The Attention Economy: A New Hotbed for Investors & Entrepreneurs
Human attention is among the world’s most valued resources. Increasingly it appears as though a much needed correction is right around the corner. This could mean a massive opportunity for the right investors and entrepreneurs.
Every time your phone commands your attention, you feed a massive economy. We call it the Attention Economy.
Right now, it’s an economy where a small few have made out fairly well — but the moment is ripe for a new crop of investors to grab their share and watch it soar in value.
For the better part of a century, this economy’s life blood has been antiquated metrics, addictive technologies, and delinquent regulation.
But change is in the air. And this change is well poised to be a money maker for the forward thinking investor.
Winter Is Coming
Major shifts are happening in advertising, and we’re just at the beginning of this change.
On the surface, all seems well. At least if you look at the latest gangbuster earnings reports for advertising-based platforms like Google, Facebook, and Amazon. These are the companies that have a stranglehold on the world’s attention — or at least that’s what they’d claim.
But if you dig deeper, it’s clear something is awry. Companies like Facebook, Snap, and Youtube were once in daily contests how many billion video views each was hosting in a given day, and competing over how much data they had.
Have you noticed they’ve gone silent?
Increasingly, having billions of views has been exposed as a meaningless “vanity” metric by brands and media companies. Platforms like Instagram and Twitter are purging fake users, no longer (at least publicly) racing to inflate numbers, which has investors “spooked.”
Nobody wants to call too much attention to how little attention they actually command.
Fake companies and fake views run rampant on the internet as reports find that a whopping 40% of the web’s traffic comes not from human eyeballs, but from bots. Rob Leathern, who monitors Facebook’s $40 billion a year ad platform issued the warning shot: “Winter is coming. They may get away with it for a while, but the party’s not going to last.”
The way the world counts and values attention has to be completely rethought. As the market reevaluates how it counts and values attention, the companies that get it right will be well-positioned to grow and their investors will profit handsomely
The Tip of the Iceberg
Once boasting about their ‘big data’, tech giants are now realizing the reputational dangers inherent in talking up how much consumer information they’re storing without consumer knowledge.
After staying quiet for years, regulators’ eyes are wide open to the perils of rampant consumer data collection by tech firms. The EU led the way with the rollout of the year old General Data Protection Regulation act. The US is gradually following suit, with the upcoming California Consumer Privacy Act. And Facebook is bracing to pay a hefty fine to the Federal Trade Commission to the tune of up to $5 billion over its data privacy scandals.
Indeed, how companies buy and sell and manipulate consumer attention has become a mainstream issue — one politicians are eager to embrace. Presidential candidate Sen. Elizabeth Warren has called for tech giants to be broken up, and Sen. Mark Warner has issued a list of potential regulations aimed at making the attention economy a sustainable one.
Some companies are already feeling the impact of GDPR on their bottom line. European ad tech company Sizmek for example recently declared bankruptcy, a likely result of needing to comply with basic GDPR laws coupled with the emerging trend of marketers demanding more transparency into their ad metrics. Dan Wilson, CEO of the London Media Exchange noted, “As unfortunate as the Sizmek situation is, I fear it is the tip of the iceberg.”
This shift in the market shouldn’t alarm investors. Rather, the commercial opportunity here for investors and entrepreneurs is to build companies on the backs of real measurement of media, sustainable revenue models, and ethical (yet commercially viable) uses of genuine human attention.
Conversations between Wall Street and Washington are happening daily, and there are a myriad of best practices, great ideas, and creative solutions being exchanged. The attention economy creates an unprecedented opportunity for both the public and private sectors to collaborate on regulation that makes cultural sense while encouraging innovation and commercial achievement.
Consumers Are In the Market For a Digital Cleanse
The last decade saw a boom in the health and wellness market, and we’re beginning to see that consumer demand trickle into the attention economy.
Health experts, consumer advocates, elected officials and consumers are all starting to evaluate the role mobile technology and social media — the centerpieces of the Attention Economy — play in their overall wellbeing.
The conversation around humane technology is becoming front and center in a number of spaces.
In family circles and pop culture, special reports like the one recently hosted by ABC’s Diane Sawyer are examining the dangers of too much screen time, and making us aware of shocking statistics about the increasing rates of lonliness, depresion, and teen suicide.
In corporate circles, prominent tech executives are now voicing their own worries and regrets, like that of former Facebook executive Chamath Palihapitiy over having worked on technology that in his opinion had begun “ripping apart the social fabric of how society works.”
Simply put, consumers are recognizing the health impacts of the attention economy, and demanding healthier alternatives. Companies that optimize for health and wellbeing at the intersection of the Attention Economy may very well be emerging leaders in this new corner of the industry.
The Bottom Line
Given a market correction feels increasingly imminent, there’s a monster opening ahead for those who can capture attention, and even better, for those who can accurately and effectively quantify it for the new digital world.
Brands are always going to need ways to connect with consumers. And they’re eager to cast aside numbers that don’t matter, or practices that don’t respect their customers. They need better, more honest ways to create strong, loyal audiences and create sustainable revenue models.
This confluence of events presents a massive market opportunity for the right businesses, the right entrepreneurs, and the right investors to rewrite the rules of Attention.