Attention economics will reshape business economics. It is not just a question of re-thinking marketing, but re-conceiving business. Yet, with a few notable exceptions, we are only at the very early stages of mapping out what attention economics means, much less what its implications are for business.
As I have written about here and here, attention economics starts with the observation that, as products and information proliferate, attention becomes the scarce resource – we each have only 24 hours in the day. Where we choose to allocate this attention will increasingly determine who creates economic value and who destroys economic value.
To my knowledge, the first person to highlight this phenomenon was the Nobel prize winning Herbert Simon in an article published in 1971:
...in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.
Unfortunately, Simon never really developed this insight further. Michael Goldhaber picked up this theme and developed it significantly and provocatively in a seminal on-line article "The Attention Economy and the Net" published in First Monday in 1997. At the time, he indicated that he intended to write a book on the subject but, alas, the book has yet to appear. Independently, Georg Franck, an Austrian professor of city planning, published an article in 1999 on “The Economy of Attention” that picked up on a number of the same themes.
In the meantime, two books have been published on related subjects. My friend and former colleague Tom Davenport wrote a book with John C. Beck in 2001 called The Attention Economy: Understanding the New Currency of Business. While providing very interesting perspectives, the book focused much more on management techniques rather than taking on the task of mapping out a more systematic view of attention economics.
So, I was quite excited when I came across a book called The Economics of Attention: Style and Substance in the Age of Information by Richard Lanham, a professor emeritus of English at UCLA. I hoped that we might finally see a systematic exploration of attention economics, made all the more refreshing because it came from someone outside the profession.
The book is a fascinating exploration of the dynamic that exists between stuff and fluff – physical goods and information about physical goods. Lanham’s basic thesis is that, in an attention economy, stuff recedes in importance and fluff increases in importance. Any book that can draw connections across the Dadaists, Gregory Bateson and Friedrich Hayek is well worth a read. In Lanham’s perspective, rhetoricians and artists like Andy Warhol and Christo are the new economists of attention. Yet, I left the book feeling dissatisfied – I did not yet see any systematic exposition of the economics of attention.
In a recent review of Lanham’s book, Michael Goldhaber gives voice to my dissatisfaction:
One of the consequences of the intensive mathematization of standard economics is that a humanist like Lanham is utterly snowed. He wears his innumeracy on his sleeve, and so declares repeatedly that he cannot be a “real” economist. . . Nonetheless, certain economic thoughts, not requiring mathematical sophistication, still ought to be considered for possible relevance in discussing a new economy. Lanham fails to make the attempt.
We can try to pin down something of what a simple “attention transaction” is, and what it means to pay attention in the first place. We can talk about what makes attention scarce, what makes it desirable, how it can be used to obtain various sorts of wants, how one person may channel or divert the attention of another, how attention is multiplied by having an audience, what causes people to pay attention to a particular other person in the first place. We can try to understand larger chains, networks, or loopings of attention, as it passes, say from person to person. We can view the entire economy, or some large subset of it as a system, and try to show how people respond to relative scarcities of attention and how they might be attracted to those who have lots. And so on. An economics of attention should encompass any and all of this.
Reading Goldhaber’s review confirmed my view that Goldhaber is still the best candidate to map out the economics of attention, even though I disagree with some of his early formulations that seem to suggest that attention will become a currency that will replace money. The good news is that Goldhaber has posted a draft of one of his chapters of his long-awaited book The Emerging Attention Economy on his blog. I strongly recommend this to anyone interested in the topic.
While his work is too rich to summarize easily here, I wanted to pull out some key points that I think makes Goldhaber’s approach so promising:
- Unlike many people who have written about the relative scarcity of attention relative to information overload, Goldhaber never loses sight of the fact that attention is ultimately about the connection between people, as illustrated in the following quote
In paying attention to the words, then, we are actually paying attention – as best we can – to the person who seems to have uttered them . . . This suggests that the prime purpose of words is to make possible this kind of connection between people.
- Goldhaber appears genuinely intent on mapping out a systematic set of economic principles that will shape where and how value gets created and captured in the attention economy
- Goldhaber also avoids the trap of viewing attention as a commodity – “Commodities are usually standardized, more or less generic things or substances that can be bought and sold in measurable amounts. None of this holds for attention.”
In fact, Goldhaber is close to viewing attention as a flow, rather than a stock – something that must continually be refreshed, if it is to be maintained. One can only continue to attract full attention if one offers something new along the way.
Goldhaber’s rich view of attention as an “aligning of minds” helps to make it clear that the multi-tasking and continual partial attention that many digerati believe will reduce attention scarcity is at best a weak remedy. His perspective helps to explain why, as Linda Stone has suggested, full attention will become the new aphrodisiac.
In reflecting on what I have seen of Goldhaber’s work, there are some areas that I hope he will develop in much more detail:
- Right now, Goldhaber’s writing seems focused on the consumer sphere and, as a result, the connection between attention and talent development is much less explicit than it could be – the bottom line is that attention becomes critical for production/creation and not just consumption, as I have briefly suggested here and here. It also helps to explain why the demand for attention will rapidly increase while the supply remains limited.
- Goldhaber’s perspective on attention provides an interesting lens to view the distinction between transactions and relationships and I hope he will explore this distinction in greater depth. One important way to amplify the value of attention for all parties is to build relationships.
- Goldhaber makes an interesting observation that “the norm in attempts at getting attention, the sine qua non of this new economy, are more in the line of self-revealing than either self-concealing or merging into some mass.” I hope he develops this theme more – it will help to draw together a broad range of phenomena including the demand for more corporate transparency and the success of social network sites in creating more visibility for its participants. Transparency may paradoxically become an increasing requirement for visibility.
Now, for most executives, this can seem like a pretty abstract discussion without any clear relevance for near-term actions. That impression would be a mistake. The attention economy is surfacing around us today – it is not some distant future. As with most economic trends, those who spot them and act on them early are most likely to create significant value. Here are some early action items:
- Explore the implications of attention scarcity for firm structure – I view attention scarcity as a key catalyst driving the unbundling and rebundling of firms that is occurring on a global scale
- Master the management techniques required to increase return on attention, not only for customers but for employees and business partners as well
- Create mechanisms to help customers and employees attract the attention they need to become more successful in their endeavors, especially in terms of their talent development.
We don’t yet have a road map for all of this, but some of the early paths are starting to become visible.