The reason apps that don’t have any revenue but millions of users are worth so much is because “attention is monetizable”. The assumption is that once advertisers are able to access all of that attention they’ll pay a lot for the privilege for putting their ads in front of it. But money shouldn’t always follow where the most eyeballs are. It’s possible that all the attention in the world can’t make up for a medium that is just bad for advertising.

I really like Bob Hoffman’s idea that the best mediums for advertising are those that are entertainment mediums like TV and Radio because you are accustomed to entertainment media carrying advertising. The internet is part communication medium, part information medium, and part entertainment medium. Meaning that when you are using it for any reason other than entertainment the advertising gets in the way, is ignored and is ineffective.

From Bob:

“What if you picked up the telephone and instead of getting a dial tone you got an ad?

What if you picked up a dictionary and instead of finding a definition you found an ad?

In both cases you’d be angry. Why? Because the telephone is a medium of communication and you don’t want to be slowed down. The dictionary is a medium of information and you don’t want to be sidetracked.”

Those high value/high attention apps are more like telephones and dictionaries. This isn’t to say that advertisers won’t spend a ton of money on ads in front of that attention – the ways advertising budgets are squandered are infinite – I’m just saying it could have been better spent elsewhere.