The Kings of the Attention Economy
In today's newsletter we talk about the economics of attention and how Facebook has mastered the art of getting you to do mindless stuff that makes little sense.
The Story
A couple of days back, Seeking Alpha reported how Facebook’s stock has rallied 50% in the last year alone and is now trading at historical highs. Its going places it’s never gone before and it had us thinking — How does Facebook actually do it?
But before we get to the meat of the story, a small detour.
The Attention Economy is born
The internet is an amazing place. It can teach you how to put on eyeliner 4 different ways. It can show you videos of a cat pooping on a dog. It can offer you access to a newsletter which breaks down complex financial concepts. Ergo, you always have access to a lot of information- more than you’ll ever be able to process.
While one might be inclined to think most of this information is free, it’s not. Granted, you may not be spending actual cash, but you are paying with another currency — your attention.
Consider Facebook.
“Facebook is free and always will be,” is the company’s famous slogan. But that doesn’t mean they are not making money. On the contrary, they are making billions. And to keep making more money than they did last year, Facebook ought to convince advertisers to pay top dollar. But that won’t happen unless the advertisers are convinced people will pay attention to them. So, in essence, platforms like Facebook have a big incentive to keep you mindlessly scrolling for hours, because they are literally profiting off your attention.
That is what brands are competing for. That is what social networks are optimizing for.
They do this in several, insidious ways. Facebook talks to you like a caring friend- “What’s on your mind?” Instagram uses visuals to make people yearn for a better life. LinkedIn exploits the human need for social acceptance. YouTube and Netflix play the next video or episode before you’ve even decided to watch it. Snapchat uses daily streaks to compel young people to use it every day.
Moreover, every network uses a combination of elements like reactions, emojis, tags, shares etc. to keep you engaged for as long as possible. Every time you like something, you feel like you’re supporting someone. Every time someone likes something you’ve put out, you get an instant dopamine hit. It makes you feel good. It makes you want more of that feeling.
Also, that little red icon that pops up whenever you get a new notification? You see it and immediately want to find out what it contains. It could be something important, you argue. And even if it’s not, pressing the button will make it go away. Hell, they even optimize for colour. Back in the old days, the Facebook notification icon was blue, in keeping with the rest of their design. But that wasn’t clickbaity enough. So they switched it to red and immediately saw more people responding to it. It has since been adopted by other social networks. Red is a trigger colour- it’s used for emergencies. It compels you to take immediate action, even if there’s a chance you’ll be disappointed. Especially if there’s a chance you’ll be disappointed.
Because all of this has remarkable similarities to gambling.
The pull to refresh mechanism, where users pull down, pause and wait for new posts to appear, uses the same psychology. It’s like a slot machine. You can’t be sure what you’ll get. Will it be a new picture of your crush or just a blurry family shot of your elderly tuition teacher? Pull down to find out. Not what you wanted? Pull down again.
According to a leaked report, Facebook is even monitoring posts and photos in real-time to get a feel of its users emotions. It can find out when people feel stressed, defeated, anxious, happy etc. They can optimise users’ feeds accordingly. They share these insights with advertisers so that they can better understand how to target their audience. Facebook also has information on users’ discussions. So now you know why you start seeing ads of gyms the moment you resolve to get fit.
None of this is all that surprising. Social networks clearly have all the incentives in the world to get users to spend more time with them. It’s up to consumers to decide what to do with the scarce resource that is their attention.
As the famous saying goes “If you’re not paying for the product, you are the product.”
Except if you are using Finshots. Hehe :P
Also, if you know a friend who spends too much time on a social media website, share this story now on WhatsApp. They need it.
Or you could just share it on Twitter.