Competing for Attention on Digital Platforms: The Case of News Outlets

Competing for Attention on Digital Platforms: The Case of News Outlets

Tim Meyer

Bocconi University, Department of Management and Technology

Anna Kerkhof

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Carmelo Cennamo

Copenhagen Business School - Department of Strategy and Innovation; SDA Bocconi

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Abstract

Platforms are often assumed to benefit firms, especially smaller ones, by facilitating access to a broader consumer base and increasing visibility. However, this logic relies on platforms’ ability to match consumer preferences to complement characteristics. In addition to this matching mechanism, we posit that platforms also broker consumer attention towards complements, which then compete for this attention. We propose that this attention mechanism is particularly prominent in settings where complement characteristics cannot be observed ex-ante, and argue that complementors with larger scale and broader scope are better positioned to capture attention than smaller and less broad ones. We formalize and test this intuition in the context of news aggregators, highlighting the significance of complementors’ ability to draw attention in evaluating
their benefits from platform participation.