The Attention Economy is Worth Billions of Dollars by@lomitpatel
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The Attention Economy is Worth Billions of Dollars

July 24th 2022
5 min
by @lomitpatel 2,079 reads
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As more brands increase ad spending across various channels to acquire new customers, the average cost of expanding your customer base continues to climb yearly. For every 24 hours, Americans spend on average only 5.94 online, which means that companies only have those six hours every day to get the right messaging in front of the right audience and convert them into customers. The secret to scaling customer growth in a startup is running as many A/B tests as possible. The only way to survive and thrive in a highly competitive world is by getting a startup team to implement new ideas quicker than anyone else.

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@lomitpatel

Lomit Patel

Lomit Patel is a growth executive and author of Lean...

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For any business, the goal is to create sustainable and systematic customer acquisition strategies that keep revenue and profits flowing while keeping up with industry trends. As more brands increase ad spending across various channels to acquire new customers, the average cost of expanding your customer base continues to climb yearly.

The average consumer’s attention is now worth billions of dollars because that’s how much companies spend on their user acquisition efforts across mobile, desktop, television, radio, and voice assistants. Every digital interaction is an opportunity for brands to bombard users with advertisements to turn their attention toward their product or service.

While we may not think about it through this lens often, the fact is that human attention is a finite resource. For every 24 hours, Americans spend on average only 5.94 online, which means that companies only have those six hours every day to get the right messaging in front of the right audience and convert them into customers. With endless demand and a finite supply, human attention is arguably one of the most valuable resources in the world—companies are constantly competing for your attention and your wallet. And the race for your time and money has only gotten tighter thanks to the addition of the apps and channels we use to live, work, learn, and play like Google, Facebook, Instagram, YouTube, Amazon, Netflix, Pandora, and Fortnite, among many others. If six hours per day are spent online, then taking time

On social media, streaming and gaming sites reduce “marketable” hours to a small fraction of each day. But that’s where the challenge, and the opportunity, lies.

How you bring new consumers to your business is customer acquisition, also sometimes referred to as “user acquisition,” depending on the type of products or services you’re offering. Given the demand to command human attention, one of the top challenges for any startup is cost-effectively acquiring and retaining new customers.

In the beginning, most startups struggle to find users or customers. No wonder: if you’ve got a new product or service, very few people will be familiar with it or your brand. Regardless of your business or startup size, acquiring customers profitably is critical to running a business. It also provides traction for your startup to customers, partners, investors, influencers, and prospects. All future startup growth depends on two things: acquire customers fast and acquire customers sustainably.

Most startups generally work with contractors or marketing agencies in the early days to help with growth marketing. The general approach tests different paid and organic user acquisition channels to determine what works and doesn’t. No generic growth playbook is guaranteed to work across all various startups because every business is unique. I can confidently say there is no silver bullet to drive growth.

The secret to scaling customer growth in a startup is running as many A/B tests as possible. A/B testing, as it’s commonly referred to, involves testing a set of independent variables (offer, copy, pricing, etc.) to find statistically significant improvements toward reaching your business goals.

This approach would lead you to test, learn, and iterate as quickly as possible by finding small wins that end up compounding into massive growth in the long term. The A/B testing and hypothesis development must be scientifically based on best practices, observable evidence, and statistical significance. But as an organization, the big takeaway is not to sit back and suffer from “analysis paralysis,” where overthinking gets in the way of making decisions, working against your ultimate objective.

Your most considerable leverage is to figure out how to increase the volume and velocity of experiments and tests you can run across the entire customer journey from different prospecting and retargeting channels as well as product features and experiences to help you better engage retain, and monetize customers. The lifeblood of any startup is cash in the bank because you need to pay your expenses. The most significant expense for most startups—second only to payroll—is their user acquisition budget that the head of growth manages.

But there’s a problem with this conventional approach to scaling user growth in startups. Successful businesses following this paradigm can become highly dependent on people to help execute all the different A/B tests, which are both time and labor-intensive. When I think about the next generation of growth teams, they will have to be much quicker in execution with the increasing pace of change in today’s world. Everything happens much faster now with even more pressure to produce results that are being tracked in real-time. It’s hard for any startup to build a successful growth team quickly. The future will involve leveraging AI in growth marketing. The only way any startup can survive and thrive in a highly competitive world is by getting A/B testing ideas quicker and implementing them faster than anyone else because global competition means the time frame you have is shorter and shorter.

There is a more innovative approach on the horizon, and becoming familiar with the pros and cons of this new way of thinking presents a significant opportunity for businesses, leaders, and employees. Today, we can leverage artificial intelligence and machine learning to enhance and manage your user acquisition channels, radically accelerate the velocity of A/B testing all the key variables (like audiences, geographic markets, creatives), and process all your user data faster to uncover better insights and make smarter decisions on where to invest your user acquisition budget to get the best return on investment (ROI).

These powerful marketing platforms have application programming interface (API) connections, making capturing and sharing data much easier to automate the critical levers for optimizing campaigns without being dependent on humans. There is no better time to leverage these ideas, strategies, tools, and technologies to scale up your startup growth and stack the odds for success in your favor. Check out my book Lean AI to learn more about how growth marketing and technological advances can help your companies survive and thrive in a downturn economy.

About the Author

Lomit Patel is a passionate leader with deep expertise in helping startups grow into successful businesses. Lomit has played a critical role in scaling growth at startups, including Roku (IPO), TrustedID (acquired by Equifax), Texture (acquired. by Apple), and Together Labs (formerly IMVU). Lomit is a public speaker, author, advisor, and recognized as a Mobile Hero by Liftoff. Lomit's book Lean AI is part of Eric Ries' best-selling "The Lean Startup" series.

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