The Attention Economy

In 1971, decades before the first smartphone, the economist and psychologist Herbert Simon made an observation that now looks remarkably prescient. A wealth of information, he wrote, creates a poverty of attention. Information, in other words, consumes the attention of those who receive it, and the more of it there is, the scarcer and more valuable attention becomes. Half a century later, entire industries have been built on that insight.

Consider the business model behind most of the apps on your phone. You pay nothing to search, to scroll or to share photographs with friends, and yet the companies that provide these services are among the most valuable in the world. The arithmetic only works because the user is not, strictly speaking, the customer. The customers are advertisers, and what they are buying is access to you: your time, your attention and, increasingly, a detailed profile of your habits that allows their messages to be aimed with uncanny precision. Hence the slogan, much repeated in recent years, that if you are not paying for the product, you are the product.

This model has a simple consequence. A platform's revenue rises with the amount of time people spend on it, so its incentive is to keep them there for as long as possible. Engineers measure success in terms of engagement: sessions per day, minutes per session, the proportion of users who return within a week. Features that boost those figures tend to survive; features that depress them tend to disappear quietly. The endless feed that never reaches a natural stopping point, the video that starts playing on its own and the notification timed to tempt you back are not accidents of design. They are, in a sense, the product working as intended.

Critics argue that some of these techniques borrow from the psychology of gambling. Rewards that arrive unpredictably, such as a new message or a sudden flurry of likes, appear to be particularly effective at forming habits, because the brain keeps checking in case the next pull of the lever pays out. Several former employees of large technology firms have spoken publicly about their unease at having helped to build such systems. The companies, for their part, generally reply that people use their services because they find them valuable, and that users already have tools to limit their own screen time.

Whatever one makes of that argument, the economic trends are hard to ignore. Over the past two decades, digital advertising has grown from a modest share of total advertising spending to well over half of it in many countries, while the revenues of traditional media such as newspapers have fallen sharply. Attention, once spread across television channels, radio stations and print, has become concentrated in a handful of platforms. That concentration has, in turn, given those platforms considerable bargaining power over the publishers, musicians and small businesses that depend on them to reach an audience.

Regulators have begun to respond, though progress has been uneven. The European Union has introduced rules that require the largest platforms to assess the risks their systems pose, to explain the main features of their recommendation algorithms and to offer users at least one feed that is not based on profiling. Elsewhere, lawmakers have proposed limits on how products may be designed for children, or on the collection of personal data. Opponents warn that heavy-handed rules could stifle innovation and even entrench the very companies they are meant to restrain, since only the biggest firms can easily afford the cost of compliance.

There is no consensus yet on where the line should be drawn, and perhaps there cannot be. What has changed is the terms of the debate. A decade ago, the question was mostly framed as one of individual willpower: if you spend too long on your phone, put it down. Today, more economists and policymakers are inclined to see it as a question of market design, in which billions of people with limited time are up against some of the most sophisticated optimization systems ever built. Simon, who spent much of his career studying how people make decisions under constraints, would probably not have been surprised. Attention was always going to be the scarce resource. The open question is who gets to spend it.