A Brief Intro to the Attention Economy
Back in 1830s New York, there was a new competitor on the block. The New York Sun took a novel approach to publishing — rather than charge a steep six cents for informative, high-quality news, they sold a paper with trashy, eye-grabbing stories for just a penny. Their strategy: take a loss on the product in exchange for high viewership, then get advertisers to pay for a spot on the front cover. The strategy was so successful that the New York Sun took off and penny journalism soon became a major force in American society.
The New York Sun’s model of selling something for unfeasibly cheap and relying on advertisements for revenue is a first principle of the attention economy. The product, a newspaper in this case, is economically valuable as a medium for advertising, or the act of drawing attention to promote some company’s sales. The reader is no longer the customer; rather, their advertisable attention becomes the product, auctioned off to the highest corporate bidder. Attention economics mean that the more attention you capture — the more people you have looking your way — the more money you make.
While the primary medium for attention has changed from paper to digital, the economics have remained the same. Today’s largest companies like Facebook, TikTok, and Netflix owe up to 98% of their revenue to selling people’s attention to advertisers. Taking advantage of the smartphones in our pockets and the TVs in our bedrooms, they are both a super convenient source of amusement and information for individuals and a super attractive source of advertising for corporations. Each app makes their billions by competing with one another to draw in our attention and show us as many advertisements as possible.
What’s so bad about apps competing for our attention? This idea might seem harmless at first, but a whole slew of social problems are attributable to the attention economy’s greater incentive structure. Incentivized to show you as many ads as possible, social media companies try to maximize the time users spend by designing their apps to be as engaging as possible. In terms of immediate GDP growth, the economy does better when a student distractedly uses Snapchat while doing homework than if they turned off their phone and focused. In order to compete for clicks amidst an abundance of information, newspapers resort to producing eye-catching and sensational journalism. The incentive structure of the attention economy, combined with a myopic focus on boosting traditional economic metrics, leads to empirically rising anxiety, distraction, and low-quality news. Indeed, we are economically worth more on our phones than with our friends, distracted than focused, and misinformed than informed.
In order to mitigate these negative byproducts of today’s technology, we need a shift away from the attention economy and towards a new incentive structure. Like mothers always tell their children, anything that seems free still comes with a cost. It’s time we wake up to the social costs of the “free” business model and imagine a world where a company’s best interest is truly aligned with yours.
