The Attention Economy

In this article, we explore how consumers’ attention spans are shifting, examine TikTok as a case study and explore the trends we are seeing in this space.

ollie-forsyth

Author

Ollie Forsyth

ollie.forsyth@antler.co

* This mapping highlights which technologies consumers have adopted and how our consumer behaviours have changed by vertical. The Attention Inception are the platforms that we may have previously used in the past. Attention Acceleration are the platforms we use today.

Ping! The sound notification we receive when sent a WhatsApp message, or the latest trending video on TikTok, the latest review for the best takeout, an email, or a refresh of our Twitter feed. These consumer tones have in many ways taken over our brains and our daily lives.

As the consumption of content across digital devices has become a part of daily life, we are constantly being bombarded with information. With the rise of internet innovations and new types of technologies, we are constantly being bombarded with information. According to research reported by Statista in February 2021, American consumers spend on average 5-6 hours a day on their phones for non-related work. Not only that, but we're checking our phones up to 221 times a day or every 4.3 minutes.

Attention has become an important currency for businesses. How brands lock in consumers within the first few seconds has never been so closely examined or commercialised. We call this The Attention Economy - the infrastructure and platforms that allow businesses around us to make money with your attention.

At Antler, we have been exploring how consumer behaviours have shifted in past generations, what are the driving factors, how our attentions shift in the future, and what are the next big trends.

Did you know that the average attention span has decreased from 15-18 seconds since 2002, to 3-8 seconds, as highlighted by various sources such as Microsoft's report? A question asked by many is: how much further will our attention spans shrink with the introduction of new technologies and innovations within gaming, live streaming, social apps and other areas of how we all live and work?

Consumers' attention is being harnessed by several factors, some of which include the endless amounts of information being targeted at us. Examples of this include getting your groceries in 10 minutes via new supermarket apps, interacting with your favourite celebrity via Cameo, spending hours a day scrolling on TikTok or watching Squid Games on Netflix. When was the last time you watched a movie, without responding to a WhatsApp message?

A sensational example of a company that is capturing our attention is TikTok. Since launching in 2016, the viral video platform now has one billion monthly active users and is one of the most valuable internet companies globally. The average TikTok session (the amount of time you spend scrolling) ranges from 15 - 30 minutes, making it one of the biggest success stories in the attention economy.

This comes down to the remarkable user attention, the scale it has reached in such a short time and the repeatability of the consumer returning daily. As TikTok grows and looks to expand its offering and audience demographic, multiple opportunities - especially for the creator economy such as live shopping, education, live events, streaming and embedded finance - will present themselves.

So far, the platform's growth has been nothing but impressive. Driven by smart algorithms which know the types of content we wish to interact with, TikTok provides users with content that they are likely to love - learning over time how they think. The biggest way TikTok taps into your attention is in the ability for endless scrolling of relevant videos 'learned' from previous clips you have watched or from your search history.

The amount of digital content created has far surpassed how much we're able to consume. For instance, about 500 hours of video are uploaded on YouTube every minute globally, and at the same time, viewers have become much pickier with what they consume in their everyday lives.

''The way I've seen social apps overcome consumer fatigue is by utilizing hundreds of ML models to find the best content for users in the first minutes of opening an app and customizing the user experience based on interaction data. Every piece of content is catered to a user's taste, easing the barrier to sift through "bad content". Chloe Shih, Digital Creator

*We spoke to James Dillard, a former Product Manager at YouTube who had similar insights.

*Fun fact, did you know the most-watched YouTube video is Baby Shark with 9.5 billion views so far which is 19 billion minutes’ worth of airtime? The video was published just five years ago. Watch here

So, let's take a look under the hood of TikTok to better understand how the algorithm works.

When a user signs up, they provide ByteDance (the owner of TikTok) with their age and IP address. Once the verification stage of creating an account is complete, TikTok offers up a handful of videos: from sports to motivational videos, lifestyle and entertainment clips. Based on your interaction with those clips - what you skip, what you spend time on, like, comment, share, search or follow - the algorithm recognises what content you are interested in, and does so within 40 minutes to two hours of you signing up to the app. In fact, on average, 95% of the content you see is down to the TikTok algorithms and your search history, according to recent research by The Wall Street Journal.

For platforms such as TikTok to make a positive impact on consumers, the algorithms powering the content suggestions needs to work effectively. We spoke to Peter Wang, Product Manager at Reddit, who provided some personal views: "There are pros and cons to algorithms," he said. "They work extremely well in surfacing relevant content that's optimised around a metric, for example, time spent and engagement, but they don't do a good job considering the second order effect of optimising for those metrics such as clickbait articles that confirm people's biases." He added: "We should be very careful in applying algorithms - there should always be a human on the other side evaluating the qualitative impact.''

We also spoke to Thibaud Dumas, former co-founder of myBrain who provides his thoughts on how algorithms can make a positive difference in our daily lives - ''I wish that algorithms could make social apps truly social, and actually help us deeply connect with each other, on a less virtual basis, or on a more authentic and emotional dimension. Can they expand our understanding of the world, our free will, our critical thinking, our creativity, our imagination, our empathy, and our compassion? This is what I would be excited to see.''

Looking forward, as TikTok grows its Millennial & GenZ audience - they may have challenges around how to engage with older users. However, should the consumer app only focus on their current demographic, they have multiple opportunities to control and make the life of a user so simple such as offering commerce and financial services - this allows them to become a super app.

TikTok creator Sandy Lin, says she is ''Especially excited to see how TikTok is going to transform e-commerce and ways of selling. I believe that TikTok will dominate live video shopping.''

Trends emerging in The Attention Economy

Live shopping

Live shopping is used by brands to promote and sell products through live streams on digital platforms, often in collaboration with influencers. This has shown to be huge in Asia with Taobao, Douyin and Kuaishou, predominantly the biggest players in live streaming.

As creators become one of the biggest attention grabbers in the attention economy, their fans often want to know what they are wearing, learning and consuming. Should more of these platforms in the creator economy integrate live shopping (some already are such as Taobao), this can lead to more startups being created in categories such as Embedded Finance (buy now, pay later), Logistics Infrastructure (making sure your items arrive quickly), Community Platforms and Analytics (for creators to stay connected to you).

"Consumer Behaviour has been strongly influenced by the platform economy," says neuroscientist Kai Markus Mueller. "Nowadays price comparisons are a daily business. Platforms such as eBay, Amazon, Priceline, VeePee, and many more have trained consumers to become bargain hunters. Kai Markus Mueller, Neuroscientist at HFU Business School.

Gaming

With almost three billion gamers worldwide the market is a huge opportunity. However, with companies such as Epic Games (online game platform) and Roblox (game creation system developer) making an impact on the ecosystem, we believe opportunities lie in the following categories: Virtual gaming platforms with virtual reality and discoverability as well as NFT's which will be a huge opportunity for the gaming industry. We see a future where creators' fans can buy into the creator's work from day one and own royalties as part of their future earnings.

We asked Annie Zhang, Product Manager at Roblox about how they create magical experiences for their users. She said: "The first was the launch of spatial audio, which represents an effort to make communication and expression feel more natural. The second was about creating frictionless ways for people to participate and impact their environments. We have started to test out different kinds of actions users can take in an experience, such as the ability to draw on a surface or contribute to a piece of art, or decorate their personal or shared spaces. Enabling UGC in-experience promotes more unpredictable outcomes and novelty that intrigues people to come back into the experience and feel like they have a stake in it. Finally, we're thinking about new use cases that might be compelling to attract new audiences. Many people are not gamers, but people might love watching movies, or dance parties, or attending conferences. We identify social settings that feel familiar to people in the real world and see how we can translate the experience into the online.''

Entertainment

With social apps becoming significant players in the attention space, they are striking back with a number of recently launched platforms such as Clubhouse (which launched in 2020 and has raised $100m to date from the likes of a16z) and Poparazzi, a photo sharing app where users can create social profiles of their friends which has raised from Weekend Fund founded by Ryan Hoover of Product Hunt. We see a number of opportunities in the consumer-tech space such as platforms that will enter the mind-sharing economy where we as consumers can learn and engage with our favourite creators or admirers. Take Jeff Bezos for example, consumers will be able to subscribe to his brain for a small fee per month, a product feature Twitter has recently launched. There have also been a number of short-form video content apps launched, the same will most likely happen but for audio. One platform which has recently launched an audio feature is Reddit which is a huge movement for the app as it allows its users to interact virtually and on a global scale which could lead to them building an NFT platform as an example as they have the entire community involved in one another's projects. Twitter will potentially also enter the NFT space where users can show their collectibles on their profiles.

"Reddit is in the audio space because we want to let our communities engage in authentic dialogue through voice and other live formats,'' says Peter Wang, Product Manager at Reddit.

The way we interact and respond to social media posts will potentially change in the near future also - instead of responding with likes or love emojis, we may see this being replaced with virtual reality engagement features. Finally, platforms will be enabling users to track how and where their data is being used which is why we are so excited about the next generation of web and mobile applications and services that are making an impact on our daily lives.

''Web 3.0 is all about giving agency and ownership back to the individual. Today, our attention is controlled by centralized algorithms — successful creators are bound to social platforms where they are only renting their audience. In the future, there will be on-chain interoperability that will allow users to move their data (content, personal info, "profile") from one platform to another. By choosing which platforms to engage with, we will collectively design the rewards and incentives system and thus, shape how we invest our attention online.'' - Christine Kim, Greylock Partners

Creator Economy

The Creator Economy has been through a whirlwind since we published The ultimate guide to the Creator Economy which is such an exciting space as creators are currently one of the biggest assets any company could wish for. They have their audience's attention 24/7.

However, some of the challenges and opportunities that have emerged include high take rates on platforms which will potentially reduce from 20-30% to 8-12% which will allow creators to improve their income potential. Additional challenges include the lack of infrastructure around bundling with fellow creators (sharing each other's audiences which has cross revenue opportunities) as well as providing discoverability to the creator as these platforms start to build two-sided marketplaces. Once achieved, this leads to multiple opportunities for the creator to expand their revenue streams via NFT's, social tokens and live streaming as examples. Above all, the platforms that provide the most support, discoverability, advanced payments and lower take rates will win in the creator economy. If not, the creators will just pick up their audience and go elsewhere. It might appear to be a race to the bottom.

From our research and interviews, where our attention goes from here will be apparent as a whole new generation of attention economy platforms emerges, being backed by notable investors who are already bullish on this category. However, for platforms to retain the attention of the consumer, they need to have very strong good algorithms, technologies or interfaces that are relevant and personalized which offer experiences that cover live entertainment or commerce with fast turnaround times, virtual reality as well as interactive engagement strategies that never fail to let a consumer down - should it happen, the user will probably never return, they have already forgotten about you.

''We're starting to see attention being shifted from what historically was a form of top-down broadcast (companies producing content) to UGC content (content straight from the consumer). With so much content available and only limited dayparts, I'm interested in companies looking to tackle curation to help with discovery. Another trend that we're seeing is content being shifted from being a passive form of consumption to an experience that is more participatory. Companies looking to blur that line between viewer and active participant are exciting to me.'' - Jerry Lu, Maveron

Thank you to Sandy Lin (TikTok Creator), James Dillard (Stripe), Christine Kim (Greylock), Peter Wang (Reddit), Kristin Chen (former Twitch), Jerry Lu (Maveron), Prof. Dr. Kai-Markus Mueller (Neuroscientist), Annie Zhang (Roblox), Thibaud Dumas (Neuroscientist) and Chloe Shih (Digital Creator, former TikTok Manager) for providing your insights.

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