MM will hold a Public Webinar on the topic “Paying Consumers for Attention” on 10 June 2022.
Abstract:
Paying-consumers-for-attention through a decentralized system is intended to deal with the (low) attention quagmire of the current digital advertising system. This paper provides an analytical study of the performance of such a decentralized advertising system which lets consumers choose ad volume and pays consumers for their attention using a cryptocurrency (attention token). Our analysis shows that attention compensation, by reducing consumer’s net attention cost, can motivate high consumer attention and improve the efficiency of ad volume. Moreover, the equilibrium net attention cost decreases with the advertiser’s benefit from matching the products with consumer needs. Thus, paying-consumers-for-attention can better align the interests of consumers and the platform. Our analysis also shows that the net attention cost decreases with consumer’s matching value in a decentralized system, but the result is opposite in a centralized system. Thus, the decentralized system is customer-centric by allowing consumers (not the platform) to reap their attention benefits. Finally, when the attention monitoring technology is imperfect, the performance of the decentralized system is more robust to the noise in monitoring low attention. Overall, our analysis indicates that the emerging decentralized attention compensation systems can be effective in improving the prevalent platform-based digital ad system.
