The Economics of Attention

Insights into the Future of the Attention Business

VP, Managing Director, Magnetic Content StudiosPart of Empower MediaMarketing

@David_Germano

WTF ………

is going on with the

communications

industry?

A massive transformation is

underway

It is difficult to see the enormity of it.

Ever wonder……

Why These Companies

Are Worth So Much?

$191B

$234B$175B

$31B $26B

$33B

Total Market Cap ≈ $700B

$19B

The

Old Guard

$62B

Total Market Cap ≈ $127B

$65B

A new

value system

is

rapidly emerging

Revenue 1/2

Market Cap

6X

These companies……

“traffic in attention.”

“It’s their primary asset.”

Human attention is the fastest

appreciating limited natural resource.

The ramifications will impact every industry

that relies on communications

The Attention Economy

We are constantly processing how to

allocate it.

It’s getting harder!

The expanding gap between these

equivalized growth rates represents an

enormous opportunity for innovation and

disruption.

Equivalized Growth Rates

Population Growth

Informatio

n Growth

Growing Gap

A very robust market focused on processing

information more efficiently is beginning

to form.

“Thanks to the efficiency of our surplus economy, many more people afford enormous capacity to spend economically

inactive time online.

While a growing sector of our economy can focus entirely on commanding an increasing share of this economic inactivity.”

Esther Dyson, Edventure.com

More and more organizations and

individuals will endeavor to produce

or curate content without the intent of driving an immediate

or direct financial transaction.

Rise of the Intermediary

Both have created enormous value

by capitalizing on natural evergreen human behavior -

learning and socializing, respectiv

ely.

They’ve become a critical intermediary between brands and publishers trying to reach and monetize

audiences.

Since 2011:

⋙ 1B active mobile users

⋙Increased avg. daily user engagement from 15 min. to 40 min.

⋙ Increased their share of referral traffic to the open web from 6% to 25%

Ramifications:

⋙ More of the publishing industry is becoming dependent on them for financial viability

⋙ Editorial/entertainment content is crowding out user and brand content

⋙ Facebook is rivaling other networks with their programming

The intermediaries that are responsible

for distributing attention for the media industry

New intermediaries will emerge across many broad and

niche sectors of our economy.

PricewaterhouseCoopers

Estimates that the sharing

economy will balloon to

$325B in the next 10 years.

Both Lyft and Uber each have goals of becoming media

platforms for other brands.

⋙ IOS represents about 20% of the market.

⋙ The only device purveyor heavily invested in content.

⋙Apple’s watch is about helping you connect to the internet of things.

⋙Apple is investing heavily in the business of attention.

⋙ On Pace to be the 1st $1 Trillion company

“To engage in inventive thinking during those idle hours requires

silence.”

When the focused can treat the minds

of the distracted as a resource, this is not

merely creating wealth, but a transfer

of wealth.

Image by Viktor Hachmang

The Cost of Paying Attention

Business will turn its attention to next critical frontier unlocking and harnessing the human mind.

Those who can make some abstract sense

of the incredibly complex and

seemingly messy communications

world that we live in will accumulate a disproportionate

share of attention.

ConvergenceBy Jackson Pollock

Thanks For Your Attention

VP, Managing Director, Magnetic Content StudiosPart of Empower MediaMarketing

@David_Germano