What Are Attention Markets

Let's start with a challenge. Think about 'programmatic'... now stop. The term  is no longer a good description of what is going on in our industry. We challenge you to stop using that word to describe the industry. It's inaccurate and confusing. It's holding back the entire industry by misrepresenting the value propositions of advertising and marketing technologies. The word programmatic is defined as "of, relating to, resembling, or having a program." It means automation. Now, let me ask a simple question, is anyone using real-time bidding doing it primarily for reasons of automation? We would argue that not a single one does.  Automation  is probably last on a list of reasons that includes targeting, impression level decisions, and market driven prices. In today's advertising markets automation is not the cause, it is the effect. Having a place to buy and sell that reflects the wills and desires of market participants is the end-goal. Why are we collectively naming the industry 'automation'? This industry is about the time and attention people are willing to give to a message, it is about understanding economic decisions people need to make and providing them with suggestions.

In reality, something very real is traded in these markets. Its actually not even really media. In the end, it is all about what the advertising stands for. It stands for the time an attention of people you want to reach, that's it. Its about getting your message in front of people. It's about attention. Real-time bidding (also a poorly conceived name), programmatic direct, video, the nascent TV markets, and everything else from digital out-of-home to audio ads, are all members of the larger Attention Markets ecosystem.

Attention markets are what all the significant buyers want and, in many ways, it is also what the sellers want. If both sides can easily understand the value of an advertising opportunity, now and in the future, it is much easier to figure out what the 'markets' think things are worth. The markets are simply the entire collection of all buy orders and sell orders. This is where people's attention is bought and sold. We've all heard the adage "if  you're not paying, you're the product.' Well, these are the exact 'products' that are being traded in Attention Markets.

An impression is a unit of attention, a view is a unit of attention, a click is a unit of attention, and action is a unit of attention, even reach is a unit of attention. In market terms real-time bidding is a spot market, cash and carry. The larger environment is a broader fabric of technology to transact attention assets. Not all are automated.

There is a great report from McKinsey&Company (download link) that helps to put this in perspective. In short, McKinsey & Company estimate that the entire advertising industry is about $1.5 Trillion (with a T) dollars global. That's one and a half million millions! That's 2% of global GDP! And we don't trade this stuff in a market like all the other major parts of our economy? Yep.

So what does all that mean to you right now? Well, buckle your seat belt, the next decade may be the largest technology gold rush since the rise of social media. Let's add a little more perspective, all global oil production in 2013 was $3 Trillion according to research from BP. The entire global oil market is only twice the size of advertising. Stop and think about that for a moment.