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The Attention Economy

March 05, 2007 | Internet Marketing

It is no secret that we live in an information overload age. The explosion of new types of information online is a double-edged sword. We both enjoy and drown in news, blogs, podcasts, photos, videos and cool MySpace pages. And the problem is only going to get worse, as more and more people discover the new web.

Things get more interesting when we realize that our attention crisis is not only our problem. It is also a big problem for news sites, blogs, search engines and online retailers. Our scarcity of attention hurts their economics. The web sites that contain content relevant to us have a big incentive to make sure that we find it. Consider this scenario. You navigate to a news site and start reading the headlines. What is the likelihood that you leave if you see an irrelevant headline? High. Another example. You go to Netflix and look at movie recommendations. What is the likelihood that you will stop browsing after Netflix shows you a movie you do not like? Again, very high.

When information is abundant, the false positives are very costly - they are basically deal breakers. Consumers happily leave sites, knowing there are a ton of alternatives out there. Unfortunately, this becomes a lose-lose situation, because if consumers rarely find satisfying experiences then retailers won’t get consumer dollars. The idea behind the Attention Economy is to create a marketplace where consumers are happy, because if they are shown relevant information - then retailers are happy too, because happy consumers spend money!

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