Regulating the Attention Economy

| Daryl Wang | May 1st, 2018 |

What is something that everyone of us has with only a finite amount each day regardless of our wealth? If you think the answer is time then you are close, but not quite right. Time does not really belong to us, it passes whether we want it or not, so we cannot not truly own it. What we can possess and control, however, is our attention; it allows us to be productive, to learn, and to focus on the things that we love. Attention does not reproduce, we only have a limited amount each day, and once we spend it, we cannot take it back. Attention is scarce and it is valuable. Some people understand this principle and they try to harvest our attention as crops for sale.

In the book The Attention Merchants, author Tim Wu narrates the development of industries that “feed on human attention”. The history of commercializing attention established before the information age, originally formulated by Benjamin Day who started a newspaper publication The New York Sun in 1833. Day priced a penny for his paper, below his marginal cost, while his competitors charged six cents. His real customers are not the people buying his newspaper, but businesses that pay him to put advertisements on his paper. And in order to capture his readers’ attention, Day had journalists report sensational stories such as crime and gossip. As others newspapers followed his business model, fierce competition pushed newspapers to become more and more sensational. At one point, Day’s Sun printed a story on discoveries of life on the moon without any real basis. This piece of history draws parallel to modern clickbait, such as“She Drags a Plate Across The Water. What Happens Next Is Science At Its CRAZIEST”, in which businesses with advertising as revenue try to maximize people’s attention on a per unit basis.

Competition around people’s attention would be fierce not just because of other businesses but because of people’s limited attention span. In order to vie for attention, the centerpiece would need to be shocking, creating absurdities in the process.   

With the development of information technologies, and as we grew more reliant on them, advertisements become harder to contain. They are not only on the internet, but also in public spaces. Each advertisement costs us some attention that could be spent on some other tasks. This is not to completely deny the value an advertisement can offer. An ad can give consumers useful information about a product from which consumers benefit. The problem is that there is an excess amount of advertisements out there because advertisers do not pay for the attention they harvested. Since the attention costs are external in their business model, negative externalities are incurred by third parties that do not participate such as internet users receiving spams or an onlooker on the street grabbed by digital advertising displays.  

One solution to correct this inefficiency is to internalize the externalities and establish a trade in externality. The amount and value of attention can be hard to measure by a third party, such as the government. Therefore, a direct exchange between the advertisers and the consumers, who know the true (theoretically, at least) worth of their attention, would make more sense. The consumers would be compensated by the advertisers for the expenditure of their attention. On the other hand, even though the advertisers need to pay viewers for the consumption of ads, they can now know exactly the number of people who view their ads. If they were paying $5 million for ad space in order to reach 10 million people, they can now pay 50 cent directly to each customer who views their ads. There can also be a quiz at the end to test that the consumers indeed paid attention. Furthermore, advertisers are also given incentives to make higher quality ads since they would need to turn the viewers who want to make money by watching advertisements into customers who want to buy the products they are selling.  

Attention is a valuable and scarce resource that is often being traded neither fairly nor efficiently. The non-fungible nature and limited span of attention pushes merchants to go through extensive efforts, and sometimes dubious methods, to harvest our attention. This creates negative externalities along the way such as spam and clickbait. A direct exchange between advertisers and consumers can leave both parties better off. The consumers get paid for watching advertisements and enjoy higher quality content while advertisers benefits from a more targeted audience with a better understanding of the ads’ effectiveness.