Every market has a lifecycle consisting of growth and saturation. When the first iPhone created a new market for smartphones in 2007, competitors immediately jumped in. Google provided Android for free in 2008 with the first phone, an HTC, launching the same year. That same year, Microsoft dropped out of the race. In 2009, Samsung brought its first smartphone, the Galaxy, to market. Huawei launches its first smartphone in the same year. One year later, Google launches the Nexus. The wave is rolling.
Blackberry, which still had 20% market share in 2010, starts to crumble in 2011. The same year, Google bought the mobile unit of Motorola. Xiaomi launched its first smartphone. In 2014, Amazon launches the Fire Phone and fails. The smartphone market matured and incumbents solidified their positions.
Every market starts with growth and ends with consolidation.
We are currently in a similar situation with organic growth. Growth is harder to come by as we get less organic traffic and find more competition from Google itself in the form of SERP Features. Even paid growth sees diminishing returns. ROAS shrinks, CPCs/CPMs are rising.
Attention is critical for distribution but it’s harder to come by. The day has 24 hours, we sleep about 8 and work for 8. That leaves about 8 more hours for anything else, from eating to working out and entertainment.
We often say attention spans get shorter, but consumers still binge Netflix for a week or watch hour-long Youtube videos. Consumers get more selective with their attention, but you can only consume so many newsletters, use so many apps, watch so many videos, and do so many searches on Google.
That doesn’t leave a lot of room for brands who want to reach a lot of customers. You could say we’re in an attention consolidation phase.
How to buy attention
As you can guess, one of the fastest ways to get attention these days is to buy it. I’m not talking about ads, but about buying platforms that already get attention: websites, newsletters, forums, apps, podcasts, youtube channels.
We’ve seen plenty of examples over the last years:
- Hubspot → TheHustle
- JPMorgan → The Infatuation
- Square → Tidal
- Robinhood → MarketSnacks
- Stripe → Indiehackers
- Business Insider → Morning Brew
- Amex → Resy
Acquisitions don’t just have to make an impact, they also need to fit the brand. Amex buying Resy makes sense because it’s used in high-class restaurants. Stripe bought Indiehackers because it’s an early gateway to startups that could use Stripe. PayPal almost bought Pinterest, which is full of inspirational content leading up to purchases.
Square bought a whole range of companies, from music streaming service TIDAL to Weebly, or Afterpay. Altogether, Square got over 132,000,000 visits (think: eyeballs) to its ecosystem of apps and services. Mighty leverage.
You could even argue that influencers are an attention platform. Spotify bought Joe Rogan and a whole roster of other podcasters. Hubspot owns a full podcast network.
Buying attention = building an audience
Microsoft made three big acquisitions since Satya Nadella became CEO in 2014: Minecraft, Linkedin, and Github. The commonality? They’re all communities!
As I wrote in an article about online communities in 2017, being less dependent on organic search and paid ads is a good thing. Online communities can become their own little channels of acquisition and retention. But they can also nourish an audience, even when it’s not ready to convert yet.
Similar to how it pays off to buy sites for link building, companies can buy attention by acquiring communities and publishers. It’s easy to follow when public companies to it, but happens deeper in the shadows for smaller players like startups. I argue that’s an underleveraged channel, especially for well-funded startups. Instead of building an audience, why not buy one?