Tinbergen Seminar – The attention economy

Digital advertising markets increasingly revolve around consumer engagement metrics, with platforms competing for attention through short-form video content. These strategies rest on the assumption that higher engagement proportionally enhances advertising impact. We challenge this assumption by testing whether greater engagement with video content crowds out attention to advertising. Using experiments with TikTok and YouTube Shorts users, we find substantial crowd-out: attention-grabbing video content significantly reduces ad recall. Our results also indicate an engagement-memory tradeoff when platforms choose the similarity of ad content to short-form video content: higher similarity increases engagement, but decreases recall, consistent with interference.