Attention Economy

The value of our attention in a highly networked, global and consumer-driven world has become a commodity in the online marketplace. With the supply of online content outpacing demand, keeping eyeballs on screens has a value, which has manifested itself as an 'attention economy' (Goldhaber, 1997). Attention economies have a long history, but television provides us with perhaps one of the oldest models which still directly applies to the internet today. The free and widespread availability of television caused a conundrum for investors looking to profit from the medium. Whilst broadcasters couldn't derive direct monetary turnover for the distribution of television - it was available to anyone with the right hardware within broadcast range, and difficult to police -they could generate revenue from a captive audience via the sale of advertising time (Kahin & Varian, 2000).

Attention is transferable

Deferring attention from television shows on to periodic ad breaks shows that not only is attention valuable to many, but it's value is also transferable. The broadcaster of free-to-air television receives no direct monetary benefit from the attention of viewers. Only by economising that attention, selling it to someone who can generate value from it, does the broadcaster make money to pay for the production of the show.

Much of the web works on a model derived from this same theory. A social network or news website does not sell (in a monetary sense) a physical product or service. But by gifting its services, a network draws an audience which can be exchanged or sold for real money (Goldhaber, 1997). The site need not produce or sell an actual product to do this, but it must provide something to its audience which they perceive to be valuable. In television, viewers exchange their attention on advertising to receive entertainment from the main feature. On the web, this exchange may again be for entertainment, or it may be for a service which makes life easier or more enjoyable. eBay does not generate its own content - the content comes from its sellers. eBay and its sellers exchange attention in both directions, having long established itself as an enormous directory of products for sale and auction. Many of its sellers have smaller, but still important and valuable followings of their own. Many eBay sellers, especially in recent years, are shop owners who sell largely or even exclusively through eBay, and attention on those aspects of their business translates directly into eBay traffic. Conversely eBay, which doesn't sell or auction any products of its own, promotes items and sellers on its home page, advertising, and email notifications, transferring attention targeted at the eBay brand on to its selling community.

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Users are presented with similar items to their most recent purchase on the eBay home page.

Attention is valuable

The costs and consequences associated with losing customers in an information abundant economy are high. With so much choice on offer, customers will not stick around to tolerate irrelevant or uninteresting information (Iskold, 2007). Iskold (2007) believes that "the key ingredient in the attention game is relevancy". To be relevant, sites must know what their customers do. eBay pays close attention to the browsing history and buying activities of their customers through many avenues; product suggestions are displayed on the front page, emails with products matching a customers' past searches are sent out regularly, follow-up emails feature similar items to those the customer has shown interest in. At every opportunity, eBay attempts to pull in and direct the customer's attention towards more sales. This up-selling is a tactic often seen in physical stores ("would you like fries with that?"), but online, particularly in the dynamic environment of user generated content, the focus is less on getting customers to "upsize". Rather, keeping that customer in the store for as long as they can, exposing them to as many possible sales opportunities, is more lucrative than the small win. As suggested in the embedded video, Winning in the Attention Economy.

Winning in the Attention Economy


References:
Goldhaber, M. H. (1997, April 7). The attention economy and the Net. text. Retrieved from http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/viewArticle/519/440

Iskold, A. (2007, March 1). The Attention Economy: An Overview. ReadWriteWeb. Retrieved from http://www.readwriteweb.com/archives/attention_economy_overview.php

Kahin, B., & Varian, H. R. (2000). Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property. MIT Press.

Video - http://youtu.be/N73BRHko_gM

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