Ten strategies for survival in the attention economy

IBM Business Consulting Services recently prepared a detailed analysis of major trends in the entertainment industry and the actions entertainment and media companies should take to survive over the next five years or more. The study chronicled the changing of the old order of the industry as technology floods consumers with more ways to connect and more content choices. But consumers can only afford to spend a certain number of hours per day learning how to connect, choosing what to connect to and then being entertained and informed. What will drive the entertainment and media economy in the years to come will be that which gains -- and holds -- the consumer's attention. In the blink of an eye this high change industry has become an attention economy.

Astute observers are increasingly aware that attention is evolving as a dynamic economic driver of all branded markets -- and this trend will continue to accelerate. Many of the IBM Business Consulting Services insights about competing for attention by entertainment and media companies apply as well to a variety of other industries. To make this generic applicability a bit more obvious, this article provides general advice on strategies for gaining competitive advantage in an attention economy, using a limited number of examples from the entertainment industry as evidence. Attention should no longer be viewed as a commodity, but as a scarce economic resource. This is because we are witnessing a fundamental shift in the way people value and allocate their time. Essentially, this shift reverses the assumption of "mass production for a mass culture."

In addition to competing on the basis of price, value, or innovation, in an environment saturated with choices but pressed for time, brands will also increasingly vie for attention on an individual level. Indeed, branded products and services in many industries are already competing harder than ever at all the "touch points," the opportunities for customers to interact with an organization. Here is how the new competition -- not just for market share, but also for influence -- differs from the old.

The traditional value chain was a linear sequence that began with research and development and moved straight through the steps of manufacturing, distribution and marketing until it reached the customer. The creator of goods determined the design of products and "pushed" the consumer to accept them.

In contrast, when managing flows of attention becomes the central force, the linear "push" towards the customer becomes an interactive loop -- transforming the nature of the relationship with customers from "push" to "push-pull." The individual customer exerts "pull" to help, design, produce and deliver the products and services that contribute to his or her experiences.

We call this process of value delivery an "attention loop" rather than a value chain. The customer's attention is engaged at two places in the loop:

1. The creation of the product itself
2. The way the product is delivered/experienced

The most cost-effective kind of interaction is that which provides the shortest distance between consumers and producers. Your company need not manufacture a service in order to deliver the service. Instead, companies should apply their capital to customer facing activities. Forget vertical integration. It is a relic of the industrial age. In the attention economy, owning all steps of the value chain is meaningless. Your objective should be to own all possible avenues of interaction with customers.

To read the complete study, download the PDF file at the top of this page.