Attention is the key, but is it really an economy?
I realized that Iâve gone far too long in my life with far too little formal education about economics. You couldnât have convinced my 16-year-old self that Iâd ever be this desperate to really understand macro- and micro-economic concepts, theory and history.
And Iâm not just talking about figuring out whether the Fed will raise interest rates.Â
Mathew Ingram isnât the first to write about the âattention economy,â of course, but itâs becoming increasingly clear to me that the topic merits more, well, attention.
The underlying principle is simple: Where the attention goes, the money will inevitably follow. And right now, the attention of a large chunk of the population is being diverted away from traditional content and information channels, and platforms like Facebook and Google are busy vacuuming it up. Many existing media and content companies face a future in which they are just suppliers to these platforms â or even worse, find themselves cut out of the attention economy altogether.
âAttentionâ is the label that helps contrast a business model built on impressions, and the world we increasingly find ourselves in, where economic forces make that model less and less viable.
This traditional business model also has as a key component a distribution channel that is owned by the producer (of content, in this case) and provides exclusivity â both scarcity, and a relationship with the customer.
In this new world, content becomes a surplus and so itâs commoditized to the point where its value is minimal. Similarly, ad inventory grows geometrically as content pages proliferate, increasing downward pressure on pricing.Â
This is basic supply-demand economics. (I think.)
What I struggle with is substituting attention for content or CPMs â and isnât that all this is, a substitution?
Yes, attention is finite. I only have so many minutes a day to devote to anything and, in a vacuum, increasing demands on my minutes makes their value go up.
But my first observation is that peopleâs daily minutes with digital media in total is on the rise. This has an upper bound, sure. But when the world transitions to screenless media, as it surely will, I suspect that that upper bound will approach our total waking hours in a day.
Whatâs more, I have a hard time conceiving how we would monetize attention in the way that weâve monetized adjacency and exposure to messaging. In the end, I think itâs results that advertisers pay for. They wonât pay for CPMs or time-spent-viewing if they arenât getting qualified leads and conversions, ultimately.Â
I donât think advertisers are more likely to spend money on a time basis than they are on impressions, I guess is my point.
I think âattentionâ is maybe just a proxy for the really valuable thing: behaviors. Do they use your app? Do they use it every day? Multiple times a day? (That is, really, what weâre talking about here, right?)
What the current winners named in Ingramâs article are really doing different is the context of the advertising â on mobile, anyway â in that itâs native. This starts to change the business model, but I think itâs really just a matter of degrees of difference for users. A native ad on Twitter or Facebook is only slightly less annoying than an adjacent display ad.
We can test this hypothesis if the ad-blockers that will soon start landing on iOS figure out how to block these native ads.