’s both longer periods of time and that we’re on two devices.
And during the pandemic, our attention jumped. We got big growth, and it never came back down. As the amount of time is going up, the amount of content out there is going up. A lot of that’s driven by user-generated content. So, we have this interesting dynamic of a lot more hours of attention but even more content in the world to go find.
Roberta Fusaro: It’s crazy when I think about what I could do with 12 to 13 hours a day. So, what’s the implication here, then, for companies’ ability to break through and attract consumers—and then monetize this attention?
The average person spends about 12 to 13 hours a day with media.
Kabir Ahuja: Reach is easier to find than ever. You actually can find people in digital channels. So, in this world where second-screen usage is at an all-time high—close to 90 percent of Gen Z are second-screen users, and it’s not that far behind for the rest of the demographic cuts—the real question isn’t, “Can I find someone?” It’s “How effective is my reach, and am I using it the right way?”
Roberta Fusaro: Are there particular channels that are more effective in terms of breaking through? Are people living in one channel over another? Talk a little bit more about the differences between channels.
Kabir Ahuja: There are differences between channels and inside channels. We surveyed thousands of users all over the world on their attention behaviors.
Social video is one that is popping; it’s growing fast. And there are some really interesting dichotomies here. One is that not all social video is created equal. Whatever the algorithms that live on TikTok and YouTube are, they’re much more effective than the ones on other channels. Those two generate a disproportionate amount of customer satisfaction score in terms of the attitude toward the channel compared with other social video platforms.
But social video, ironically, is one of the most isolated activities. Eighty percent of social video consumers actually watch video alone. That’s another learning. There are a couple other interesting ones.
Video games, in general, generate extremely high focus levels, and yet that focus maybe isn’t monetized properly.
Premium streaming video has high loyalty and continues to grow. People spend a lot of time looking for what to watch; that’s not surprising. But when they find something to watch, it’s actually one of the channels where people multitask the most. Almost 90 percent of consumers will pick up their phone at least once, probably more than once, during a streaming-video segment.
Measuring consumer attention
Roberta Fusaro: This all resonates. I want to go to this phrase: the “attention equation.” Can you define that for us?
Kabir Ahuja: We gathered data from all over the world—from all the different sources we could find. We did our own surveys and put them all together. What we tried to answer was, “Why is a unit of attention worth what it is?” What we found is that attention can actually be explained.
Video games, in general, generate extremely high focus levels, and yet that focus maybe isn’t monetized properly.
It can be explained with two things: “CQ” is the commercial quotient—that’s consumer value and platform sophistication. “AQ” is the attention quotient—the level of attention paid by an individual while consuming content—and intent, which is the job to be done by the media.
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And that’s the attention equation.
On the commercial side, it’s about the profile of the attention you’re getting in terms of the demographics: who’s watching, what their income level and spending profile are. Also, how good of a mousetrap you have built.
Think about it: If you have social video, it’s a great mousetrap. You can click, and that takes you right to a “buy moment” where you’ve already got a payment method. Compare that with something like books, where on the commercial equation side, once you’ve made the purchase, you’re deep in it. You’re in a world; you’re reading. It’s a very high-focus moment but maybe not as good for commercialization.
What we found was that 33 percent of the variance in why content is monetized is not explained by the commercial factors. Instead, it’s explained by the quality of attention.
Translating attention into value
Roberta Fusaro: Tell me a little bit about how companies can deploy this equation to target a particular set of customers.
Kabir Ahuja: There are a lot of ways. The first thing is to understand what’s happening in each of these channels. Let’s take it from a marketer’s point of view: You look at some version of how many people you can reach, for what cost, and what demographic profile they have.
One of the things you might do is look for mismatches between how you can monetize the commercial and attention quotients. There are places that we think are undermonetized. Examples include streaming video and mobile gaming. In streaming video, you might see things like more targeted advertising based on a connected TV, as advertising becomes a bigger part of the diet on streaming platforms.
And how you use that might change. Knowing that you have high attention, you can use it differently than you might use more generic targeted media.
Mobile gaming is interesting, too. We think it’s undermonetized. If you look at mobile gaming and the advertising that drives it, much of it is remnant inventory or interstitials—where you’re going to play a game and, suddenly, the screen comes up and you’re forced to watch an ad.
You wait for that “X” to click. Then, when you finally click the X, it’s not a real X—it’s a fake X, or the pixels misalign, so you get an ad anyway. But with such a high-attention, high-engagement platform, why is the advertising of such low quality?
I think those are two places where you might see a different approach by advertisers. Also, as the content itself evolves, you might see new ways to integrate advertising that change the experience.
Roberta Fusaro: We know that there are all these opportunities that are under monetized. What strategies can companies use to change that situation? Are there data or analytics that can influence media players?
Kabir Ahuja: For sure. And I guess even before you get to what the “piping” and analytics are, you’d say, “What problem do I want to solve?” One is resonance: “Can I match the content I offer to the consumption state of the consumer?” So, we took our attention equation and then exploded it for each of the streaming platforms and found that two of them had extremely high consumer lifetime values. Many of them fall in the middle zone of medium focus, but it’s not always clear, or it’s not the highest signal.
And the way streaming platforms drive focus is not just the content; it’s also how good they are at recommendations and batch releasing—making sure you have the right next thing to watch and you’re coming back because of a variety of things. It’s the total package of product experience.
So, two streaming platforms had the highest focus. One is Netflix, which has a high ability to drive focus. And the other was driven by “job to be done,” which is what you’re delivering more than anything, and that was Disney+—which has the combination of Disney and ESPN, where you have sports lovers and kids, who both have clear reasons to engage.
It’s very interesting to see that the customer value and the engagement levels are actually tied directly to this thing we call the “attention quotient.”
Roberta Fusaro: Let’s shift from streaming video back to video games: How can companies use the attention equation to take advantage of opportunities there?
Kabir Ahuja: I talked about the mobile-gaming dynamic, which is that it’s growing. But it’s not necessarily considered high-value inventory. A lot of it is advertising other downloads. So mobile gaming has been kept away from upper-funnel brand presence advertising, which I think is an undermonetized opportunity.
I think with PC and console gaming, you have this dynamic around high focus but also longer play sessions. It’s both a combination of having a single player but also a communal experience. A lot of that communal [experience] comes from live, simultaneous online gaming. The numbers didn’t explain that, because basically the AQ suggests it should be worth more than the CQ. But the CQ suggests it should be worth less than it generates. It’s already being monetized well. It’s fundamentally a high cost per hour medium: You’re going to spend $60 on a game. Then there are microtransactions, and there are other versions of how you get monetized.
But PC and console gaming are not really advertising-monetized channels. There are a bunch of reasons for that. One is the medium doesn’t really encourage it. We don’t expect to be playing a console video game and then get interrupted for an ad. There are now attempts to create native advertising inside games. There is now enough inventory if somebody really wants to invest, but you need the brand willing to invest. You need to know what budget it’s going to come from and how you’re going to measure it. You need agencies who know how to use this. You need the developers who are willing to have games contain advertising. And then you need the gaming advertising to be intrinsic and native enough to the communication channel that gamers actually accept it.
So, there are quite a number of systemic hurdles. But all of that leads to consumer payments at high-dollar numbers. We think it’s undermonetized from an attention point of view, even if it’s too expensive just by looking at the CQ. So, it’s a channel that I think we’ll see a lot happen in in the near future.
The impact of gen AI
Roberta Fusaro: How do you think about the use of gen AI nowadays?
Kabir Ahuja: On one hand, I think AI will enable an explosion of content. I also think AI’s going to reduce the cost of production, which has gotten incredibly expensive.
The broad base of consumers who will consume anything has gone up. The marketing costs of getting people to pay attention have gone up. The one thing that might go down over time is the actual mechanics of production cost and maybe the efficiency of marketing that to the right people. It might counterbalance some of the economics of professional content production. And hopefully, it’s all underpinned by the value of humans driving the AI with creative spirit.
It’s funny. Just as an aside, I did my degree in artificial intelligence, which is now 25 years old.
Roberta Fusaro: Amazing.
Kabir Ahuja: So, I actually have a piece of paper that says, “computer science focused on artificial intelligence.” And when I did it, it was complete theoretical math. It was the most painful thing because it was all just doing intense math. There was no real tooling. And my senior thesis was to create a camera that looks at a poker table and recognizes cards.
Roberta Fusaro: Wow.
Kabir Ahuja: And today, I think you could probably tell any of these LLMs to build that for you, and it would be done in about 20 minutes. It took us three months. But let me tell you some signals we see. User-generated content [UGC] on social video generates more focus than professionally produced content, which I found interesting as a finding.
Roberta Fusaro: Because we can relate to the creation of it?
Kabir Ahuja: I think there are a bunch of reasons. One is just circumstantial, I think, which is narrower groups of people find the UGC they like, and they buy into it. If I’m generating long-form UGC, my older son will sit there and watch hours of YouTube basketball videos because AI underpins this ability to generate more content.
And so you might see more focus-generated content, because AI creates things that are much more targeted in both short and long form. When I was at a game developer conference, I was sitting in the hotel lobby talking to a bunch of high-class developers. They moved their entire production studio outside of the traditional ecosystem into building on top of Fortnite and Roblox. They’re using lots of AI tools to create what they see as compelling experiences with high targets of engagement levels, focus, and love that their content will create.
What companies should focus on first
Roberta Fusaro: What’s one strategy that you’d recommend for advertisers or for content creators? Generally, how can they pick the right battles and capitalize on consumer attention?
Kabir Ahuja: For advertisers, I would look at this and say, “Can we match the message that we’re trying to get across? Tailor that across the portfolio but actually have attention in mind.” I’ll give you an example. If I’m trying to build a brand message or communicate something, how would I communicate that in mobile gaming versus a live event versus a connected TV?
Super consumption doesn’t equal super spending, but super attention does.
Maybe there’s one message that shows up in different ways. But recognizing that it’s going to go on a certain channel with a certain audience, do I understand how they’re paying attention and what will resonate with that audience? I think advertisers have a huge opportunity here.
And then for content creators, there are a lot of decisions to make, including green-lighting, acquisition, and recommendation strategy. Answering questions like, “How do I continue to create an increased amount of focus? Do I understand whether or not the focus of my consumers is going up or down over time? And based on what content? And based on what experience?” will help give more insight to content and delivery engine creators.
Super consumption doesn’t equal super spending, but super attention does. People typically say, “Who are my super consumers?” And they spend a lot of time thinking about who’s spending the most time on the platform. But that’s not the best indicator of who spends the most or who is the most valuable. It’s attention that drives that.
