The Attention Economy and Cognitive Scarcity

Everyone wants our attention, but our attention spans are finite.  In economic terms, demands on our attention are great, but supply is limited.  This gives our attention value, especially when it lays claim to our spending.  If sellers can catch our attention, they have a good chance at catching our spending as well.  Thus, a market for attention is created.  If anyone can draw attention, they can get paid to do so by others who want to use that attention for the purpose of advertising.

How Platforms Monetize Attention

Content creators on social media can get paid if they attract enough viewers, which is a process known as monetizing content.  There are three main avenues of monetizing one’s content: sharing advertising revenue, promoting products through affiliate marketing, or entering into brand deals.  All three require the content creator to first have a large, relatively guaranteed following.  

Sharing Advertising Revenue

Most social media platforms show ads of some type, ranging from video clip commercials to pop-up graphics to permanent banners in the margins of the screens.  Companies pay to place these ads, and social media platforms have an incentive to post interesting content that keeps viewers clicking…and watching the ads.  Therefore, they will pay popular content creators to keep posting.  Content creators typically become eligible for this type of monetization once they reach certain metrics, such as a certain amount of unique engagement over a certain number of posts.  Once monetization is activated, content creators get paid-per-view of their posted videos.

Affiliate Marketing (Direct)

With affiliate marketing, content creators hype products directly in their videos and include links to the products.  When viewers click on the link and buy the product, the content creator gets a commission.  This incentivizes the content creator to post regularly and work hard to make the product seem appealing.  The social media influencer is paid by the company whose products are being sold, and only when sales are made.  By contrast, ad sharing revenue is paid to influencers by the social media platform itself after it is paid by the companies to purchase ad space.

Brand Deals (Indirect)

While affiliate marketing is direct advertisement, with social media influencers promoting specific products and encouraging viewers to click on displayed URL links to shop, brand deals are more indirect.  Influencers are paid up-front by companies to display and promote their products, or offered products for free in exchange for promotion.  More popular influencers may be paid to simply show products in their videos and not have to directly promote them at all.  Top-tier influencers can make up to $25,000 per month through brand deals, in addition to other monetization of content like ad revenue sharing.

Social Costs of Social Media: Decreasing Productivity?

While a handful of influencers can make significant sums of money by monetizing their content, critics wonder if social media is actually sapping our collective productivity.  Some research indicates that social media is reducing workers’ productivity through constant distraction, especially when taken holistically along with texting and other smartphone activities.  Certainly, there are plenty of individual examples of workers losing focus on the job due to social media scrolling and browsing.

The rapid proliferation of social media use, especially on employees’ personal smartphones, has led many employers to create explicit policies banning the browsing of social media and entertainment websites or apps while on the job.  In addition to distracted workers, social media use on company computers can increase the risk of those computers contracting malware.  Workers may also be targeted on social media sites by scammers and hackers who try to trick them into posting sensitive information, including how to access company systems.  

Social media and smartphones may have moved our society into an era where improved technology is no longer a guaranteed increase in productivity.  Previously, improvements in technology were considered determinants of supply that always caused an increase in our ability to produce.  Prior to the early 2000s, however, most technological advancements involved hardware improvements, such as new capital goods, that made it easier for workers to produce physical goods and services.  The past two decades have seen many technological advancements limited primarily to the creation of digital content, such as streaming entertainment.

Opportunity Costs of Our Decreasing Attention Spans

It’s not just our desire for entertaining content that distracts us: researchers are concerned that short-form social media, such as brief video clips, are actually eroding our attention spans.  This could potentially lead to widespread declines in worker productivity as younger employees have difficulty focusing on tasks for more than a few minutes at a time. How much economic output has been lost over the last decade due to workers' inability to focus like previous generations?

Now, even when we want to pay attention to important tasks, we discover that we cannot.  Years of seeking to fill our attentions with short-form entertainment may have caused permanent harm to our labor productivity. Can we restore this productivity ourselves, or will further technological improvements be needed to shore up the gaps? For example, will we increasingly rely on artificial intelligence (AI) software to overcome our distractedness...leading to even more inability to bear down and think deeply?

Government Regulations on Smartphones and Social Media

One area of rare bipartisan political support is the need to protect young people from the harms of social media and smartphone addictions.  In the United States, a growing number of states are completely banning the use of smartphones and other personal electronic devices by students during school hours.  Education professionals, and many parents and students themselves, have come to see smartphones as dangerously distracting in the classroom and preventing meaningful learning.  Most responses to smartphone bans have been positive after the initial shock, with students and parents grateful for improved academic achievement and ability to socialize.

Outside of schools, some states have also tried to limit how social media companies can set their algorithms to show videos and other content to minors.  Lawmakers argue that these social media companies are knowingly tailoring their algorithms to make content feeds more addictive to children and teenagers.  One desired regulation would require social media platforms to verify the age of users and prevent children from being bombarded with fast-paced, short form media.  This has met with some backlash from social media companies themselves and proponents of free speech and limited government.  They question how far is too far for the government to go to protect people from their own desires, especially when doing so would hurt the profits of privately-owned companies.