Paying (for) attention
Who’s paying for yours?
What’s the most valuable resource in any economy?
Ask any child whose parents have gifted them a younger sibling and they’ll be able to tell you — the answer is attention.
Whether it’s the carpenter focusing on chisel and wood, the nurse tending to a patient, the accountant checking numbers in a spreadsheet, or the CEO negotiating in the boardroom, we cannot do anything worthwhile without human attention.
Attention determines almost everything that happens within society. It is the driving force behind every aspect of our civilisation, our culture and our technology. It underpins the everyday acts, like raising our children, as well as our most ambitious achievements, like landing humans on the moon.
The places we choose to direct our attention in turn direct the evolution of our economy – a fact big tech companies know only too well. In today’s global, digitally connected economy, human attention is a resource which is so valued that companies vie for it ever more ambitious ways. The entire ecosystem contained within your smartphone is designed to capture your attention – with alerts and notification icons – and then retain it, with endless scrolling and algorithmic personalisation to maximise engagement.
And why? Why go to all this trouble, all this effort? The only reason companies do anything in our current economic model — to capture value.
Capturing Value
At its most basic, any product or service has value when people are willing to pay for it.
There are some things that obviously have intrinsic value by catering to our most basic needs – food, shelter, warmth, comfort. There are products and services which offer more transient experiences too. The value of a massage, for example, is contained within both the pleasant sensation during the massage (unless you’re the type of person who prefers a massage which feels like someone trying to break your back with their knees), along with the subsequent feeling of relaxation.
In contrast, there are clearly some things we can do with our resources which destroy value, with war being the most obvious example – a literal destruction of valuable infrastructure and invaluable human lives.
In between these two extremes of black and white, however, there is a whole spectrum of grey. For example, the deforestation of mangrove forests for charcoal in one sense creates value by providing a product that people are willing to pay for – charcoal – but in another sense it destroys the unaccounted value of the natural capital.
Mangroves, thanks to their unique root structures, act as a carbon sink, a store for biodiversity, and a crucial component of natural infrastructure for coastal resilience, protecting against storm surges and insulating coastal communities from storm damage. These things are much harder to quantify, although estimates based on carbon sequestration alone place the value of mangroves and other coastal ecosystems at $190 billion annually. However, it’s currently much easier to trade for the value of charcoal than it to trade for the value of living mangroves (although there are some great organisations working to address this issue). But this illustrates that, in many economic situations, the balance between the creation and destruction of value is just that – a balance.
Value extracted does not necessarily equal value created.
Theft
A clearer example of this is theft. Stealing is not destructive in the same way that war is – it doesn’t actively destroy anything. In reality, stealing typically moves the ownership of valuable assets from one place in society to another, as do many other types of economic activity. But stealing is nonetheless destructive to overall value because of the opportunity cost: the resources that are expended in making the theft, committing the fraud, or developing the scam add nothing of value to the rest of society, and only serve to enrich the thieves at the expense of the victim.
The proliferation of ever more creative email scams often makes me think of this – just imagine what these brains could be contributing to civilisation if they were devoted to solving useful problems, instead of “solving” the “problem” of how to trick vulnerable people into parting from their cash.
The classic example used to illustrate this concept in economics is the parable of the broken window, introduced by French economist Frédéric Bastiat all the way back in 1850. When a shopkeeper’s window is broken, it’s true that the glazier profits from its repair – this is visible, and seen, and obvious. What is less obvious is that the shopkeeper loses the opportunity to spend his resources in a place in the economy which is not dependent upon destruction, perhaps by buying a new book (and thereby enriching both shopkeeper and bookseller). The view that monetising destruction is good for society, which was a common misconception in Bastiat’s time, “takes no account of that which is not seen.”
Similarly, in theft, human ingenuity and resources that could have been spent contributing to society are committed only to the enrichment of one group at the expense of another, depriving the victim of the opportunity to spend those resources elsewhere in the economy. No value has been created, only transferred.
I can think of another economic sector which is comparable.
Gambling
What value does gambling add to society? If you ask a spokesperson of the half-a-trillion-dollar global gambling industry, the usual talking points, as in Bastiat’s parable, focus on what’s visible: they’ll tell you that it creates jobs, creates tax revenues, and, above all, that it creates a sense of excitement and entertainment.
I have no plans to argue with that last point – watching a race is famously a lot more fun when you have a horse in it. But, beyond this excitement and entertainment, what value is actually created by the gambling industry, as opposed to merely being transferred?
The social benefits of gambling – the services it provides – are very quickly overshadowed by the social costs: increased suicide rates of gambling addicts, increased crime, bad debts, children addicted to gambling. Research from GambleAware and the IPPR found that social costs for gambling addiction is estimated to cost the UK economy alone up to £1.2 billion per year. This is a steep price to pay for the sake of entertainment – in this sense, gambling is far closer in nature to the example of mangrove deforestation than the example of the massage.
But what about the jobs and tax revenues? Again, none of this focuses on “that which is not seen”. The opportunity costs. Jobs in the lucrative gambling sector divert the employment of some very talented people away from sectors where their skills could potentially add more value to society – there are currently 900,000 vacant jobs in the UK, and more than 8 million in the US, acting as an impediment on overall economic growth. Just as Bastiat’s shopkeeper could have bought a book rather than a new window, the tax revenues generated by the gambling sector would have been generated in a different place if the gamblers had spent their money elsewhere in economy, perhaps on other forms of entertainment which don’t carry the social costs associated with gambling.
The purpose of the gambling industry is to capture value – to transfer capital from the bet maker to the bet taker – and it’s very good at doing so. And this creates the fundamental problem with gambling.
When there is:
a) an economic incentive to capture as much value as possible from your customers, and
b) you are able to capture more value the more attention your customers devote to using your product, then
c) you are incentivised to capture and retain as much of your customers’ attention as possible.
The gambling industry has very successfully answered the question of how to go about converting attention into measurable financial gain. Because the best way to retain your attention is to addict you to the product.
Addiction
The casino and betting industries have been honing their skills in this regard for centuries. Take the humble slot machine – every blink of the lights, every near miss, every small pay-out, every occasional big win has been finely tuned to maximise your impulse to insert more money and keep pulling the lever. It does so by hijacking your brain’s dopamine system.
The dopamine system is one of the most fundamental components of the animal nervous system. Broadly speaking, dopamine is a neurotransmitter which is released by the brain when we engage in activities that are pleasurable or fulfilling and then creates a feeling of reward and satisfaction. It can be fairly summarised as the “motivation neurotransmitter”. The dopamine system helps create the behavioural drives that compel animals to seek out things like food and mating opportunities, without which they will either die or fail to pass on their genes — and we humans are not exempt.
Gambling uses the quirks of our neurophysiology against us. Even the anticipation of a win can trigger the release of dopamine, as well as the win itself. In addition, the unpredictability of winning enhances the effect of dopamine release, further strengthening the reinforcement of gambling behaviour as the gambler’s brain learns to anticipate these rewarding bursts of dopamine. This has been known to science since the 1930s, when B. F. Skinner’s eponymous box studies on rats found that such an intermittent reward schedule is most effective for inducing repetitive behaviour. The gambling industry has taken these lessons to heart.
Over time, regular engagement in gambling can alter the natural balance and function of dopamine in the brain. The brain may start producing less dopamine or lowering the system’s sensitivity in response to frequent dopamine surges caused by gambling, making equivalent stimuli less rewarding. This leads to what is known as tolerance – exactly the same tolerance that occurs in heroin addicts – where a more intense stimulus (in this case, gambling) is needed to elicit the same dopamine response, pushing the gambler to indulge more frequently or take greater risks. 60% of gambling profits come from the top 5% of gamblers. The gambling industry’s enormous profits are driven by addiction.
The gambling industry invests billions of dollars each year in finding the best ways to keep gamblers engaged with their products. It has found that the combination of an intermittent reward schedule combined with a relatively low amount of effort required to obtain a reward is a sure-fire way of creating an addictive product.
And they’re not the only ones.
Video games
Since the earliest video games reached mainstream commercial success through arcade systems in the 1970s – Pong, Space Invaders, Asteroids – the video game industry has been subjected to exactly the same economic pressure as the gambling industry, solving more or less the same problem: how to maximise profit by capturing and monetising user attention. Video game developers have been so successful in creating new ways of doing this that many of their tools have been picked up by developers of products in other industries through the process of “gamification”: leaderboards, achievements, unlockable rewards, competition with other players, and status-enhancing cosmetics. Examples are as diverse as Duolingo, Fitbit, and even Starbucks’ loyalty programme.
The video game industry has made headlines over the last decade for some fairly egregious examples of bad practice as a result of this economic pressure, enough to fill an entire Substack, but here’s a flavour for the non-gamers among you. Blockbuster games are often pushed out half-finished, with bugs and day-one patches, to fit with marketing release dates, like CD Projekt Red’s Cyberpunk 2077 and EA and BioWare’s Anthem. Multiplayer games released by the highest budget developers trend towards prioritising online multiplayer rather than games played with your friends in the same room – ‘couch co-op’ – largely to improve profitability. Big developers pile resources into creating multiplayer titles which require a permanent internet connection like Bungie’s Destiny 2 or Blizzard’s legendary World of Warcraft – rather than development-heavy story-focused single player campaigns – to ensure repeated content cycles with multiple revenue-generating expansion packs for each title. In-game purchases have steadily been increasing in prevalence, from purchasable cosmetic items and playable characters in Activision’s Call of Duty series to the hyper-profitable “battle pass” system popularised by Epic Games’ Fortnite.
But what does this actually tell us about the evolution of creative industries? Frankly, this is all to be expected – no industry is immune from the motivation to maximise profit. And it should be noted that many smaller, independent developers choose to focus on the player experience and storytelling aspects of video games. But bigger developers often construct games not to maximise enjoyment for the player, but to shape the player’s behaviour to spend more money on new products and in-game purchases. It’s the difference between a bingo night at your local town hall and a Blackjack table in Vegas. Just like the gambling industry, the titans of the video game industry have learned that the best way to capture, retain and monetise attention is by leveraging addiction.
The most obvious examples of this are in games which involve the opening of digital card packs or ‘loot boxes’ – such as the online Ultimate Teams mode of EA Sports’ FIFA series, or online collectible card games like Blizzard’s Hearthstone. These systems use exactly the same behavioural manipulation techniques that the gambling industry has been using for generations – randomness, risk and reward, and intermittent reward schedules – with a few extra thrown in for good measure, like comparison-induced status anxiety and artificial scarcity.
There are plenty of examples online of kids spending thousands of pounds on these mystery packs and loot boxes – the inevitable outcome of this method of monetisation. The games have been designed according to Nudge Theory from behavioural economics – not to guide user behaviour towards healthy living, but to part with more money.
The backlash against one of the most egregious examples of this – EA’s Star Wars Battlefront II – was so widespread that it made headlines outside the gaming sector, and ended up gaining the attention of international policymakers. As a result of this increased scrutiny, loot boxes qualify as gambling in Belgium and the Netherlands, and in Germany games with loot boxes are required to have a higher age rating.
But video game developers are just following a predictable pathway in the evolution of any industry in the attention economy. They are economically incentivised to capture and retain attention to maximise profits. As the gambling industry has known for decades, the best way of doing so is by using addiction.
And it doesn’t end there.
Social media
How do tech and media companies monetise their products? Some use subscription business models – pay a monthly fee for unlimited access. But many others use a model adjacent to that used by casinos – they monetise your attention by capturing it, retaining it, and then selling it. To advertisers. To the highest bidder.
Legacy media companies – TV channels, newspapers – have been doing this for generations, but the difference in power to shape behaviour in contrast to digital media platforms is like comparing a plate of wilted lettuce to a perfectly toasted grilled cheese sandwich. In the modern era, the TV approach to advertising looks quaint, antiquated. I watched an episode of Poirot the other night, and during the break I was shown an advert for cat food — I don’t own a cat, but the traditional advertising model had made an assumption about me based on the typical viewer profile of someone who enjoys a light 1930s period Agatha Christie detective drama (make of that what you will).
Social media is a different beast altogether. With live feedback and data capture on user preferences and content interaction, social media companies are able to build up incredibly accurate profiles of their users. And the more data points these companies have on your preferences, personality, and identity, the more effectively they can influence your behaviour.
This data is used to fill your feed with personalised content, which serves two purposes: it improves retention of your attention (by increasing the dopamine reward for staying engaged), and it enables more personalised (and therefore more effective) targeted ads.
Personalised content is combined with advances in technology, lessons from the video game industry, and some clever further innovations to improve social media’s ability to capture and retain user attention. Facebook mastered endless scrolling back in 2011; video platforms like YouTube introduced autoplay to keep you on the platform longer; X, Instagram, and other platforms are trending towards more engaging short-form video content, taking their cues from TikTok; and TikTok has even taken cues in its app design from Las Vegas, where casinos deliberately avoid displaying clocks to help you lose track of time and keep you gambling for as long as possible.
Just as with the gambling industry and video game developers, the economic incentives for social media companies create a feedback loop. Advertising revenue drives investment in capturing attention to increase advertising revenue. There is no more certain way of guaranteeing that the end result is addiction.
And social media companies have successfully created some of the most addictive products on Earth. The average social media user spends around two and half hours on social media each day. That’s more than a month out of each year spent on social media per user – the opportunity cost borne out of this cannot be overstated. With more than 4 billion global users, around 4 trillion hours of human attention are spent on social media over the course of a year. And we wonder why we’re struggling to improve productivity!
The impact this has on mental health is similarly profound. The dopamine hit from scrolling through social media both requires less effort to obtain and is more stimulating than whatever boring email / spreadsheet / homework / video call / revision / childcare you were supposed to be focusing your attention on. But without concerted effort (often, sadly, on activities that are less stimulating than social media), it’s almost impossible to achieve anything worthwhile.
And then there are the complex downstream effects of the types of content the social media algorithms are feeding to us. Content which provokes an intense emotional reaction is more likely to keep us engaged – this is so well documented at this point that digital marketing companies have written ‘handy’ guides on how to manipulate the emotions of your customers to get more clicks or go viral. What keeps us engaged keeps the price of advertising space high.
The same psychological systems which drive addiction are driving our repetitive behaviour in engaging with these products. If you need any more convincing of the power that social media has to transform society, look no further than the remote villages in the Amazon which have recently connected to the internet — the social atmosphere of their community now regularly disperses into the online world.
One day, perhaps, we will look back on this proliferation of addictive and world-transforming products with as much bemusement and incredulity as looking back at the original adverts for over-the-counter heroin. We are starting to see social media be treated as a public health issue – earlier this year, New York City filed a lawsuit against TikTok, Instagram, Facebook, Snapchat, and YouTube, citing their accountability in fuelling the costly mental health crisis in young people. Unfortunately, many of our politicians would prefer to use the data captured by these social media companies to help target personalised ads at voters and win elections – see the Cambridge Analytica scandal – rather than hold these companies accountable.
But, for now, this is the natural consequence of allowing such business models – those which rely on capturing user attention – to act with impunity within the market. And, with social media in particular, a big component of this desire to capture user attention is driven by advertising.
Advertising
Adverts are such a ubiquitous part of modern society that we rarely question them, whether it’s the static adverts staring at us on public transport, ad breaks in our favourite TV shows, or stealth ads popping up surreptitiously in our social media feeds. We may comment on their form – perhaps one has a particularly irritating and catchy song, another has a clever joke – but we take their presence for granted.
Adverts, at their core, exist to notify us that products and services are available which we may not otherwise have thought to seek out. They also help to generate demand for things which may otherwise not exist, acting as motivation for us to engage productively in the economy – new ways of spending money require that we earn more money.
However, it is this ability to shape our behaviour which makes advertising such a powerful tool. For example, advertising aimed at children – who typically lack the critical thinking faculties we expect (but don’t always get) from adults – rakes in an estimated $11 billion per year from social media alone. But, again, profitability – value extracted – does not equal value created.
And that’s the key problem with the argument that advertising helps generate productivity within the economy — advertising also generates tens of billions of dollars by creating demand for economic sectors which are net value-destructive.
There is a reason that cigarette advertising is banned in most jurisdictions — the public health costs from smoking-related harms vastly outweigh the value created by tobacco companies. And, much like gambling, nicotine addicts are much more susceptible to the reminders – the nudges – found in advertising which direct their behaviour towards consuming more of the product. Naturally, tobacco companies fought tooth and nail to preserve the right to advertise their products and continue capturing value at the expense of wider society, and are once again up to their old tricks when it comes to advertising addictive vapes to children.
Junk food, arguably, also falls into this category – just like cigarettes, the public health costs of obesity are an extraordinary burden on our collective wealth. The World Obesity Atlas 2023 estimates obesity has a total cost of $4 trillion globally in combined healthcare costs and impact on productivity, and this number is only increasing.
Studies from the TV era (i.e. pre-social media) found that children ate less fruit and vegetables the more they watched TV, with the correlation directly linked to the quantity of junk food commercials they were shown. The previous UK Government did propose a ban on junk food advertising aimed at children – a policy which would help reduce obesity and obesity-related health issues and healthcare spending. This is the Nudge Theory of behavioural economics at its best. Of course, just like the tobacco industry of yesteryear, the junk food industry is vigorous in its lobbying, and, at time of writing, this policy is still sitting on a shelf rather than being implemented.
But listening to the vested interests in value-destructive industries like gambling and junk food leads us back to Bastiat’s parable of the broken window – by focusing on that which is seen, rather than that which is not seen, we are failing to act in the economic best interest of wider society. By prioritising the short-term gains of a small segment of industry at the expense of the long-term health and productivity of our entire society, we make our nation weaker and less resilient.
In a similar vein, today, the gambling industry in the UK alone spends £1.5 billion each year on gambling advertising, nudging gambling addicts to place a bet in the middle of every live sports game, and even sponsoring many of their favourite sports teams. These net value-destructive industries ought to be severely restricted in their ability to alter consumer behaviour – which is what advertising does so well.
Paying For Your Attention
The power of advertising to influence the behaviour of consumers is something we should not overlook when designing policies. But the power of advertising to alter the behaviour of businesses is another thing altogether.
Big tech companies have learned (as the gambling industry and video game industry before them) that the best way of keeping users engaged is by creating addictive products. And the reason they need to keep their users engaged is simple: the longer you scroll through your social media feed, the more money the social media platform makes from selling your attention to advertisers. Which leads to the inevitable conclusion:
The presence of advertising in an attention economy guarantees the monetisation of addiction.
There is an ongoing debate about the drop in productivity at the moment, and this is a key contributor. We’re collectively allowing corporations to make hundreds of billions of dollars of revenue by robbing our entire civilisation of its workers’ most valuable resource — their attention.
Not just social media, but search engines, streaming services, news outlets, e-commerce, and even many video games all rely on advertising as a core revenue stream, and they are all competing to attract and retain consumer attention. I’m by no means saying we should eliminate these things from our society – I’m saying that they need to be far more strictly regulated if we want our society to flourish and grow, rather than stagnate.
The only way to avoid the increasing drain on our productivity (and, indeed, our mental health) in an attention economy is to disincentivise advertising-based business models, as these models focus on making businesses more profitable by increasing advert engagement. This is what drives demand for user attention. We could do this by implementing regulations which limit the number of adverts which a user can be exposed to within a set time frame, for instance, or imposing stricter regulations on targeted advertising.
At the same time, we should encourage business models that are dependent on user experience, for example those based on subscriptions. Unfortunately, while the subscription model is a viable alternative, such products will inevitably struggle to compete with cheaper (or even free) competitor products which are subsidised by advertising. We can support these business models by offering tax incentives for companies that generate a significant portion of revenue from subscriptions rather than advertising, and educate the public about the difference. As American artist Richard Serra identified back in the TV era of the 1970s: when it comes to platforms which are supported by adverts, “you are the end product delivered en masse to the advertiser”.
The current economic model exacerbates class divisions as well – by creating advertising-based products which selectively target people less willing or able to pay subscriptions for products, the effects of addiction from these products are felt more keenly by those from lower socioeconomic backgrounds.
In spite of this, I do not consider this to be a left-wing stance – it’s an economically rational position to want to unlock the economic potential currently being dampened by industries which are profiteering from addiction.
These industries have successfully found some incredibly effective ways of directing behaviour and extracting resources from other people. But, for the same reasons theft is illegal, perhaps as a society we shouldn’t be encouraging this type of economic activity.
The monetisation of addiction deprives you of your most valuable resource. Without your attention, you cannot build anything meaningful – whether that’s the society you live in, the work you do, or the family you love.
Choose where you spend your attention. Do not let the highest bidder choose for you.
Thank you for reading.
If you found this article to be thought-provoking, the best thing you can do is consider sharing it with someone else who may be interested in its contents:
I also encourage you to become a free subscriber of my Substack, to get future articles delivered straight to your inbox: