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In this perspective Thomas H. Davenport and J. C. Beck define the concept of attention as:
Attention is focused mental engagement on a particular item of information. Items come into our awareness, we attend to a particular item, and then we decide whether to act.(Davenport & Beck 2001, p. 20)
As content has grown increasingly abundant and immediately available, attention becomes the limiting factor in the consumption of information. Attention economics applies insights from other areas of economic theory to enable content consumers, producers, and intermediaries to better mediate and manage the flow of information in light of the scarcity of consumer attention.
A number of software and web-applications either explicitly or implicitly take attention economy into consideration in their design, based on the realization that if it takes the user too long to locate something, they will find it through another application. This is done, for instance, by creating filters to make sure the first content a viewer sees is relevant, of interest, or with the approval of demographics.
Herbert Simon was perhaps the first person to articulate the concept of attention economics when he wrote:
"...in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it" (Simon 1971, pp. 40–41).
He noted that many designers of information systems incorrectly represented their design problem as information scarcity rather than attention scarcity, and as a result they built systems that excelled at providing more and more information to people, when what was really needed were systems that excelled at filtering out unimportant or irrelevant information (Simon 1996, pp. 143–144).
In recent years, Simon's characterization of the problem of information overload as an economic one has become more popular. Business strategists such as Thomas H. Davenport or Michael H. Goldhaber have adopted the term "attention economy" (Davenport & Beck 2001).
Some writers have even speculated that "attention transactions" will replace financial transactions as the focus of our economic system (Goldhaber 1997, Franck 1999). Information systems researchers have also adopted the idea, and are beginning to investigate mechanism designs which build on the idea of creating property rights in attention (see Applications).
 Relationship with advertising
"Attention economics" today is primarily concerned with the problem of getting consumers to consume advertising. Traditional media advertisers followed a model that suggested consumers went through a linear process they called AIDA - Attention, Interest, Desire and Action. Attention is therefore a major and the first stage in the process of converting non-consumers. Since the cost to transmit advertising to consumers is now sufficiently low that more ads can be transmitted to a consumer than the consumer can process, the consumer's attention becomes the scarce resource to be allocated.
According to digital culture expert Kevin Kelly, the modern attention economy is increasingly one where the consumer product costs nothing to reproduce and the problem facing the supplier of the product lies in adding valuable intangibles that can not be reproduced at any cost. He identifies these intangibles as:
- Immediacy - priority access, immediate delivery
- Personalization - tailored just for you
- Interpretation - support and guidance
- Authenticity - how can you be sure it is the real thing?
- Accessibility - wherever, whenever
- Embodiment - books, live music
- Patronage - "paying simply because it feels good",
- Findability - "When there are millions of books, millions of songs, millions of films, millions of applications, millions of everything requesting our attention — and most of it free — being found is valuable."
 Social attention, collective attention
Attention economy is also relevant to the social sphere. More specifically, long term attention can also be considered according to the attention that a person dedicates managing its interactions with others. Dedicating too much attention to these interactions can lead to "social interaction overload", i.e. when people are overwhelmed in managing their relationships with others, for instance in the context of social network services in which people are the subject of a high level of social solicitations.
Social attention can also be associated to collective attention, i.e. how "attention to novel items propagates and eventually fades among large populations." (Wu & Huberman 2007)
 Controlling information pollution
One application treats various forms of information (spam, advertising) as a form of pollution or 'detrimental externality'. In economics an externality is a by-product of a production process that imposes burdens (or supplies benefits), to parties other than the intended consumer of a commodity. For example; air and water pollution are ‘negative’ externalities which impose burdens on society and the environment.
A market-based approach to controlling externalities was outlined in Ronald Coase's The Problem of Social Cost (Coase 1960). This evolved from an article on the Federal Communications Commission (Coase 1959), in which Coase claimed that radio frequency interference is a negative externality that could be controlled by the creation of property rights.
Coase's approach to the management of externalities requires the careful specification of property rights and a set of rules for the initial allocation of the rights. Once this has been achieved, a market mechanism can theoretically manage the externality problem. The solution is not necessarily simple in its application to media content (Hay 1996).
 E-mail spam
Sending huge numbers of e-mail messages costs spammers very little, since the costs of e-mail messages are spread out over the internet service providers that distribute them (and the recipients who must spend attention dealing with them). Thus sending out as much spam as possible is a rational strategy: even if only 0.001% of recipients (1 in 100,000) is converted into a sale, a spam campaign can be profitable (Mangalindan 2002). Spammers are demanding valuable attention from potential customers, but they are avoiding paying a fair price for this attention due to the current architecture of e-mail systems.
One way this might be implemented is by charging senders a small fee per e-mail sent, often referred to as a "Sender Bond." It might be close to free for an advertiser to send a single e-mail message to a single recipient, but sending that same e-mail to 1000 recipients would cost him 1000 times as much. A 2002 experiment with this kind of usage-based e-mail pricing found that it caused senders to spend more effort targeting their messages to recipients who would find them relevant, thus shifting the cost of deciding whether a given e-mail message is relevant from the recipient to the sender (Kraut 2002).
Closely related is the idea of selling "interrupt rights," or small fees for the right to demand one's attention (Fahlman 2002). The cost of these rights could vary according to the interruptee: interrupt rights for the CEO of a Fortune 500 company would presumably be extraordinarily expensive, while those of a high school student might be lower. Costs could also vary for an individual depending on context, perhaps rising during the busy holiday season and falling during the dog days of summer. Interruptees could decline to collect their fees from friends, family, and other welcome interrupters.
Another idea in this vein is the creation of "attention bonds," small warranties that some information will not be a waste of the recipient's time, placed into escrow at the time of sending (Loder, Van Alstyne & Wash 2004). Like the granters of interrupt rights, receivers could cash in their bonds to signal to the sender that a given communication was a waste of their time or elect not to cash them in to signal that more communication would be welcome.
Supporters of attention markets for controlling spam claim that their solutions are superior to the alternatives for managing uses of information systems on which there is no consensus on the question of whether it is pollution or not. For example, the use of e-mail or text messages for rallying political support or by non-profit charitable organizations may be considered spam by some users but legitimate use by others. Laws against spam put the power to make this decision in the hands of government, while technological solutions like filtering technologies put it in the hands of private companies or technologically savvy users. A market-based solution, on the other hand, allows the possibility of individual negotiation over the worth of a given message rather than a unilateral decision by a controlling party (Loder, Van Alstyne & Wash 2004, p. 10). Such negotiation itself consumes attention and carries with it an attention cost, though.
 Web spam
As search engines have become the primary means for finding and accessing information on the web, high rankings in the results for certain queries have become valuable commodities, due to the ability of search engines to focus searchers' attention. Like other information systems, web search is vulnerable to pollution: "Because the Web environment contains profit seeking ventures, attention getting strategies evolve in response to search engine algorithms" (Page 1998). It is estimated that successful exploitation of such strategies, known as web spam, is a potential $4.5 billion per year business (Singhal 2004, p. 16).
Since most major search engines now rely on some form of PageRank (recursive counting of hyperlinks to a site) to determine search result rankings, a gray market in the creation and trading of hyperlinks has emerged. Participants in this market engage in a variety of practices known as link spamming, link farming, and reciprocal linking.
The economic incentives are similar to those of e-mail spam: it costs very little to spammers to create huge numbers of links, so even a very small conversion rate (percentage of searchers who click on a spam-boosted search result) can be profitable. The costs of web spam are distributed among the search engines, which must spend tremendous amounts of money and labor on developing spam-detecting technologies, and searchers, who must spend attention on determining which search results are valid and which are spam (since the search engines are never 100% successful in keeping spam out of their indexes).
An attempt to change the economics of one kind of web spam is the "nofollow" attribute for hyperlinks, which causes search engines to ignore those links for the purposes of ranking results. The hope is that webmasters and makers of web discussion software will implement systems that automatically add the "nofollow" attribute to all hyperlinks not under a site owner's direct control. The effect would be to increase the cost of creating spam links, since spammers would only be able to create links on sites they controlled.
However, as opponents of the "nofollow" attribute point out, while this solution may make it incrementally easier for search engines to detect link spam, it does not appreciably change the incentive structure for link spammers unless 100% of existing systems are upgraded to support the standard: as long as some critical mass of spammable sites exists, link spam will continue. Furthermore, the "nofollow" attribute does nothing to combat link farming or reciprocal linking. There is also a philosophical question of whether the links of site commentators (as opposed to site owners) should be treated as "second-class," leading to the claim that the attribute "heists commentators' earned attention" (NoNoFollow.net 2005).
Another issue, similar to the issue discussed above of whether or not to consider political e-mail campaigns as spam, is what to do about politically motivated link campaigns or Google bombs (Tatum 2005). Currently the major search engines do not treat these as web spam, but this is a decision made unilaterally by private companies. There is no opportunity for negotiation over the question of what is an appropriate use of attention expressed through hyperlinking. It remains to be seen[vague] whether a market-based approach might provide more flexible handling of these gray areas.
 Sales lead generation
The realization that the attention focused by search engines was a valuable commodity led to the creation of the paid inclusion model, in which search engines charge advertisers to have hyperlinks to their sites included in search results. The dominant form of paid inclusion is Pay for placement, in which advertisers bid on the rights to have their hyperlinks listed in the results for a given search query. The auction winner then pays the search engine the agreed price per user that follows their hyperlink. With the advent of paid inclusion, profit-seeking web sites could choose to legitimately pay for the attention of searchers, rather than attempting to subvert search algorithms.
The paid inclusion model, as well as more pervasive advertising networks like Yahoo! Publisher Network and Google's Adsense, work by treating consumer attention as the property of the search engine (in the case of paid inclusion) or the publisher (in the case of advertising networks). This is somewhat different from the anti-spam uses of property rights in attention, which treat an individual's attention as his or her own property.
 See also
 Further reading
- Coase, R. H. (1960), "The Problem of Social Cost", Journal of Law and Economics: 1–44, http://www.sfu.ca/~allen/CoaseJLE1960.pdf
- Coase, R. H. (1959), "The Federal Communications Commission", Journal of Law and Economics: 1–40
- Davenport, T. H.; Beck, J. C. (2001). The Attention Economy: Understanding the New Currency of Business. Harvard Business School Press. ISBN 1-57851-441-X.
- Fahlman, S. E. (2002), "Selling interrupt rights: A way to control unwanted e-mail and telephone calls", IBM Systems Journal 41 (4): 759–766, http://www.research.ibm.com/journal/sj/414/forum.html
- Franck, G. (December 7, 1999), "The Economy of Attention", Telepolis, http://www.heise.de/tp/r4/artikel/5/5567/1.html
- Goldhaber, M. H. (1997), "The Attention Economy and the Net", First Monday (4), http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/519/440
- Goldstein, S. (November 17, 2005). "Media Futures: From Theory to Practice". Transparent Bundles. http://majestic.typepad.com/seth/2005/11/media_futures_t.html. Retrieved November 27, 2005.
- Haque, U. (November 8, 2005). "The Attention Economy". Bubblegeneration - Strategies for a discontinuous future. http://www.bubblegeneration.com/2005/11/attention-economy-across-consumer.cfm. Retrieved November 27, 2005.
- Hay, D. (1996), "Giving/Taking, Buying/Selling, Speaking/Silence: Te Reo Maori in Primetime", Continuum: the Australasian Journal of Media Studies, http://www.sophocrat.co.nz/works/maoriBC.htm#tereoquota
- Kraut, R. E. et al. (2002), Markets for Attention: Will Postage for Email Help?, SSRN 325961
- Lanham, Richard (2006), The Economics of Attention:Style and Substance in the Age of Information, http://www.press.uchicago.edu/Misc/Chicago/468828.html
- Loder, T. C.; Van Alstyne, M. W.; Wash, R. L. (2004), Information Asymmetry and Thwarting Spam, SSRN 488444
- Mangalindan, M. (November 13, 2002), "Spam Queen: For Bulk E-Mailer, Pestering Millions Offers Path to Profit", Wall Street Journal: A1
- NoNoFollow.net. "No NoFollow - Fight Spam, Not Blogs". http://nonofollow.net/. Retrieved November 27, 2005.
- Page, L. et al. (1998), The Pagerank citation algorithm: bringing order to the web., Stanford Digital Library Technologies Project, http://dbpubs.stanford.edu:8090/pub/1999-66 .
- Schmid, H. (2009), Economy of Fascination: Dubai and Las Vegas as Themed Urban Landscapes, Stuttgart, Berlin: E. Schweizerbart science publishers, ISBN 978-3-443-37014-5, http://www.schweizerbart.de/publications/detail/artno/008001100 .
- Simon, H. A. (1971), "Designing Organizations for an Information-Rich World", in Martin Greenberger, Computers, Communication, and the Public Interest, Baltimore, MD: The Johns Hopkins Press, ISBN 0-8018-1135-X
- Simon, H. A. (1996), The Sciences of the Artificial (3rd ed.), Cambridge, MA: The MIT Press, ISBN 0-262-69191-4
- Singhal, A. (2004), "Challenges in running a commercial search engine", IBM Search and Collaboration Seminar 2004, IBM Haifa Labs, http://www.research.ibm.com/haifa/Workshops/searchandcollaboration2004/papers/haifa.pdf#page=16
- Tatum, C. (2005), "Deconstructing Google Bombs", First Monday 10 (10), http://www.firstmonday.org/issues/issue10_10/tatum/
- Udell, J. (October 19, 2005). "Attention economics". http://weblog.infoworld.com/udell/2005/10/19.html. Retrieved November 27, 2005.
- Wu, Fang; Huberman, Bernardo (2007), "Novelty and collective attention", Proc. Natl. Acad. Sci. (USA) 105 (17599), doi:10.1073/pnas.104.45.17599 .