The Economics of Attention
The other day at lunch, in the course of a discussion on startup business models, a friend of mine remarked that advertisements were sneaky, evil little things, that stole your time and sold them to someone else. Turns out, he was particularly miffed by the number of ads on FM Radio. I had stopped listening to FM Radio altogether precisely for that reason, so I could sympathize. And a decade ago, I would have nodded in agreement, and the discussion might have moved on. But GOOG’s recent peak market cap was on my mind (it surpassed AAPL briefly to become the world’s most valuable company). Their $21B income last quarter was almost entirely from search advertising. This notion, that advertising is somehow inherently unethical, if not immoral, definitely needed to be examined some more.
However, I wasn’t happy with the arguments on offer: they cause you to think thoughts or be possessed of feelings that are counter to your best interests, they grow ever shriller in a race to the bottom, wouldn’t it be better if people just paid for content…
Surely people recognize advertising for what it is and are allowing themselves to be influenced only to the extent that they want to be. And to the extent that the product or service that is being advertised is harmful to the consumer or society at large (alcohol, tobacco, firearms), it would suffice simply to tightly regulate, perhaps even outlaw, advertisement of only those products.
Besides, where is the data, the hard evidence, that advertisements have resulted in actual harm to the non-paying public? Do we have any studies showing that, other things being equal, lower levels of exposure to advertising leads to, for example, longer life spans or lower incidences of cancer or greater accumulation of wealth in individuals?
A quick Google search led me directly to Thomas Wells’ blog, and I instantly recognized the case that my friend had been building up to. Here was an analysis of the situation in purely economic terms that purported to uncover what was really going on. Head on over and read the piece. (The same piece, or variants of it, have also appeared in 3 Quarks Daily and ABC. The comments under the ABC article are also definitely worth a look. There is also an apparently unrelated article on NY Times that makes a similar case.)
Not only does Mr. Wells provide a coherent analysis of the situation, he offers a framework for public intervention to right this wrong. Convinced yet?
I wasn’t.
Let’s begin at the beginning. Mr. Wells starts off with a bold statement:
Advertising is a natural resource extraction industry, like a fishery. Its business is the harvest and sale of human attention. We are the fish and we are not consulted.
If you buy this, you have to buy most of what follows. What is the natural resource the advertising industry is supposed to be extracting? Our attention. But in what way is our “attention” similar to coal or crude oil or the fish in the sea? Wikipedia defines a “natural resource” as “ all that exists without the actions of humankind,” but surely “human attention” cannot exist without some form of “human action” — presumably some type of action on sensory inputs that happens within the human brain.
The Tragedy of Analogy
Clearly we are meant to read this as an analogy and view “our collective attention” as possessed of properties similar to natural resources, conventionally defined. And in some sufficiently specific and narrowly defined way, perhaps it is like a natural resource (although I seriously doubt it). You would expect to be told at this point about what those similarities are, but Mr. Wells brushes right past that impediment and invites you at once to agree that this “resource” is open for exploitation just like any other natural resource, by a purely mechanical/industrial process such as mining or fishing. This is a patently absurd statement: how can my attention be taken away from me without my active participation? (Hint: Because your attention is like coal or crude oil or the fish in the sea. QED)
After hand-waving away this spurious analogy, the subsequent analysis can draw freely from economic ideas relating to husbandry of natural resources: over-exploitation, the tragedy of the commons, inefficient pricing, and the resultant need for regulation or licensing in the greater public interest. None of this stands in light of the incorrect comparison.
Advertising as an industry is closer to other creative arts like writing or poetry or painting. A person in this profession is a thought worker, unlike someone who works, say, in a coal mine or an oil rig. If what an advertiser does is “steal” your attention, it can equally well be argued that an architect stole your attention with a striking design for a building that happens to be visible from where you live or work. (“Here I was taking a walk and had to stop and stare for a full minute! How can they allow this?”) Or that a political commentator on TV “stole” your attention by arguing a political point with which you happen to disagree. (“I just wanted the news didn’t I? Isn’t that what the program promised?”) In fact, if this argument stood, it will equally well apply to any situation where you are exposed to any novel cultural artefact without your explicit prior permission. (“Please note that by watching this program/reading this book/listening to this music you may be exposed to the following ideas/concepts/jingles that you subsequently wish you had not been exposed to...”)
Just Recompense
The second problem (actually, the first of the two problems Mr. Wells enumerates in his article) is that “ advertising imposes costs on individuals without permission or compensation.” The argument here is that individuals value their own attention, that their attention is in short supply, and that individuals have a right (subsumed under or deducible from the right to liberty) to “spend” this attention without interference or trespass from any other party, and finally, that advertising, by its very nature, and irrespective of its content, causes the individual to involuntarily “spend” his attention, whereupon the advertiser may seize it and use it to his own devious purposes.
Let’s keep aside my main objection (that there is no way your attention can be taken away from you without your full and willing participation). Let me grant for the moment that your attention is just like your kidneys. That I could spike your drink, get you comatose, and after a simple surgical procedure, leave you in a bathtub full of ice, whole except for a gaping hole in your subliminal self where your attention once was. Would this argument for compensation then make sense? Perhaps the kidney analogy is not quite right. Maybe we should think of attention as if it were a hormone we secrete, such as adrenaline or testosterone. You could make and spend more or less of it on any given day depending on the circumstances you happen to face on that day, and its production imposes a proportional energy cost on you. Even if this were the case, the basis for demanding compensation from an advertiser for appropriating your limited supply of attention remains dubious. Allow me to illustrate.
Imagine yourself in your living room, fiddling with your smartphone, answering your messages, while the sports commentator drones on from the TV in the background. There’s a commercial break. and you are subjected to two different Ads. One about a product A you don’t care about,so you barely look up. The second about a product B that you were actually looking to buy, so you immediately perk up and give it your full attention. Now, according to Mr. Wells, both the makers of A and B owe you money. But wait, there’s more! Makers of Product B owe you more money than those of Product A. Sound intuitive?
By this logic, if a company plays the same commercial over and over again, they ought to pay you less compared to a company that varies their commercials each time in new and interesting ways. More of your attention gets stolen from you, after all, due to the novelty of each commercial in the latter case.
The logic turns weirder when you consider search advertising. You search for information on “tomatoes” and are presented with an offer to buy a kilogram. You barely register this (you were looking to copy-paste its biological name into your report, not to buy some). But for having shown you this Ad, and stolen away part of your precious attention, GOOG owes you a $1. The next time you search for “tomatoes” you really are looking to buy some. So you read and click through that ad offering them at Rs.1/kg. You spend a while looking through the website and figure they don’t service your area. You just wasted a lot more attention on this than the last time. GOOG ought to pay you $10, right?
Politics of Outrage
It is not my claim here that Advertising is of great benefit to society, or that it is without any faults, or that it has to remain beyond the reach of public policy or regulation. It is simply that I find any of these broad-brush moralistic/ethical arguments unconvincing. We seem to be begging the question, doubting our own free will, even as we try to protect it from these supposed evil predations. But what use is our free will if it cannot withstand such an onslaught? Perhaps we didn’t posses it in the first place.
We could (and should) inquire to the specifics of the matter and evolve thoughtful policies that balance interests of all parties in equitable ways. Perhaps evolve a policy that defines and regulates noise and visual pollution in our public places. We could debate the implications of paid news and conjure clear rules that help guide readers. We could push our regulators to get better, and better incentivize them, to spot and deal with false and misleading claims. But these are boring policy matters and we are not bureaucrats here.
The only reason we are interested in this matter at all is that we are upset at the level of commercialism around us and we think someone ought to do something about it.
Politicians Syllogism
Premise 1: Something needs to be done!
Premise 2: This is something.
Conclusion: This needs to be done!
