Value

The concepts below use my own terminology.

Value is a representation of what someone is willing to lose to gain something else. What is gained in exchange can be tangible, such as purchasing a physical object, or intangible, such as purchasing access to data in order to refine your marketing data.

Everything that can belong to someone can have value, including basic demographic information and attention.

Breaking It Down

For the sake of this discussion, value is made up of two factors: Personal Value and Actual Value.

Personal Value is the threshold at which an individual will give something up in exchange for something else. Put one way - I really like this rock I found in my driveway, so I say it’s worth $1,000. The only way I will give it up is if someone offers me $1,000 or I lower my personal value.

Actual Value is the point at which two or more individuals decide a trade is equal. For example - if someone offers me $500 for my driveway rock, I can counter by reducing my Personal Value to $750. They accept, so the Actual Value of the driveway rock was established at $750. When something has a positive Actual Value, it is called an ‘asset.’

Value is a tricky beast. Because it relies on the agreement of multiple parties, it can vary widely. Luxuries become worthless in times of famine. That driveway rock you bought for $750 only holds Actual Value if someone else wants to buy it. There are a few ways Actual Value can be determined, depending on the system of trade that is used.

The Value Of Attention And Data

In the modern economy, there are companies that exist solely to extract every second of attention and data possible from an audience, then sell that data on to advertisers. By the definition above, this means that both attention and data have Actual Value despite being intangible. The advertising industry is founded upon this.

An audience can't purchase your product if they don't know about it - and they won't purchase your product if you're talking to the wrong audience.

To sell a product, you pay advertisers to try capture the attention of an audience. If you're not selling enough of the product, data analysis can be used to refine the audience and increase the likelihood of sale.

Every bit of data about an audience, ranging from demographics (age, sex, dispositions) to hobbies, allows advertisers to create audience segments and run ads to specific groups that are more likely to make a purchase.

These bits of data have negligible value alone, but in aggregate contribute to the global advertising business - worth over $800 billion.