Crossposted to: CanadianEconomist.com
If you read one article today, make it THIS one by Jason Fry of the WSJ. The crystal of insight offered into the state of blogging is that most blogs, while alive, are ‘dead’. They are dead in the sense that nearly 90% of them haven’t been updated in three months.
Blog measurement is another mess. The latest word from Dave Sifry, CEO of the blog search engine Technorati, is that there are some 28.4 million blogs and the blogosphere is doubling in size every 5.5 months. Eye-popping figures like that have been thrown around a lot recently, but folks making revolutionary claims about blogging won’t like other Technorati numbers: Less than half of those blogs are still getting posts three months after their creation, and less than 10% — just 2.7 million — are updated at least weekly. That means of Technorati’s blogs, more than 90% are either abandoned or updated too rarely to merit the name — nothing kills reader interest or visits more quickly and thoroughly than a stale blog.
Still, 2.7 million active blogs is impressive. But how should we measure their audience? Technorati does so by looking at incoming links, which is the closest thing the blog world has to an industry standard, but doesn’t tell the whole story — not with search engines and news aggregators shooting blog posts out into the general fray of the Net.
I’ve learned this first hand: When my friend Greg Prince and I started our baseball blog, Fear and Faith in Flushing, our moods used to soar and crash based on the “referrer summary” of sites that had linked to us. After a while, we noticed something odd: Our traffic kept increasing, even as our referrers held steady or decreased. Then we realized this was a good thing: Readers were coming directly to us instead of through intermediaries. Being part of a blog community is valuable, but it isn’t everything. (If you’re so inclined, read more about my blogging misadventures in this Real Time from October.)
You read it – less than 10% of all blogs are updated weekly. Blogging, it seems, is still in the “tire-kicking” phase of its development in the sense that people are giving it a try, perhaps finding it not to be what they thought and abandoning it. It seems as though the information superhighway is full of stalled or burnt-out vehicles called blogs. Perhaps that’s not the best analogy.
A better analogy might examine the blogosphere as a global conversation. And as the writers of the Cluetrain Manifesto wrote, “All markets are conversations”. But are all conversations markets? They certainly are. Marketplaces are where buyers and sellers go to exchange information about their commodities – the sellers give out information about their products to buyers who need to make a relatively informed choice among some array of alternatives.
In the global conversation market, bloggers are the sellers of information and their readers are the buyers. Believe it or not, reading or writing a blog entails a cost. Economists call this cost an ‘opportunity cost’ or the value of the next-best alternative. For example, I could be sleeping right now, but choose to blog. That implies I value blogging more than sleep at this particular moment. You, on the other hand, may be reading this at work. The cost to you or your employer is the value of the productive activities you could be engaged in. But if you hate your job, you probably value reading blogs more highly than work (though your employer doesn’t). The point is, the activity of reading this blog is the highest-valued activity (to you, specifically) relative to your available opportunities. If you are paid $20 an hour and you spend fifteen minutes reading my blog today, the cost to your employer is $5. If you are raeding this at home, the cost to you might be not getting all your chores done, or missing some TV show.
As in any market, the seller exchanges a commodity for currency. The seller values that currency not for its intrinsic value (paper is worthless!), but for what the currency can in turn be exchanged for. Bloggers are much like the sellers of information in the sense that they produce content. The currency of the blogosphere is attention. Why is attention the currency of the blogosphere? Well, in order for something to be ‘money’ it must perform three functions: 1) A unit of account, 2) a store of value and 3) a means of exchange.
Think about an excellent blog post in recent memory. This post’s value will be measured in terms of the links it has received from other blogs (which affects its ranking in google), by the comments it receives as well as by the number of direct hits the post gets. Some bloggers choose to turn their comments off, which blurs their status as being a ‘blog’, but the point is, highly valued blog posts get plenty of attention. The problem, however, is settling on a univerally agreed upon measurement of value. Absolute traffic levels might seem like the way to go, but bots patrol the web 24/7, so unless your traffic counter is set up to exlude them, the value of your particular blog or blog post could be highly over valued. Comments might be a decent measurement of a blog’s impact due to the controversy or level of discourse it generates, but trackback and comment spam account for a certain portion of comments and so again, this measurement over-values the information.
My Dad recently told me something: nothing happens until somebody sells something. Well, in the blogosphere, nothing happens until somebody pays attention. You could have the best blog in the world, but unless somebody links to it, comments on it or visits it, your blog receives no market value. It may have intrinsic value, however. The information provided on your blog may be invaluable in the sense that it documents current events for future reference, but market value is only realized once an exhange has taken place.
Economics is really about how people allocate limited goods in a world of potentially unlimited wants. Attention economics, then, is about how we allocate attention in a world of possibly unlimited demands. If you think about it, somebody’s always trying to get your attention. Just driving down the street will illustrate this. Traffic signs are trying to get your attention to warn you about construction. Stores have signs near the road advertising sales. People with nice cars have their steros turned up. And, depending on what area of town you are in, there’s the prostitutes.
Life is just one big bid for attention. Newborns demand it of their parents, and their development is contingent on receiving enough of it. People dress in order to get it. Workers, seeking to advance their careers, try to obtain it from their bosses. Bloggers try to get it through generating cool content for others to read. Celebrities are rumored to engage in fake marriages if it will get the attention of the media. Most, though not all people, derive a sense of self-worth from the amount of attention they are able to obtain from others.
The blogosphere is a global conversation market where sellers of information (bloggers) exchange this commodity for currency (attention), paid by the buyers (blog readers). The amount of attention paid by blog readers varies, however. I might get a few hundred hits to this post via google searches for ‘the economics of blogging’, but 90% of those hits might last for mere seconds as potential readers assess this information and find it might not be what they are looking for. This is why hits are not the best measurement of value in the blogosphere. If I looked to my traffic logs and found that most readers spent five minutes reading this post, and maybe even posted a comment or linked to it on their own blog, I might conclude they actually paid me some attention.
What this implies about the blogosphere, then, is that a possible unit of value in the blogosphere is a composite of comments (filtered for spam), hits (filtered for bots), links and an ‘appropriate’ amount of time required to read a post. For example, if you left your computer for five hours and had this post on the screen, my traffic logs would indicate this. I would know you spent five hours here, but you may have just left the browser window open in an attempt to return to it later. I guess attention is a difficult thing to measure.
One would not necessarily conclude that money is the only unit of value in the blogosphere. Some bloggers might have high traffic levels, lots of discussion and they may get plenty of outside links to their posts. But what if they choose not to have revenue-generating ads on their blogs? They’re still generating something of value to people, but they aren’t converting their attention into money through ads. Ah, but perhaps they don’t know how to put ads on their blogs, or they just don’t have a lot of confidence in their content.
They may just have a different optimization path than the usual blogger. I would venture to guess that if you looked at a blog that was obviously garnering plenty of attention on a consistent basis and offered incremental amounts of money on a per-click or per-hit basis, eventually any blogger would cave and allow ads on their site. They might be concerned about being able to choose the look of their ads or the ability of advertisers to influence content, but every blogger has a financial breaking point; who wouldn’t want to blog for a living?
