Is our attention the most important currency of the digital economy?

What is the most important branch of the modern economy? Looking at the largest American companies on the S&P 500 list, eight out of the top ten are tech giants, including the big five - Apple, Microsoft, Amazon, Alphabet, and Meta. It is said that we live in a digital economy, and the spread of the internet was one of the biggest technological breakthroughs in history, on par with Gutenberg's printing press or Edison's light bulb. And the most important currency of this new economy is our, human, attention. At least that's how the attention economy - the economy of attention - makes us look at the world.

With the spread of the internet, the entire global economy began to transform, to digitize. First, this happened through PC computers, largely thanks to Microsoft. Later - on smartphones, which in their modern version were invented by Apple, and now over 6 billion people, almost 85% of the global population, own them. The retail industry was transformed and digitized by Amazon. In turn, Google made unlimited access to useful information possible. Finally, our social needs were taken over by social media, especially the platforms created by Meta, Facebook and Instagram, which are used by over 3 billion people.

Everything, everywhere, for free

Content available on the internet has been free from the very beginning. Partly because traditional paper media publishers didn't initially see the internet as a big threat, and partly because most of them assumed that on the internet - just like in traditional media - the main source of revenue would be advertising.

In the nineties, when we connected to the network via modem, used the inefficient Altavista search engine, and mobile internet was the size of a postage stamp, few in the media industry had the imagination to bet on the internet as the medium of the future. After all, a fairly simple and lucrative business model was working well at the time, which seemed very easy, if necessary, to transfer to the internet. Because after all, you would be able to sell ads on your own website through your own sales office. In 1999, everything looked more or less like this, with print advertising still accounting for over 30% of the advertising pie, not much less than television, and the internet only about 1%. Even more money went to classified ads, so-called yellow pages, than to the network, about 2%.

However, even then, technology companies began to appear that were to take over the internet. Google was founded in 1999 and Facebook in 2004 - companies that based their entire business on the network. On the other hand, technology, which after all was the internet, was a much more natural environment for traditional IT companies, such as Apple and Microsoft, than for media companies. Few of the then existing companies were also able to look into the internet future as far-sightedly and optimistically as the newly emerging startups. A good example is Amazon, which became the second largest retailer in the world, even though when it was founded, in 1994, there were only 10-15 million internet users in the world.

Strictly internet companies, i.e. Google (now Alphabet) and Facebook (now Meta) entered the already established paradigm of free services and adopted advertising sales as their business model. Both of these companies grew very quickly, among other things, because they efficiently met the most basic needs of end users, as they provided knowledge and information, connected and ensured contact, navigated in this new wonderful world.

Both of them, unfortunately for traditional media, adopted a business model based on advertising sales. However, they achieved a level of precision - targeting - never available before and offering advertisers completely new possibilities. Google introduced the AdWords advertising system in 2000, i.e. search engine ads targeted at keywords, perfectly meeting the user's immediate need. On the other hand, Facebook with its Ads system introduced in 2007 knew more about its users, then 20 million, than any "traditional" ad seller. Thus, both Google and Facebook very efficiently met not only the needs of end users, but also their customers, i.e. advertisers.

Economy of attention

Advertising, i.e. information combined with a persuasive message, has always preyed on our attention. Illustrated magazines sold the back page for the most, television advertising was the most expensive in prime-time, and the most expensive outdoor advertising space was on Times Square. However, the ubiquity of the internet and smartphones has taken the battle for our attention to a whole new level.

The term attention economy was created in the early seventies of the twentieth century by psychologist and economist Herbert A. Simon, who already then felt bombarded with information from all sides. However, thinking about the economy in terms of managing our attention gained momentum with the development of the internet and smartphones. Currently, attention economics is an approach that treats human attention as a scarce commodity.

"Attention is a resource - a person only has as much as is available" - these are the words of Matthew Crawford from the University of Virginia, a scientist dealing with the economy of attention.

The day only has 24 hours, and people spend an average of over 3 hours a day with their smartphones. The advertising industry, represented by the world's largest companies such as Alphabet and Meta, is keen to ensure that this time spent on their platforms is as long as possible and to use it as effectively as possible. In other words, to make as much money as possible from our attention. So when talking about today's economy, the attention economy is an integral part of it. Because technology probably exploits our attention more than ever in history, and the whole paradigm of using a smartphone, one of the most important items used by over 85% of humanity, is to capture our attention as efficiently as possible.

It's no coincidence that the dot next to the app icon on the phone screen is red, because it's the color that stimulates the human mind the most. It's no coincidence that almost every app wants to send us a sea of notifications, and finally, it's no coincidence that a "clean" Instagram account suggests flashy, easily digestible content full of celebrities and beautiful bodies.

Digital economy monetizes attention

Almost every popular app fully utilizes the knowledge contained within the theory of attention economy. Advanced algorithms, increasingly based on artificial intelligence, try to filter and select content so that we spend as much time with them as possible. Emblematic of this process is TikTok, where engagement and the attention of users directed at specific video materials matter the most. TikTok suggests short materials, because they do not require a lot of engagement from users, but each viewed material makes the next one even more precisely selected. The effect is staggering - the average TikTok user spends 95 minutes a day on it.

Well-designed apps - of course from the perspective of the attention economy - apply a whole host of solutions aimed at retaining this attention for as long as possible. The most obvious ones include, for example, infinite scroll, i.e. the fact that the content in the feed or on the main page never ends - there is always something further that might catch our attention. Another example is the automatic playback of the next video material matched to our preferences. Another is so-called loot boxes, i.e. boxes in games containing random, virtual items. Some of these tricks are so effective that a person without specific tools and knowledge is unable to defend against them. It is in response to these challenges that Android and iOS system manufacturers have introduced tools such as Digital Balance and Screen Time.

Mechanisms that are designed to increase our engagement and glue us to the screen can of course be used for noble purposes. A number of techniques of this type, including gamification, are used by, for example, Duolingo, which facilitates language learning, or Spotify, which tries to select playlists that expand musical horizons as part of the Discover this week function. However, the main battle for our attention takes place on social media, because that's where we spend a lot of time, which can be monetized in various ways. There, unfortunately, it is easiest to break through with a loud and controversial message. Just look at the kind of content that fills Facebook, Instagram or YouTube, if the materials most suited to the interests of a given user run out.

The race you have to participate in, or business in the age of attention economy

And how does all this translate into business, and what to, nomen omen, focus on, thinking about the modern economy in terms of attention economy?

Given that today's business activity is largely based on the attention economy, when creating any product or service, you need to be aware of this and remember that users' attention is already sufficiently "sucked in" and exploited by the flood of information and engaging applications. It is also no secret that the so-called attention span, the range of attention, is getting shorter for subsequent generations.

A good business strategy seems to be not to follow the path to attract as much attention as possible, but only as much as is needed to achieve your business goal. Therefore, when creating your product or service, it is always worth having in the back of your mind the limited resource that is the attention of a potential customer. A good example here is the e-commerce industry, where, apart from platforms such as Allegro or Amazon, only those stores that make the purchase process as easy as possible count - both through good design and a smoothly operating backend. Often it is not the price that determines that customers will choose a particular store, but the fact that they will be able to make a purchase in the most trouble-free and intuitive way, i.e. one that requires the least amount of their attention resources. 

And what about creating applications? Why would users install them at all? They will only decide to do so if the applications easily, quickly and without problems meet their needs. According to data from the VC fund Andreessen Horowitz, applications lose an average of 77% of users after three days, and as much as 95% - just after three months. The first days of use are the most critical. People using applications simply do not have enough attention resources to even remember most of the tools on their smartphones. That's why the so-called focus - a very clear and clear definition of what the purpose of the application is - and then strict pursuit of this goal are so important in the age of attention economy.

Even industries that seem very distant from media and the internet are forced to participate in this race for attention. LEGO not only produces blocks, but also computer games, series, and even full-length films. In addition, it is very active on the internet, among other things through cooperation with influencers, those who like no one else can use the potential dormant in the attention economy.

Another example is IKEA. In traditional stores of this chain, customers have to go through a whole maze of corridors to get to the checkout, assuming that the more time they spend in the store and the more shelves with products they pass, the greater the chance that the value of their baskets will increase. But this is changing too. IKEA decided to enter e-commerce very late, only around 2010 (for reminder - Amazon was founded in 1994!), and expanded its online development strategy only in 2014. Today you can shop online at IKEA easily and quickly, but even traditional stores are undergoing transformation - for example, you can now enter directly into the self-service part of the store, bypassing the entire space with interiors furnished with IKEA furniture.

Attention economy and users

And what can an ordinary user do? First of all, be aware that in the era of the attention economy, our attention is as valuable as probably never before. Therefore, it is worth nurturing it. The most helpful in this can be appropriate habits related to digital hygiene. This includes using the already mentioned solutions, such as Digital Balance and Screen Time, enabling time restriction for using applications, turning off most notifications or switching the phone to black and white mode. Because these attention-grabbing mechanisms, exploited by the biggest players in the industry, are so effective that a user without using external tools and developing appropriate habits is in a losing position.