We present a model to study the role of media formats in advertising communication. A media platform using content to attract consumers must decide whether and when to expose them to ads. A consumer must decide, given her limited attention, what to pay attention to at each point in time. Advertising can deliver a product match signal stochastically while the consumer is paying attention to the ad. Based on the platform's capability to control the consumer's attention, we classify advertising formats into three basic types: static, sequential, and interactive. We show how different formats tangle with two fundamental problems in media advertising: incentive misalignment between the consumer and media platform, and the platform's inability to observe the ad signal. The analysis identifies the conditions for the difference and equivalence between different advertising formats. For interactive advertising to be attractive to both the consumer and media platform, the ad needs to be sufficiently informative. In contrast, a moderately informative ad under an interactive format is equivalent to sequential advertising and thus entails a negative externality to the consumer. We discuss the implications for the evolution and management of media formats as well as for consumer welfare.
