Attention Economy | Why It’s Important to You
Have you ever heard the term “Attention Economy?” Chances are you haven’t, but it is something you need to understand and take advantage of! Unless you understand this very important topic, you will not be in a position to compete with those who do. This post is the first in a short series on this subject. Future posts will present ideas on how to prosper in a challenging attention economy.
Attention Economy Defined
In a monetary-based economy money is the vehicle of commerce. Customers exchange their money for products and the value those products deliver. In an attention-based economy attention is the vehicle of commerce. Customers exchange their attention for information they use to make buying decisions.
Like money, customers have a limited supply of attention, and therein lies the problem and the opportunity. The problem is the attention bandwidth of the typical customer today is saturated: their attention bank account is empty, and they don’t have a good way to replenish it! The opportunity is many entrepreneurs don’t understand this phenomenon, and if you do, and act on it, it can create a significant advantage.
Economies Expand, Contract, and Stagnate – What About the Attention Economy?
When the monetary-based economy expands, contracts, or stagnates, you, the entrepreneur, change and implement to tactics and strategies depending on the situation. If the economy is expanding, you introduce new products to create or access new markets and you see expanding revenues. Money is flowing, times are good, and opportunity is abundant: there is more than enough business for everyone. Customers are flush with cash and willing to take risks on new products. Their wants and desires are more easily entertained, and that means your new products are more viable to the customer.
In a contracting economy money is tight. Customers are more discrete with what they purchase. They focus more on the needs of life than the wants and desires. In this environment you, the entrepreneur, must compete aggressively against other entrepreneurs and businesses for limited selling opportunities. You have to redefine what your customers avatar is in the new economic paradigm, and develop new or repurpose existing products to meet the new needs to the customer.
Stagnant economies are similar to contracting economies in that customers have limited discretionary spending ability, but they are still willing to entertain products that promise better performance and more value. You must compete aggressively for their business, either displacing an existing competitor selling the same type of product, or convincing the customer that your product and the value it delivers is a more desirable use of their money: for example, a customer may find that your business opportunity is a better use of their money than their monthly subscription to an investment newsletter.
“The underlying principle is simple: Where the attention goes, the money will inevitably follow. And right now, the attention of a large chunk of the population is being diverted away from traditional content and information channels, and platforms like Facebook and Google are busy vacuuming it up. Many existing media and content companies face a future in which they are just suppliers to these platforms — or even worse, find themselves cut out of the attention economy altogether.What About the Attention Economy?” – Forbes
There is a fundamental difference between the monetary and attention economies that must be appreciated: While people can get better jobs, take on an additional job, sell assets, etc., to generate more money, they cannot easily create more discretionary time. Time is far more limited in availability than money. An expanding attention economy would require that the customers have more time and focus to invest, which while possible is far less likely to be the case. People in general do not view time with the same degree of priority and value as they do money.
A contracting attention economy occurs when people either divert their attention to higher priorities in life, or spread it among numerous activities. People have many interests and demands on their time: jobs, second jobs, family, hobbies, passions, friends, etc. And despite the increased availability of information displays in their lives (cell phones, cars, TVs, computers, …), this does not translate into increased attention bandwidth: it simply moves their discretionary time to other locations and events. They still only have 24 hours per day!
A stagnate attention economy occurs when the customers have saturated bandwidth to receive and act on information, and instead selectively screen out anything that is not necessary and important, interesting and compelling, or relevant in some form. In essence, they will not consider new information or content unless it fits in one of those three categories, and when that is the case, some other information is displaced from their consideration.
The Attention Economy is Stagnant
The bottom line is this: the customer has a saturated bandwidth and that translates into a stagnate attention economy. So if you want to occupy a portion of their bandwidth, then you need replace someone else who currently owns a chunk of the customer’s bandwidth!
Here is a critical distinction between the monetary economy we are most familiar with and the attention economy most have not heard of or considered: in a monetary economy your compete first with those who are in or adjacent to the same space and market segment as you, secondarily with the rest of the business economy who is competing for the customers money.
In the attention economy you are competing first with every business and entrepreneur in the world who seeks to get the attention of your customer or prospective customer, and secondarily with those in or adjacent to your market segment space.
This is a very, very important distinction you need to be aware of. Knowing this gives you the leg up on those who don’t get it. The implications of this is your marketing needs to be more fine tuned and creative, your avatar more accurately defined, and your innovation and differentiation much more pronounced.
Audio | What is the Attention Economy?
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