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Putting attention economics to work in a small American city. 08/26/2009

Posted by Paul Daigle in Uncategorized.
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I’ve been traveling Maine this week. After celebrating a family reunion in Caribou, and visiting my family’s origins in Van Buren and St Leonard New Brunswick, I arrived back to Lewiston on Sunday evening. Lewiston is my childhood home, and where most of my immediate family still resides.

Yesterday morning I ventured out in search of some coffee and Wi-Fi.  Driving down Main Street I was struck by the number of “For Sale or Lease” signs on homes and businesses.  Lewiston has struggled for years to transcend its original mill town roots, like many small towns and cities in New England. It occurred to me that Lewiston’s biggest problem is now a much more visible national dilemma: How can we replace our lost manufacturing base in order to keep regional economies growing and healthy?

The café I’d hoped could serve up an espresso and Internet fix was no longer at 205 Main Street. A brand new store called “The Dollar Store & Up!” was in the process of taking over the space, with a front window display now featuring miniature Empire State Building, World Trade Center and Lady Liberty figurines. Some of Lewiston’s longest running businesses have specialized in this sort of overstocked and distressed merchandise. Seems deal conscious residents are more likely to spend a buck on a homeless New York City tchotchke than spend $3 on a high-end mocha. Driving around town it’s clear to see that this city is struggling to find it’s footing in this very difficult economy.

DepTrustFoiled in my attempt to find a comfortable place to work, I decided to take a walk down Lisbon Street, the heart of downtown Lewiston. Once the city’s main shopping district, Lisbon’s eight blocks of early century architecture reflect the city’s one-time ambition to serve as a regional center for commerce and culture. Growing up in Lewiston in the seventies and eighties this particular street was better known for all the things our parents wanted to protect us from… namely drugs, alcohol, crime and “adult” merchandise.

Coming to downtown Lisbon as a child for guitar and art lessons sparked a lasting affinity for urban living and culture. But in those days I wasn’t able to recognize or acknowledge the street’s unique assets. Then Lisbon Street felt like a tattered remnant of  the city’s past. Lewiston and Auburn’s newer shopping malls and neighborhood businesses represented the future of city life.  Our downtown, like many across the country, became an anachronism, and a center for the city’s underbelly.

I left Lewiston in 1984 for Boston, MA and then moved to New York City in ’95,  residing in Brooklyn and working in Midtown and Lower Manhattan.  I relocated to Portland, Oregon in 2001. Over the years I’ve spent time in many big American cities like D.C., Baltimore, Chicago, Atlanta, St. Louis, Seattle, San Francisco and Los Angeles. These life experiences have given me an appreciation for what makes vibrant cities work. Walking down Lisbon Street the question occurred to me: Do cities and towns, like media, possess attention economy attributes that help fuel their success, or lack thereof?  The largest urban economies like New York and San Francisco are able to cater to many diverse demographics and interests. They have something, in fact, many things, for everybody, and for that they demand a lot of attention.  But smaller cities have a harder time catering to wide spectrums of people or satisfying wide ranges of interests. In order to succeed, smaller markets must become associated and identified with specific areas of richness.

My current hometown of Portland Oregon is adept at cultivating and promoting the special associations that give the city much of its character, history and identity. Portland is known to be a hub for outdoor activities like biking, hiking, running, skiing, windsurfing and climbing. Nike and Columbia Sportswear have helped Portland become a international leader in outdoor and athletic apparel. Portland’s independent spirit has helped it become a national leader in many indie industries and cultures, from coffee roasting, beer brewing and DIY music to chicken keeping and gardening. Portland has been successful promoting itself as an international center for sustainability and green living, as well as a leading hub for computer processors, Open Source Software development and technology Start-ups. Smaller Oregon markets like Bend, Ashland and Cannon Beach have become successful centers for experience, from shopping and dining, to outdoor recreation and the arts.

Some of Maine’s most distinctive coastal communities like Portland, Freeport, Bar Harbor and Boothbay Harbor have become strongly associated with the environmental, historic and commercial assets that make Maine a distinctive place. These smaller cities demonstrate the importance of creating a cultural identity to help grow a sustainable economy. Markets with focused identities create attention, and that attention helps fuel growth.

distcourtLewiston’s rich historic associations served it well in the old days. The city was built on its manufacturing prowess, especially in areas of textiles and footwear, and on its strong Franco-American culture. Today Lewiston is a city struggling to navigate from that past into the future. Perhaps Lewiston’s most important decisions regarding its future identity, culture and economy have yet to be made.

As I applied these attention economy principles to my morning stroll I realized that I was experiencing Lisbon Street for the first time as a person of experience: as a marketer, an urban dweller, a critical observer, a parent, and a concerned former resident. I can now recognize and separate the shell of downtown Lewiston’s hope-filled past from the economy that currently inhabits it.

For example, as a big fan of music and the arts, I’m surprised that I’ve never noticed the beautiful old Music Hall called the Frye Block. It’s just never caught my attention. It’s now a Maine District Court. I’ve since learned that the building was the location of Lewiston’s leading hardware store when downtown still served as the city’s main shopping district. But I still know nothing of its original history or the role it played in the lives of early residents.

Applying my experiences cultivating attention economies online, I asked myself what downtown Lisbon currently stands for as a real-world environment. Who utilizes this marketplace today? What characterizes and distinguishes its value proposition, identity and gravity well? Whose attention does it work to attract?

As I walked down this beautiful historic street, with its exposed cobblestone and early century charm it was clear that just a few of the street’s locations were serving 98% of the pedestrian traffic out and about on this particular morning. Those were, in order of volume: the District Court, Labor Board, the Library’s free sidewalk Wi-Fi, the Pawn Shops and Law Offices. If this traffic represents the market, than this early morning economy was clearly focused on the regions underemployed, undereducated and underprivileged.

signlessThis goes to the heart of what any attention economy faces, which is that of perception, identity, experience and relevance. There was little to be found this morning that would cater to or interest the larger populations found strolling through the regions malls and super markets, which explains why most Lewiston residents ignore this downtown environment and why it’s been so difficult for a new mainstream economy to take hold here. The easiest way to measure the value of a marketplace is to image it as a network, remembering that a network’s users and operators help define its character, culture and value.

A downtown economy can cast a light or a shadow on what outsiders believe a community is about, affecting the kind of  attention the community inevitably receives. It was only after I left Lewiston in ’84 that I learned that outsiders often viewed my childhood home as rough and tumble place.  A scary place.  A place to be avoided.  I knew that Lewiston wasn’t that, and had long wondered where this negative perception and reputation originated. Yet on this very morning I watched as downtown Lisbon St. perpetuated an identity that is counter to that which successful downtown markets, or any successful attention economies, work to create. When the heart of a city fails to attract and serve it’s residents the community reputation and identity can pay a price.

Today, like most cities,  Lewiston and Auburn residents rely heavily on their regional shopping centers for shopping, dining and entertainment. But the suburban attention economies and corporate experiences that superstores, malls and plazas provide are indistinct and homogeneous. They offer uniform, garden variety experiences found in every market across the  country.

43_lisbonWhat downtown Lisbon Street offers that’s unique and distinctive is a string of early period store fronts and environments that can be refashioned to serve modern needs and deliver uncommon experiences. Today cities can’t afford to build downtown structures like the Gateway at 5-11 Lisbon Street, or the vacated Depositors Trust Building at 55 Lisbon Street, or the long abandoned space at 43 Lisbon Street (pictured above) with its grand open floors and antique tin ceilings. I’ve had many memorable shopping and dining experiences over the years at establishments built into reconditioned spaces just like these, often wishing that my hometown had possessed such distinguished public environments. What a surprise to discover that Lewiston has the distinctive old bones found in much larger markets. But how does a community begin to create a new economy around an undefined, unrealized and neglected downtown district? It can start by recognizing that it possesses the kind of distinguished urban assets that many towns and cities wish they had, and can’t afford to build… and by creating a new economy that leverages and promotes these assets.

Many of Lewiston’s old mills are being refashioned into modern shops, businesses, bars and restaurants. Lewiston’s reinvention from a manufacturing economy to a distinctive modern marketplace is already underway. Lisbon Street’s future identity seems the big challenge ahead. Glimmers of the street’s future richness can be found in the new businesses popping up that are representative of the kind of experience-driven offerings found in larger markets.  A new restaurant called Fuel and an adjacent art gallery exhibit a modern urban sophistication that feels very much in sync with it’s historic surroundings. A new Indian restaurant called Mother India hints that a more diverse, international flavor could eventually take seed.

fuelWhatever the nature of the economy that eventually characterizes this area, Lewiston would be wise to continue to reclaim and protect the street’s valuable urban assets, while working to support the entrepreneurial culture that’s begun to take shape. The easiest way to support a progressive business culture is to enjoy it’s fruits. Residents should make a point of visiting the new environments and offerings that pop up, and supporting the local entrepreneurs and investors who are willing to take personal risks to bring new jobs, opportunities, culture and experiences to the city.

Residents should make a point of visiting downtown Lisbon Street to experience the local character and uncover the city history that abounds. They should engage the new Somalian shop keepers to help their new international transplants become a working part of the street’s community and culture. Most importantly, they should help create or support new businesses, opportunities and experiences that reflect and serve both the current community and the identity that they envision for the future.

Turning an ailing attention economy around is hard work, but worth the effort, as the economy owners will continue to grow and monetize their assets, investments and the attention they create over time. In the case of Lisbon Street, the economy owners are Lewiston resident. What can residents gain by turning this under-appreciated downtown environment into a welcoming, robust and singular experience? A stronger community. A renewed regional reputation. A prouder local identity. In short, all the cultural assets that translate into jobs, tourism, quality-of-life and rising home values.

Discussing and creating a framework for a community vision maybe helpful for creating a marketplace that successfully accommodates and serves the city’s current culture while working to instill an identity that residents, visitors, neighboring communities and transplants alike can connect with. Without community discussions and involvement, the city’s old identity may feel at odds with the new, more cosmopolitan businesses and environments that emerge, and that disconnect can cause investments to fail. Lewiston’s residents should explore what other small to midsized cities have done to reinvent and revitalize their historic downtown assets and environments, as well as understand how such transformations occur, and how they benefit the whole of the community.

An interesting case study for how a well-defined attention economy leads to exponential growth for a small city is Freeport Maine. Here is a bit of important Freeport history…

L.L.Bean was founded by an avid hunter and fisherman who developed a waterproof boot and set up a shop in his brother’s basement in Freeport, Maine. By 1912  he was selling the “Bean Boot,” or Maine Hunting Shoe, through a four-page mail-order catalog, and the boot remains a staple of the company’s outdoor image. –excerpt from Wikipedia

Freeport is an example of how a single innovative entrepreneur gave a small town a distinctive commercial identity. Today Freeport’s economy sustains over 200 upscale outlets and shops, making this small community one of Maine’s leading tourist destinations. Freeport has succeeded by pulling a singular “attention economy” up by its Bean bootstraps. Imagining what Freeport would look like today if Leon Leonwood Bean hadn’t set up shop is equal to trying to image what Lewiston’s downtown would look like if Benjamin E Bates hadn’t built his mill on the banks of the Androscoggin River back in 1850.

cobblestonesEvery marketplace can be considered an economy of attention. The attention you create is the attention you grow on. The success of small cities depends on how well they define, cultivate, protect and promote the community’s distinct assets. Through the principles of attention economics a city can build and market a focused identity that residents, visitors, business owners, entrepreneurs, investors and neighboring communities can connect with, participate in, and leverage. Lewiston has an opportunity to turn local and regional attention into a valuable new currency by focusing its own attention on reviving this singular urban district.

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Attention economies and the ad-driven business model 05/20/2008

Posted by Paul Daigle in Advertising, Attention Economy, Internet Business Models.
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AttEcoThe value of most online companies will remain tied to their ability to turn usage and page-views into dollars. This makes the creation and sales of effective advertising opportunities as important as winning users for many companies.

Pursuing an ad driven business model isn’t a sure path to profitability, as even big online successes struggle to attract and grow ad revenue. So, how viable is the online advertising model for most companies?

I believe online advertising is both viable and important for a majority of Internet companies that serve more than 10,000 users per month.  Advertisers do more than pay for linked real estate. By associating themselves with your brand they substantiate the value you’re creating, and the value of the users you’re attracting. When done right advertising also gives  users access to a wider range of relevant products, services and resources. Building a healthy ecosystem of paid advertisers, business partnerships and affiliates can make your site more valuable and attractive to users and potential buyers.

To qualify your ad revenue potential, first take a close look at your audience membership and what they share. What ties your community together? What distinguishes your content or technology. Are you able to  locate a healthy universe of advertising and business development prospects that can help your users and communities succeed in their common pursuits? Is so these are the very companies that you can help succeed through comprehensive and custom-tailored ad programs.

If your site or site channels are built to serve specific user missions, affinities, demographics or activities you’ll have an easier time selling ads and keeping rates high. Synergistic environments in which site operators, users and marketers share closely aligned missions and purposes create ecosystems of interdependent concerns. Good examples of these are sites that focus specifically on woman, job seeking or music,  or channels that deal specifically with auto, gaming or finance related content. Targeted usage provides the opportunity for companies to compete for placement, which is instrument in sustaining and increasing ad rates over time.

Anyone who has sold advertising has heard prospective advertisers say “I don’t pay attention to banner ads and I don’t think other people do either.” How many of us would say that we actually pay attention to advertising? When we think about online advertising we think about loud, alluring, provocative, predatory or otherwise distracting ad content found on most websites. We have all become conscious of having to withdraw our attention in order to stay on mission. If we don’t do so, we can’t focus. But when users see ads of high interest, the thought that they are being targeted or distracted goes away completely because relevant messages often feel more like points of interest or valuable opportunities than distracting sales pitches.

“Attention economics today is primarily concerned with the problem of getting consumers to consume advertising. Traditional media advertisers utilize a linear model that consumers go through – Attention, Interest, Desire and Action. Attention is therefore crucial. -WikiPedia”

Consider user attention the new online currency. When your users give you their attention, repaying that attention with relevance will earn you and your advertisers more and more of their future attention. This creates conditions where your users and the advertisers who are capable of serving them can come together. The more relevant the content that each user experiences, the more attention they will be willing to spend in the future. Because most users have conditioned themselves to consume web content without investing their attention outside the content well, creating tailored environments where users are comfortable experiencing the entire page is important to maximizing the value of your inventory.

Within an attention economy advertising is considered consumable content. Therefore you must learn to view the kind of advertisers you work with and the types of ads they run on your site as important to your economy’s long term health and sustainability. Most of today’s online ad creative screams for attention because it must fight to compete for attention in economies built on distraction. It’s your job to help your advertisers understand that screaming ads in a high-quality and high relevance attention economy will only communicate desperation. Keep it clean, keep it tasteful and most importantly, keep it focused on the needs of the user.

So how to begin? Start by understanding that you have to start somewhere.  Most sites are best served by starting with business development relationships and affiliate programs that help create a advertising foundation and set the tone for what distinguishes the site’s community, channels and assets. It’s also better to start with small advertisers who can succeed with your audience than larger, less targeted campaigns that will fray user attention. You’re goal is to work to keep your ads and business partners aligned with your site mission and audience. When large “eyeball” marketers with big budgets come calling, always consider whether their participation on your site will help you build an economy of attention or distraction. When your environment leans towards distraction, every participant of your community and economy will pay a price. Remember, having dozens of competing and relevant advertisers will produce a competitive marketplace where your ad rates can go up. These relationships are much more important than those big budget “eye ball” advertisers that will never pay top dollar for your audience.

The following describers are helpful in assessing the health of a website’s attention economy. As you visit websites ask yourself if their economy is based more on attention or distraction. How do these characteristics effect your relationship with the site, and the way your attention is spent there?

Attention Economies are:

  1. Focused
  2. Relevant
  3. Personal
  4. Engaging
  5. Safe
  6. Interesting

Attention Economies create:

  1. Purpose
  2. Options
  3. Value
  4. Community

Distraction Economies feel:

  1. Unfocused
  2. Random
  3. Isolating
  4. Noisy
  5. Suspect
  6. Predatory
  7. Distracting
  8. Diverting

Distraction economies create:

  1. Fatigue
  2. Confusion
  3. Wilderness

If you can succeed in keeping your attention economy healthy, and in building synergistic environments that are sustainable, reaching a critical mass of marketers and users should provide the following Network Effects:

  • Advertiser response rates, conversion rates and renewal rates that are well above industry averages.
  • Users that visit more often and stay longer.
  • An advertising market place where competition for your best inventory justifies healthy rate increases.

These are the attributes that keep effective CPMs and total ad revenue potential on the rise, leading to a healthy and profitable Ad Driven business.