Attention is the key, but is it really an economy?
I realized that I’ve gone far too long in my life with far too little formal education about economics. You couldn’t have convinced my 16-year-old self that I’d ever be this desperate to really understand macro- and micro-economic concepts, theory and history.
And I’m not just talking about figuring out whether the Fed will raise interest rates.
Mathew Ingram isn’t the first to write about the “attention economy,” of course, but it’s 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 — or even worse, find themselves cut out of the attention economy altogether.
“Attention” 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 — both scarcity, and a relationship with the customer.
In this new world, content becomes a surplus and so it’s commoditized to the point where its value is minimal. Similarly, ad inventory grows geometrically as content pages proliferate, increasing downward pressure on pricing.
This is basic supply-demand economics. (I think.)
What I struggle with is substituting attention for content or CPMs — and isn’t 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 people’s 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.
What’s more, I have a hard time conceiving how we would monetize attention in the way that we’ve monetized adjacency and exposure to messaging. In the end, I think it’s results that advertisers pay for. They won’t pay for CPMs or time-spent-viewing if they aren’t getting qualified leads and conversions, ultimately.
I don’t think advertisers are more likely to spend money on a time basis than they are on impressions, I guess is my point.
I think “attention” 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 we’re talking about here, right?)
What the current winners named in Ingram’s article are really doing different is the context of the advertising — on mobile, anyway — in that it’s native. This starts to change the business model, but I think it’s 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.