Attention Economics - Literature review Example

Attention Economics Name Institution Introduction Attention economics describes a management approach to information management that perceives human attention as being a scarce resource and, therefore, engages economic theory to resolve issues related to gaining and sustain the attention of the target audience. In brief, the human attention is a resource that should be managed because of its innate scarcity. Georgy (2008) also defines attention as a fixed mental engagement on certain information item. In fact, a person becomes aware of an item, and attends to the item before deciding on whether to act. Giving attention to an item requires screening out many external impulses before linking the attention with the process of decision-making. Hence, when the elements of action and decision lack, then there will be a missing link to the attention process. According to Humphrey and Kozinets (2009), because of the increase abundance and accessibility of information content, attention has become an inhibitor to information consumption. This essay argues that the idea of ‘attention economy’ is crucial for understanding the existing relationship between a company and its customers when it comes to advertising. However, it places adequate emphasis on maintaining the customer’s attention rather than gaining the attention. Strengths Attention economy has gained significance in scholarly researches due to the proliferation of the internet and focus on the time dimension of information overflow (Garrouste, 2015). Clearly, the rise in blogging and the prevalence of social networks, such as Twitter and Facebook, during the recent past indicates how attention has transformed into a critical economic resource because of its strengths (Berman, 2002). Creates an active customer base Attention economy gains and sustains customer’s attention by making them more active. The digital age has brought about a competitive thrust by making the customers to be more active, than passive. As well, it has changed the value chain by allowing customers to determine or confront the businesses, where through technology like the social media, customers today speak with an active voice (Humphrey & Kozinets, 2009). Hence, within the domains of attention-based economy, the customers consistently seek to influence the businesses in order to get the value they believe in. Within the media industry, the brands migrate from providing the audience with products and services to providing them with experiences. Hence, power shifts from buying the attention of the customer by providing entertainment to the customers to generating their attention, as well as to influencing the customers in order to influence the attention of others (Huberman & Wu, 2007). For instance, because of the dynamic nature of technology, a company like Apple Inc increasingly witnessed an elemental shift in the manner in which customers access, value, and allocate attention to their ads. Hence, their ads must be based on what consumers need. This also implies that Apple should not perceive customer’s attention to be a commodity. Rather, it should view their attention as an economic resource that is inherently scarce and, which they will need to activate (Georgy, 2008). For Apple, therefore, a cost-effective customer interaction is that offering a direct link to the consumers. In such a situation, Apple needs to invest in activities that allow it to interact with the customers, and keep them engaged, such as by interacting with them using the social media to understand what the customers want. This also implies that when it comes to attention economy, having ownership of advertisement channels is insignificant. The objective of the advertising should, instead, be to interact with customers in order to know what they want, to maintain their attention (Geru et al., 2008). Creates greater sales opportunity Gaining and maintaining customer’s attention creates greater sales opportunity. The underlying significance of attention economy is its potential to create marketplace where customers consent to receiving services in return for their attention. The aim is to sell something to customers, although the transaction may not be necessarily direct or instantaneous (Berman, 2002). For instance, BBC’s news feeds summarise the key ideas being broadcast. In return, the feeds request for the attention of the customers in return for a chance to present to them advertising content. Again, some internet applications like Google and Yahoo! have implicitly or explicitly considered attention economy in their user interface design, rooted in the realization that when a user takes too long to find something, they are likely to look for an alternative means. This may be enabled through creation of filters, which ensures that the first information content viewed by a user should be relevant. Google operate on a similar concept as that of the BBC newsfeeds. For instance, Google only shows ads in return for assisting the internet users to locate information on the internet (Georgy, 2008). Hence, it should be noted that the principle constituent to attention economy is relevance. Provided that a customer views relevant content, she is likely to stick around hence creating greater opportunity to sell to them. Plainly, the more time a potential customer will stay on a website to read content, the greater the opportunity the individual will have to click on an ad. Hence, the problem, therefore, is how content that is relevant to a user will be created. Still, generating relevant content is possible when a business knows what the user likes (Geru et al., 2008). Forms constituent of advertising Gaining and maintaining customer’s attention forms a constituted of advertising. Berman (2002) describes attention as the acts of allocating cognitive, visual and mental resources to perceivable objects. What this shows is that the older conceptions that ads can influence people even without their attention are a myth. In fact, scholars have demonstrated that certain degree of attention is essential for the ads to influence consumers (Humphrey & Kozinets, 2009). In which case, greater attention means higher influence. Again, ads are intended for various purposes, including building awareness, selling products, as well as wading off competition. However, three components must usually be present, namely persuasion, attention, and content. In which case, an advertiser will first generate content for ads that has to capture the customer’s attention. After capturing the customers’ attention, the ads will need to persuade, including altering the behaviours and the attitudes of the customers towards a brand (Berman, 2002). Hence, the concept of attention economy applies at this level since the advertiser will need to determine how to cost‐efficiently capture the customer’s attention, as well as how to transform such an attention to purchase behaviour. Since attention is a scarce resource, much concern will be on winning the customer’s attention or else, the customer will tend to disregard the advertiser’s message without even evaluating it (Geru et al., 2008). Attention economy inspires brands to win customer’s attention While brands will often compete based on value and price, this is different in environments that customers are spoilt for choice since brands that gain and sustain customers’ attention will always win the competition. In fact, brands in many industries gain and maintain customer’s attention to win their attention (Teixeira, 2014). While exploring the significance of attention economy in the value chain, Teixeira (2014) noted that the traditional value chain basically used the linear sequence, which started with research and development before moving directly and in sequence through the production, distribution, as well as marketing before finally reaching the customer. In the traditional model, the person who created the goods also decided the product’s design and forced the customer into accepting the design. However, this has changed through the years because of the dynamic technological revolution and information overflow, as customers choose what to interact with. White and Jain (2010) explain that in management of customer attention has become the primary force that has transformed the way companies interact with customers. Based on the concept of attention economy, it could be reasoned that it is the individual customer now who exerts pressure for what products and services should be designed and produced. Teixeira (2014) dubbed such a process “attention loop.” In his view, value chain has been replaced by attention loop. Toward this end, the attention of the customers is engaged at dual places within the loop. These include creating the product and the manner in which the products are delivered. Weaknesses Teixeira (2014) argues that the current economy that is rooted in attention is such that consumers constantly influence what they believe in, as well as what they want. However, this conception has several weaknesses. Attention economy increases the number of ads To continuously gain and sustain customer’s attention, companies need to use different vehicles to advertise their brands. A case in point is Samsung, which advertises its brands using different vehicles, such as different Samsung company websites, strategic technology news websites and television channels, such as SupersSports TV. In such a case, these different websites may be relied on in advertising either one of the brands. Alternatively, it can be divided into segments to enable advertising of multiple products simultaneously. However, to increase the total advertising benefits or potential to win greater levels of customer’s attention, a company may have to allocate advertising at any time on television in order to attain optimal level of advertising exposure (Huberman & Wu, 2007). Difficulty in capturing customer’s attention Attention economy has made it difficult to capture customers’ attention without paying for them. In which case, it has made attention to be an expensive commodity, where companies must spend large sums of money in order to capture attention before it can influence the customers. Teixeira (2014) suggest two key models companies can use to capture attention in advertising. These include paying for it or earning it. For instance, companies have to buy media time, including a full-page newspaper ad or a thirty‐second television ad. The media companies selected to undertake the ad often understand the demographic composition and size of audience and will charge based on these factors. Dividing prices based on the audience is referred to as cost‐per‐mil (CPM) while dividing them based on age or gender is called targeted CPM (TPMs). Clearly, these media companies will not sell attention (Huberman & Wu, 2007). Rather, they will charge for gaining access to the wider audience. When the audience switches to another channel when the commercial is being run, it will be the problem of the audience, as the media companies will still charge them. For instance, if a company pays for a thirty-second ad although only manages to get 10 seconds of the audience’s attention, it will still be upon the companies that paid for the ads since attention is a scarce resource (Huberman & Wu, 2007). Teixeira (2014) also comments that companies can earn attention without buying to access the audience. Hence, rather than the advertiser approaching the customers, the reverse occurs. This is what happens when using search-engines like Yahoo! or Google. Here, the advertiser’s content must be sufficiently convincing for the customers search for brand messages directly. Typically, the advertisers will use large sums of money in order to create website content that many internet users will click. Therefore, despite the approach a company pursues to capture customer’s attention, attention economy means that customer’s attention will often come at a price. Customers allocate less attention to ads According to Teixeira (2014), the two key dimensions for attention include duration and intensity. Teixeira (2014) describes intensity as an element for measuring the quality of attention. On the other hand, duration describes the quantity of attention. He further suggests that measuring duration is easier than measuring intensity. However, measure the quality of attention is tricky, relative to measure quantity. White and Jain (2010) suggest that within a lab setting, use of eye‐tracking technology today permits researchers to determine the quality of attention to product packaging, through integrating the duration and the location of the gaze. However, outside the lab setting, the duration of attention consists of the proxy useful for measuring the quality. Still, duration does not present an effective good proxy for attention. This also implies that determining the intensity with which the audience gives attention to advertising is tricky since it relies on each individual, as well as the brand, and the type of ad. What this implies is that attention economy has complicated the manner in which companies can determine the quality of attention given to their ads. These findings were confirmed in a recent research by Teixeira (2014). In the study, Teixeira (2014) examined researches on ad‐skipping rates published before 2000 in order to compare the findings based on brands, types of ads and the population. Teixeira (2014) found that before 1992, all advertisements that had not been skipped because of changing channels were regarded to have been given full attention. However, while viewers may not be directing viewing the TV screen directly, the researcher used eye‐tracking technology to measure this. The researcher established that the rate of ads fully attended to have plummeted radically, from 97 percent in the early 1992 to less than 20 percent in 2015. The findings are consistent with a related research by Teixeira (2014), which established that viewers are today paying minimal attention to television ads, through shifting channels using a remote. What this implies is that attention economy has complicated the value and modes of advertising, where companies may spend a lot of money on advertising without realising the full returns on the ads. For instance, Honigman (2014) shows that traditionally, creating an ad needed creating a story that could sell a brand. However, the capacity to build a brand that runs for 30 seconds and, which is likely to be ignored for nearly 90 percent of the time, means that companies may be spending too much on ads that end up being ignored. Greater competition for customers’ attention Attention economy has meant that advertisers have competed for attention. While websites that belong to the same advertisers have a potential to increase the producers’ total profit, situations do also exist where many producers may try to win the same target audience. A prevailing model of competing for attention is in advertising that often exploits the existing technology to access the audience (Teixeira, 2014). In the recent past, however, the use of the internet has facilitated target advertising where only certain audience who search for or use particular information only get exposure to ads with relevant information. Despite this, the existence of many websites offering similar kinds of information implies that the audience will need to make a choice on which website to view (White & Jain, 2010). In such a competitive state of affairs, two scenarios exist. Firstly, each product may possess a target audience that in return has different attention capacities for each brand. Under this scenario, a customer who looks for certain brand may be willing to give partial attention to that brand. Therefore, he needs to divide this partial attention among the websites that provide advertisement for a brand. This also implies that other companies advertising varied kinds of brands fail to directly compete for audience’s attention. However, they do so when they advertise a similar brand. In scenario 2, companies that advertise varied brands tend to compete against each other for the full-attention of the customer. Hence, the companies will need to compete for the scarce attention of the audience when advertising the same kind of product (White & Jain, 2010). Conclusion Attention economy’ is crucial for understanding the existing relationship between a company and its customers when it comes to advertising. However, a survey of strengths and weakness shows that it places adequate emphasis on maintaining the customer’s attention rather than gaining the attention. Attention economy creates an active customer base. It also shifts power from buying the attention of the customer by providing entertainment to the customers to generating their attention, as well as influencing the customers to influence the attention of others. Again, attention economy gains and sustains customer’s attention by making them more active. In addition, gaining and maintaining customer’s attention creates greater sales opportunity. Gaining and maintaining customer’s attention forms a key constituent of advertising. However, to continuously gain and sustain customer’s attention, companies need to use different vehicles to advertise their brands. Attention economy has made it difficult to capture customers’ attention without paying for them. Customers also allocate less attention to ads. It also brings about greater competition for customers’ attention. To continuously gain and sustain customer’s attention, companies need to use different vehicles to advertise their brands. References Berman, S. (2002). The Strategies for Survival in the Attention Economy. Strategies & Leadership 30(3), 1-11 Garrouste, A. (2015). The ‘Economics of Attention’: A History of Economic Thought Perspective. Oceanomia Review 5(1), Georgy, U. (2008). The Theory of Attention and the Economy of Understanding as a New Price Model in the Information Economy. Retrieved: Geru, N., Neumann, S., Schocken, R. & Tobin, Y. (2008). An Attention Economy Perspective on the Effectiveness of Incomplete information. The International Journal of an Emerging Transdiscipline 11(1), 1-13 Honigman, B. (2014). Goodbye advertising, hello attention economy. World Economic Forum Huberman, B. & Wu, F. (2007). Comparative Advantage and Efficient Advertising in the Attention Economy. Retrieved: Humphrey, A. & Kozinets, R. (2009). The Construction of Value in Attention Economics. Advance in Consumer Research 36(1), 689-670 Teixeira, T. (2014). The Rising Cost of Consumer Attention: Why You Should Care, and What You Can Do about It. Harvard Business School Working Paper, 14-055 White. A. & Jain, K. (2010). The Attention Economy of Search and Web Advertisement. Retrieved: Read More