The Split-Second Timing of Brand Trust

Two weeks ago, I talked about how brand trust can erode so quickly and cause so many issues. I intimated that advertising and branding have become decoupled — and advertising might even erode brand trust, leading to a lasting deficit.

Now I think that may be a little too simplistic. Brand trust is a holistic thing — the sum total of many moving parts. Taking advertising in isolation is misleading. Will one social media ad for a brand lead to broken trust? Probably not. But there may be a cumulative effect that we need to be aware of.

In looking at the Edelman Trust Barometer study closer, a very interesting picture emerges. Essentially, the study shows there is a trust crisis. Edelman calls it information bankruptcy.

The slide in trust is probably not surprising. It’s hard to be trusting when you’re afraid, and if there’s one thing the Edelman Barometer shows, it’s that we are globally fearful. Our collective hearts are in our mouths. And when this happens, we are hardwired to respond by lowering our trust and raising our defenses.

But our traditional sources for trusted information — government and media — have also abdicated their responsibilities to provide it. They have instead stoked our fears and leveraged our divides for their own gains. NGOs have suffered the same fate. So, if you can’t trust the news, your leaders or even your local charity, who can you trust?

Apparently, you can trust a corporation. Edelman shows that businesses are now the most trusted organizations in North America. Media, especially social media, is the least trusted institution. I find this profoundly troubling, but I’ll put that aside for a future post. For now, let’s just accept it at face value.

As I said in that previous column, we want to trust brands more than ever. But we don’t trust advertising. This creates a dilemma for the marketer.

This all brings to mind a study I was involved with a little over 10 years ago. Working with Simon Fraser University, we wanted to know how the brain responded to trusted brands. The initial results were fascinating — but unfortunately, we never got the chance to do the follow-up study we intended.

This was an ERP study (event-related potential), where we looked at how the brain responded when we showed brand images as a stimulus. ERP studies are useful to better understand the immediate response of the brain to something — the fast loop I talk so much about — before the slow loop has a chance to kick in and rationalize things.

We know now that what happens in this fast loop really sets the stage for what comes after. It essentially makes up the mind, and then the slow loop adds rational justification for what has already been decided.

What we found was interesting: The way we respond to our favorite brands is very similar to the way we respond to pictures of our favorite people. The first hint of this occurred in just 150 milliseconds, about one-sixth of a second. The next reinforcement was found at 400 milliseconds. In that time, less than half a second in total, our minds were made up. In fact, the mind was basically made up in about the same time it takes to blink an eye.  Everything that followed was just window dressing.

This is the power of trust. It takes a split second for our brains to recognize a situation where it can let its guard down. This sets in motion a chain of neurological events that primes the brain for cooperation and relationship-building. It primes the oxytocin pump and gets it flowing. And this all happens just that quickly.

On the other side, if a brand isn’t trusted, a very different chain of events occurs just as quickly. The brain starts arming itself for protection. Our amygdala starts gearing up. We become suspicious and anxious.

This platform of brand trust — or lack of it — is built up over time. It is part of our sense-making machinery. Our accumulating experience with the brand either adds to our trust or takes it away.

But we must also realize that if we have strong feelings about a brand, one way or the other, it then becomes a belief. And once this happens, the brain works hard to keep that belief in place. It becomes virtually impossible at that point to change minds. This is largely because of the split-second reactions our study uncovered.

This sets very high stakes for marketers today. More than ever, we want to trust brands. But we also search for evidence that this trust is warranted in a very different way. Brand building is the accumulation of experience over all touch points. Each of those touch points has its own trust profile. Personal experience and word of mouth from those we know is the highest. Advertising on social media is one of the lowest.

The marketer’s goal should be to leverage trust-building for the brand in the most effective way possible. Do it correctly, through the right channels, and you have built trust that’s triggered in an eye blink. Screw it up, and you may never get a second chance.

The Deconstruction of Trust

Just over a week ago, fellow Insider Steven Rosenbaum wrote a post entitled “Trust Is In Decline Worldwide.” He quotes from the Edelman Trust Barometer Report for 2021. There, graph after graph shows this decline. And that feels exactly right. The Barometer “reveals an epidemic of misinformation and widespread mistrust of societal institutions and leaders around the world.”

Here in the ad biz, the decline of trust is nothing new. We’ve been seeing it slip for at least the last decade.

But that is not a universal truth. Yes, trust in advertising is in decline. But trust in brands — at least, some brands — has never been higher. And that is indicative of the decoupling we’re seeing between the concept of brand and the practice of advertising. One used to support the other. Now, even when an ad works, it may be stripping the trust from a brand.

This decline in advertising trust also varies from generation to generation. An Ofcom study in the UK of young adults 16 to 34 found that 91.6% of all respondents had little or no trust in ads. The same study found that if you were looking for trustworthy sources, 73.5% would go to online reviews or recommendations of friends.

One reason for this erosion in trust is that advertising has been slumming. Social media advertising is the least trustworthy channel that exists. The vast majority of us don’t trust what we see on it. Yet the advertising dollars continue to pour into social media.

Yet more than ever, we want to trust a brand. The Edelman Report shows that business is the most trusted institution, ahead of NGOs, government and media. And the brands that are rising to the challenge are taking a more holistic approach to brand management.

More than ever, brands are not built on advertising. They are built on consumer experience, on ideals and on meeting promises.  In short, they are built on instilling trust. Consumers, in turn are making trust a bigger deal. Those aged 18 to 34, that very same demo that has no trust in advertising, is the first to say brand trust matters more than ever. They’re just looking for proof of that trust in different places.

But why is trust important? That seems like a dumb question, but it’s not. There are deeper levels of understanding that are required here. And we might just find the answer in southern Italy.

Trust to the north and south of Naples

Italy has an economic problem. It’s always been there, but it definitely got worse after World War Two. It’s called the Mezzogiorno Problem.

Mezzogiorno means “noon” in Italian. But it’s also a label for the south of Italy. Like many things in Italian culture, it can make even problems sound charming and romantic. It has something to do with being sunny.

Italy has two economies. The North’s economy has always been more robust than the South’s. Per capita income in the Mezzogiorno is 60% of the national average. Unemployment is twice as high. Despite repeated attempts by the government to kickstart the economy of the South, the money and talent in Italy typically flow north of Naples.

The roots of the Mezzogiorno problem go to a not totally surprising place: a lack of trust. Trust is also called social capital. And southern Italy has less social capital than the North. Part of this has to do with geography. Villages in southern Italy are more isolated and there is less interaction between them. Part of it has to do with systemic corruption and crime. Part of it has to do with something called Campanilismo — where Italian loyalties belong first to their family, second to their village or city, third to their immediate region and, lastly, to any notion of belonging to a nation. People from the South have trouble trusting anyone not from their inner circle.

For all these reasons, the co-ops that transformed the agricultural industry in the north of Italy never gained a foothold in the South. If you were to look for an example of how low trust can lead to negative outcomes for all, it would be hard to find a better one than southern Italy.

But what does this have to do with advertising? That begins to become clear when we look at the impact trust has on our brains.

Our Brains On Trust

Neuroeconomist Paul J. Zak has found that trust plays a key role in the functioning of our brains. When trust is present, our brain produces oxytocin, which Zak calls the trust molecule. It literally rewards our brain when we work together with others. It pushes us to cooperate rather than be focused exclusively on our own self-interest. This is exactly what was missing in southern Italy.

But there’s another side to this: the dark side of oxytocin. It can also cause us emotional pain in stressful social situations. And these episodes tend to get embedded in us as bad memories, leading to a triggering of fear or anxiety in the future.

We have to think more carefully about this question of trust. The whole goal of advertising is simply to get an impression to the right person. I suspect most marketers might define an unsuccessful ad as one that gets ignored. But the reality might be far worse. An ad that is shown in an untrusted channel might cause an emotional deficit, leading to the creation of future anxiety about or animosity towards a brand.

Once this happens, the game is over. You now have a Mezzogiorno of marketing.

The Ebbs and Flows of Consumerism in a Post-Pandemic World

As MediaPost’s Joe Mandese reported last Friday, advertising was, quite literally, almost decimated worldwide in 2020. If you look at the forecasts of the top agency holding companies, ad spends were trimmed by an average of 6.1%. It’s not quite one dollar in 10, but it’s close.

These same companies are forecasting a relative bounceback in 2021, starting slow and accelerating quarter by quarter through the year — but that still leaves the 2021 spend forecast back at 2018 levels.

And as we know, everything about 2021 is still very much in flux. If the year 2021 was a pack of cards, almost every one of them would be wild.

This — according to physician, epidemiologist and sociologist Nicholas Christakis — is not surprising.

Christakis is one of my favorite observers of network effects in society. His background in epidemiological science gives him a unique lens to look at how things spread through the networks of our world, real and virtual. It also makes him the perfect person to comment on what we might expect as we stagger out of our current crisis.

In his latest book, “Apollo’s Arrow,” he looks back to look forward to what we might expect — because, as he points out, we’ve been here before.

While the scope and impact of this one is unusual, such health crises are nothing new. Dozens of epidemics and a few pandemics have happened in my lifetime alone, according to this Wikipedia chart.

This post goes live on Groundhog Day, perhaps the most appropriate of all days for it to run. Today, however, we already know what the outcome will be. The groundhog will see its shadow and there will be six more months (at least) of pandemic to deal with. And we will spend that time living and reliving the same day in the same way with the same routine.

Christakis expects this phase to last through the rest of this year, until the vaccines are widely distributed, and we start to reach herd immunity.

During this time, we will still have to psychologically “hunker down” like the aforementioned groundhog, something we have been struggling with. “As a society we have been very immature,” said Christakis. “Immature, and typical as well, we could have done better.”

This phase will be marked by a general conservatism that will go in lockstep with fear and anxiety, a reluctance to spend and a trend toward risk aversion and religion.

Add to this the fact that we will still be dealing with widespread denialism and anger, which will lead to a worsening vicious circle of loss and crisis. The ideological cracks in our society have gone from annoying to deadly.

Advertising will have to somehow negotiate these choppy waters of increased rage and reduced consumerism.

Then, predicts Christakis, starting some time in 2022, we will enter an adjustment period where we will test and rethink the fundamental aspects of our lives. We will be learning to live with COVID-19, which will be less lethal but still very much present.

We will likely still wear masks and practice social distancing. Many of us will continue to work from home. Local flare-ups will still necessitate intermittent school and business closures. We will be reluctant to be inside with more than 20 or 30 people at a time. It’s unlikely that most of us will feel comfortable getting on a plane or embarking on a cruise ship. This period, according to Christakis, will last for a couple years.

Again, advertising will have to try to thread this psychological needle between fear and hope. It will be a fractured landscape on which to build a marketing strategy. Any pretense of marketing to the masses, a concept long in decline, will now be truly gone. The market will be rife with confusing signals and mixed motivations. It will be incumbent on advertisers to become very, very good at “reading the room.”

Finally, starting in 2024, we will have finally put the pandemic behind us. Now, says Christakis, four years of pent-up demand will suddenly burst through the dam of our delayed self-gratification. We will likely follow the same path taken a century ago, when we were coming out of a war and another pandemic, in the period we call the “Roaring Twenties.”

Christakis explained: “What typically happens is people get less religious. They will relentlessly seek out social interactions in nightclubs and restaurants and sporting events and political rallies. There’ll be some sexual licentiousness. People will start spending their money after having saved it. They’ll be joie de vivre and a kind of risk-taking, a kind of efflorescence of the arts, I think.”

Of course, this burst of buying will be built on the foundation of what came before. The world will likely be very different from its pre-pandemic version. It will be hard for marketers to project demand in a straight line from what they know, because the experiences they’ve been using as their baseline are no longer valid. Some things may remain the same, but some will be changed forever.

COVID-19 will have pried many of the gaps in our society further apart — most notably those of income inequality and ideological difference. A lingering sense of nationalism and protectionism born from dealing with a global emergency could still be in place.

Advertising has always played an interesting role in our lives. It both motivates and mirrors us.

But the reflection it shows is like a funhouse mirror: It distorts some aspects of our culture and ignores others. It creates demand and hides inconvenient truths. It professes to be noble, while it stokes the embers of our ignobility. It amplifies the duality of our human nature.

Interesting times lie ahead. It remains to be seen how that is reflected in the advertising we create and consume.

The Academics of Bullsh*t

“One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted.”—

from On Bullshit,” an essay by philosopher Henry Frankfurt.

Would it surprise you to know that I have found not one, but two academic studies on organizational bullshit? And I mean that non-euphemistically. The word “bullshit” is actually in the title of both studies. I B.S. you not.

In fact, organizational bullshit has become a legitimate field of study. Academics are being paid to dig into it — so to speak. There are likely bullshit grants, bullshit labs, bullshit theories, bullshit paradigms and bullshit courses. There are definitely bullshit professors.  There is even an OBPS — the Organization Bullshit Perception Scale — a way to academically measure bullshit in a company.

Many years ago, when I was in the twilight of my time with the search agency I had founded, I had had enough of the bullshit I was being buried under, shoveled there by the company that had acquired us. I was drowning in it. So I vented right here, on MediaPost. I dared you to imagine what it would be like to actually do business without bullshit getting in the way.

My words fell on deaf ears. Bullshit has proliferated since that time. It has been enshrined up and down our social, business and governmental hierarchies, becoming part of our “new” organizational normal. It has picked up new labels, like “fake news” and “alternate facts.” It has proven more dangerous than I could have ever imagined. And it is this dangerous because we are ignoring it, which is legitimizing it.

Henry Frankfurt defined the concept and set it apart from lying. Liars know the truth and are trying to hide it. Bullshitters don’t care if what they say is true or false. They only care if their listener is persuaded. That’s as good a working definition of the last four years as any I’ve heard.

But at least one study indicates bullshit may have a social modality — acceptable in some contexts, but corrosive in others. Marketing, for example, is highlighted by the authors as an industry built on a foundation of bullshit:

“advertising and public relations agencies and consultants are likely to be ‘full of It,’ and in some cases even make the production of bullshit an important pillar of their business.”

In these studies, researchers speculate that bullshit might actually serve a purpose in organizations. It may allow for strategic motivation before there is an actual strategy in place. This brand of bullshit is otherwise known as “blue-sky thinking” or “out-of-the-box thinking.”

But if this is true, there is a very narrow window indeed where this type of bullshit could be considered beneficial. The minute there are facts to deal with, they should be dealt with. But the problem is that the facts never quite measure up to the vision of the bullshit. Once you open the door to allowing bullshit, it becomes self-perpetuating.

I grew up in the country. I know how hard it is to get rid of bullshit.

The previous example is what I would call strategic bullshit — a way to “grease the wheels” and get the corporate machine moving. But it often leads directly to operational bullshit — which is toxic to an organization, serving to “gum up the gears” and prevent anything real and meaningful from happening. This was the type of bullshit that was burying me back in 2013 when I wrote that first column. It’s also the type of bullshit that is paralyzing us today.

According to the academic research into bullshit, when we’re faced with it, we have four ways to respond: exit, voice, loyalty or neglect. Exit means we try to escape from the bullshit. Loyalty means we wallow in it, spreading it wider and thicker. Neglect means we just ignore it. And Voice means we stand up to the bullshit and confront it.  I’m guessing you’ve already found yourself in one of those four categories.

Here’s the thing. As marketers and communicators, we have to face the cold, ugly truth of our ongoing relationship with bullshit. We all have to deal with it. It’s the nature of our industry.

But how do we deal with it? Most times, in most situations, it’s just easier to escape or ignore it. Sometimes it may serve our purpose to jump on the bullshit bandwagon and spread it. But given the overwhelming evidence of where bullshit has led us in the recent past, we all should be finding our voice to call bullshit on bullshit.

Dear US: Start Thinking Differently about Public Broadcasting

In my ongoing discussion about how to support true and reliable journalism, there is one option I haven’t talked about: public broadcasting. 

In a previous column, I talked about the difference I saw on one day in the way the news was reported in Canada vs the U.S. Largely missing in Canada was the extreme polarization I saw in editorial tone in the U.S. 

And, as I mentioned in my previous two columns — one on why free news is bad news and one on the problems with “news” analysis — the divide between news on the right and news on the left has the same root cause: the need for profitability.

The one thing I didn’t talk about in that U.S. versus Canada column is that we have a robust public broadcaster in the Canadian Broadcasting Corporation (CBC). 

“Ah,” you say, “We have public broadcasting, too. We have PBS and NPR.” 

Well, yes, but no. There are important differences in how these institutions are funded.

Let’s take PBS, for example. PBS stations are independently operated, and each have their own financials. They are members of PBS, which is not a network but rather a programming partner. Affiliates pay member dues to belong to PBS.

For example, the Seattle PBS affiliate is KCTS, whose 2019 financials show that the lion’s share of its income, over half, comes from individual donations. Corporate donations represent another 16.5%. Just 9% of its funding comes from the Corporation of Public Broadcasting (CPB), supposedly representing U.S. taxpayers’ support of public broadcasting on PBS and NPR.

CPB has been a punching bag for Republicans for years now. What meager support public broadcasting does receive from CPB is constantly at risk of being chopped by Congress.  Most recently — and not surprisingly — Trump threatened to cut funding for CPB from its current level of $445 million to just $30 million. 

He did this after an NPR reporter asked Secretary of State Mike Pompeo if he owed an apology to the former U.S. Ambassador to Ukraine. Conservative radio jumped on the altercation, with one station tweeting, “Why does NPR still exist? We have thousands of radio stations in the U.S. plus satellite radio. Podcasts. Why are we paying for this big-government, Democrat Party propaganda operation.”

Trump retweeted, “A very good question.”

It actually is a good question, but from a very different perspective than what Trump intended. 

I am Canadian. I come from a social democratic country. I am free of the knee-jerk reactionism of many Americans (as shown in last week’s election) toward the word “socialism.” You have to start with that idea to understand our approach to broadcasting.

While the CBC does sell advertising, it’s not dependent on it. In its last financial report, just 14.5% of all CBC revenues came from advertising. Sixty-five percent of the CBC’s funds come directly from taxpayer dollars. As a comparison, the amount of money CBC received from the government last year was 1.1 billion, almost three times the total budget of the Corporation of Public Broadcasting in the U.S. 

That highlights the difference in attitude about the importance of public broadcasting in our two countries. In Canada — following the model of Britain and the BBC — we have enshrined public broadcasting as an important part of our society that we directly support through our taxes. Not only do we have the CBC across Canada, but each province also has its own public broadcaster. 

In the more capitalistic and laissez-faire U.S., public broadcasting largely depends on the kindness of strangers. What little taxpayer support it does receive is constantly being used as a pawn in political posturing between the right and left. 

So, who’s right?

I’ll be honest. There are many Canadians — not a majority, but a significant percentage — who would like to see Canada pursue a more American path when it comes to broadcasting. “Who needs the CBC?” they say. 

But I believe strongly that the relative health of Canadian journalism when compared to the U.S. is largely due to our investment in public broadcasting. The CBC sets the norm of what’s acceptable in Canada. Its biggest private competitors, CTV and Global, don’t stray far from the relatively neutral, reliable and objective tone set by the CBC. 

If we look at reliability when it comes to public broadcasters in the U.S., we see that both NPR and PBS score top marks when it comes to lack of bias and reliability on the Ad Fontes Media Bias Chart.

Unfortunately, Canadian broadcasters are not represented on the chart, so we’ll have to look for another measure. Luckily, one exists. More on this in a bit.

The doubters of my proposed hypothesis that taxpayer-funded public broadcasting means better journalism will be quick to point out that Russia, China, Cuba — heck, even Iran — all have state-owned broadcasters. These are all — as the conservative radio tweeter above said — simply “propaganda machines.” How is this different from public broadcasting?

Again, we have the conflation of democratic socialism with the U.S. right’s favorite bogeyman: communism. Y’all really have to stop doing that. 

Public broadcasting in places like Canada, Australia, New Zealand, Norway, Finland, Denmark and Sweden are all modeled after the originator of the concept: Britain and the BBC. Although there have been many British prime ministers — Winston Churchill included — who sought to co-opt the BBC for their government’s purposes, over the past century a legislative firewall has been built to maintain the public broadcaster’s independence from the government of the day. Similar legislation is in place in Canada and other democracies with strong public broadcasters. 

So, how is that working?

Pretty well, according to Reporters Without Borders, the “biggest NGO specializing in the defense of media freedom.”

The organization’s World Press Freedom Index ranks media freedom in every country in the world. The top five countries (all Nordic and northern European countries — and all social democracies) have strong public broadcasters. In case you’re wondering, Canada scores 16th on the list. The U.S. scores 45th out of 180 countries. 

Public broadcasting — real public broadcasting, with taxpayers’ skin in the game — seems to be working pretty damned well in Canada and other places in the world. (As an interesting side note, the Reporters without Borders ranking of countries bears more than a little resemblance to US News’ Quality of Life Index). 

You should think differently about public broadcasting, because the biggest problem facing journalism in the U.S. isn’t socialism or government propaganda. It’s capitalism. 

Analyzing the Problem with News “Analysis”

Last week, I talked about the Free News problem. In thinking about how to follow that up, I ran across an interesting study that was published earlier this year in the Science Advances Journal. One of the authors was Duncan Watts, who I’ve mentioned repeatedly in previous columns.

In the study, the research team tackled the problem of “Fake News” which is – of course – another symptom of the creeping malaise that is striking the industry of journalism. It certainly has become a buzzword in the last few years. But the team found that the problem of fake news may not be a problem at all. It makes up just 0.15% of our entire daily media diet. In fact, across all ages in the study, any type of news is – at the most – just 14.2% of our total media consumption.

The problem may be our overuse of the term “news” – applying it to things we think are news but are actually just content meant to drive advertising revenues. In most cases, this is opinion (sometimes informed but often not) masquerading as news in order to generate a lot of monetizable content. Once again, to get to the root of the problem, we have to follow the money.

If we look again at the Ad Fontes Media Bias chart, it’s not “news” that’s the problem. Most acknowledged leaders in true journalism are tightly clustered in the upper middle of the chart, which is where we want our news sources to be. They’re reliable and unbiased.

If we follow the two legs of the chart down to the right or left into the unreliable territory where we might encounter “fake” news, we find from the study mentioned above that this makes up an infinitesimal percentage of the media most of us actually pay attention to. The problem here can be found in the middle regions of the chart. This is where we find something called analysis. And that might just be our problem.

Again, we have to look at the creeping poison of incentive here. Some past students from Stanford University have an interesting essay about the economics of journalism that shows how cable tv and online have disrupted the tenuous value chain of news reporting.

The profitability of hard reporting was defined in the golden age of print journalism – specifically newspapers. The problem with reporting as a product is twofold. One is that news in non-excludable. Once news is reported anyone can use it. And two is that while reporting is expensive, the cost of distribution is independent of the cost of reporting. The cost of getting the news out is the same, regardless of how much news is produced.

While newspapers were the primary source of news, these two factors could be worked around. Newspapers came with a built-in 24-hour time lag. If you could get a one day jump on the competition, you could be very profitable indeed.

Secondly, the fixed distribution costs made newspapers a very cost-effective ad delivery vehicle. It cost the newspapers next to nothing to add advertising to the paper, thereby boosting revenues.

But these two factors were turned around by Internet and Cable News. If a newspaper bore the bulk of the costs by breaking a story, Cable TV and the Internet could immediately jump on board and rake in the benefits of using content they didn’t have to pay for.

And that brings us to the question of news “analysis”. Business models that rely on advertising need eyeballs. And those eyeballs need content. Original content – in the form of real reporting – is expensive and eats into profit. But analysis of news that comes from other sources costs almost nothing. You load up on talking heads and have them talk endlessly about the latest story. You can spin off never ending reams of content without having to invest anything in actually breaking the story.

This type of content has another benefit; customers love analysis. Real news can be tough to swallow. If done correctly, it should be objective and based on fact.  Sometimes it will force us to reconsider our beliefs. As is often the case with news, we may not like what we hear.

Analysis – or opinion – is much more palatable. It can be either partially or completely set free from facts and swayed and colored to match the audience’s beliefs and biases. It scores highly on the confirmation bias scale. It hits all the right (or left) emotional buttons. And by doing this, it stands a better chance of being shared on social media feeds. Eyeballs beget eyeballs. The gods of corporate finance smile benignly on analysis content because of its effectiveness at boosting profitability.

By understanding how the value chain of good reporting has broken down due to this parasitic piling on by online and cable platforms in the pursuit of profit, we begin to understand how we can perhaps save journalism. There is simply too much analytical superstructure built on top of the few real journalists that are doing real reporting. And the business model that once supported that reporting is gone.

The further that analysis gets away from the facts that fuel it, the more dangerous it becomes. At some point it crosses the lines from analysis to opinion to propaganda. The one thing it’s not is “news.” We need to financially support through subscription the few that are still reporting on the things that are actually happening.

Why Free News is (usually) Bad News

Pretty much everything about the next week will be unpredictable. But whatever happens on Nov. 3, I’m sure there will be much teeth-gnashing and navel-gazing about the state of journalism in the election aftermath.

And there should be. I have written much about the deplorable state of that particular industry. Many, many things need to be fixed. 

For example, let’s talk about the extreme polarization of both the U.S. population and their favored news sources. Last year about this time, the PEW Research Center released a study showing that over 30% of Americans distrust their news sources. 

But what’s more alarming is, when we break this down by Republicans versus Democrats, only 27% of Democrats didn’t trust the news for information about politics or elections. With Republicans, that climbed to a whopping 67%. 

The one news source Republicans do trust? Fox News. Sixty-five percent of them say Fox is reliable. 

And that’s a problem.

Earlier this year, Ad Fontes Media came out with its Media Bias Chart. It charts major news and media channels on two axes: source reliability and political bias. The correlation between bias and reliability is almost perfect. The further a news source is out to the right or left, the less reliable it is.

How does Fox fare? Not well. Ad Fontes separates Fox TV from Fox Online. Fox Online lies on the border between being “reliable for news, but high in analysis/opinion content” and “some reliability issues and/or extremism.” Fox TV falls squarely in the second category.

I’ve written before that media bias is not just a right-wing problem. Outlets like CNN and MSNBC show a significant left-leaning bias. But CNN Online, despite its bias, still falls within the “Most Reliable for News” category. According to Ad Fontes, MSNBC has the same reliability issues as Fox.

The question that has to be asked is “How did we get here?”  And that’s the question tackled head-on in a new book, “Free is Bad,” by John Marshall.

I’ve known Marshall for ages. He has covered a lot of the things I’ve been writing about in this column. 

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” 

Upton Sinclair

The problem here is one of incentive. Our respective media heads didn’t wake up one morning and say, “You know what we need to be? A lot more biased!” They have walked down that path step by step, driven by the need to find a revenue model that meets their need for profitability. 

When we talk about our news channels, the obvious choice to be profitable is to be supported by ads. And to be supported by ads, you have to be able to target those ads. One of the most effective targeting strategies is to target by political belief, because it comes reliably bundled with a bunch of other beliefs that makes it very easy to predict behaviors. And that makes these ads highly effective in converting prospects.

This is how we got to where we are. But there are all types of ways to prop up your profit through selling ads. Some are pretty open and transparent. Some are less so. And that brings us to a particularly interesting section of Marshall’s book. 

John Marshall is a quant geek at heart. He has been a serial tech entrepreneur — and, in one of those ventures, built a very popular web analytics platform. He also has intimate knowledge of how the sausages are made in the ad-tech business. He knows sketchy advertising practices when he sees them. 

Given all of this, Marshall was able to undertake a fascinating analysis of the ads we see on various news platforms that dovetails nicely with the Ad Fontes chart. 

Marshall created the Ad Shenanigans chart. Basically, he did a forensic analysis of the advertising approaches of various online news platforms. He was looking for those that gathered data about their users, sold traffic to multiple networks, featured clickbait chumboxes and other unsavory practices. Then he ranked them accordingly.

Not surprisingly, there’s a pretty strong correlation between reputable reporting and business ethics. Highly biased and less reputable sites on the Ad Fontes Bias Chart (Breitbart, NewsMax, and Fox News) all can also be found near the top of Marshall’s Ad Shenanigans Chart. Those that do seem to have some ethics when it comes to the types of ads they run also seem to take objective journalism seriously. Case in point, The Guardian in the UK and ProPublica in the U.S.

The one anomaly in the group seems to be CNN. While it does fare relatively well on reputable reporting according to Ad Fontes, CNN appears to be willing to do just about anything to turn a buck. It ranks just a few slots below Fox in terms of “ad shenanigans.”

Marshall also breaks out those platforms that have a mix of paid firewalls and advertising. While there are some culprits in the mix such as the Daily Caller, Slate and the National Review, most sites that have some sort of subscription model seem to be far less likely to fling the gates of their walled gardens open to the ethically challenged advertising hordes. 

All of this drives home Marshall’s message: When it comes to the quality of your news sources, free is bad. As soon as something costs you nothing, you are no longer the customer. You’re the product. Invisible hand market forces are no longer working for you. They are working for the advertiser. And that means they’re working against you if you’re looking for an unbiased, quality news source.

Amazon Prime: Buy Today, Pay Tomorrow?

This column goes live on the most eagerly anticipated day of the year. My neighbor, who has a never-ending parade of delivery vans stopping in front of her door, has it circled on her calendar. At least one of my daughters has been planning for it for several months. Even I, who tends to take a curmudgeonly view of many celebrations, has a soft spot in my heart for this particular one.

No, it’s not the day after Canadian Thanksgiving. This, my friends, is Amazon Prime Day!

Today, in our COVID-clouded reality, the day will likely hit a new peak of “Prime-ness.” Housebound and tired of being bludgeoned to death by WTF news headlines, we will undoubtedly treat ourselves with an unprecedented orgy of one-click shopping. And who can blame us? We can’t go to Disneyland, so leave me alone and let me order that smart home toilet plunger and the matching set of Fawlty Towers tea towels that I’ve been eyeing. 

Of course, me being me, I do think about the consequences of Amazon’s rise to retail dominance. 

I think we’re at a watershed moment in our retail behaviors, and this moment has been driven forward precipitously by the current pandemic. Being locked down has forced many of us to make Amazon our default destination for buying. Speaking solely as a sample of one, I know check Amazon first and then use that as my baseline for comparison shopping. But I do so for purely selfish reasons – buying stuff on Amazon is as convenient as hell!

I don’t think I’m alone. We do seem to love us some Amazon. In a 2018 survey conducted by Recode, respondents said that Amazon had the most positive impact on society out of any major tech company. And that was pre-Pandemic. I suspect this halo effect has only increased since Amazon has become the consumer lifeline for a world forced to stay at home.

As I give into to the siren call of Bezos and Co., I wonder what forces I might be unleashing. What unintended consequences might come home to roost in years hence? Here are a few possibilities. 

The Corporate Conundrum

First of all, let’s not kid ourselves. Amazon is a for-profit corporation. It has shareholders that demand results. The biggest of those shareholders is Jeff Bezos, who is the world’s richest man. 

But amazingly, not all of Amazon’s shareholders are focused on the quarterly financials. Many of them – with an eye to the long game – are demanding that Amazon adopt a more ethical balance sheet.  At the 2019 Annual Shareholder Meeting, a list of 12 resolutions were brought forward to be voted on. The recommendations included zero tolerance for sexual harassment and hate speech, curbing Amazon’s facial recognition technology, addressing climate change and Amazon’s own environmental impact. These last two were supported by a letter signed by 7600 of Amazon’s own employees. 

The result? Amazon strenuously fought every one of them and none were adopted. So, before we get all warm and gooey about how wonderful Amazon is, let’s remember that the people running the joint have made it very clear that they will absolutely put profit before ethics. 

A Dagger in the Heart of Our Communities

For hundreds of years, we have been building a supply chain that was bound by the realities of geography. That supply chain required some type of physical presence within a stone’s throw of where we live. Amazon has broken that chain and we are beginning to feel the impact of that. 

Community shopping districts around the world were being gutted by the “Amazon Effect” even before COVID. In the last 6 months, that dangerous trend has accelerated exponentially. In a commentary from CNBC in 2018, venture capitalist Alan Patricof worried about the social impact of losing our community gathering spots, “This decline has brought a deterioration in places where people congregated, socialized, made friends and were greeted by a friendly face offering an intangible element of belonging to a community.”

The social glue that held us together has been dissolving over the past two decades. Whether you’re a fan of shopping malls or not (I fall into the “not” category) they were at least a common space where you might run into your neighbor. In his book Bowling Alone, from 2000, Harvard political scientist Robert Putnam documented the erosion of social capital in America. We are now 20 years hence and Putnam’s worst case scenario seems quaintly optimistic now. With the loss of our common ground – in the most literal sense – we increasingly retreat to the echo chambers of social media. 

Frictionless Consumerism

This last point is perhaps the most worrying. Amazon has made it stupid simple to buy stuff. They have relentlessly squeezed every last bit of friction out of the path to purchase. That worries me greatly.

If we could rely on a rational marketplace filled with buyers acting in the best homo economicus tradition, then I perhaps rest easier, knowing that there was some type of intelligence driving Adam Smith’s Invisible Hand. But experience has shown that is not the case. Rampant consumerism appears to be one of the three horsemen of the modern apocalypse. And, if this is true, then Amazon has put us squarely in their path. 

This is not to even mention things like Amazon’s emerging monopoly-like dominance in a formerly competitive marketplace, the relentless downward pressure it exerts on wages within its supply chain, the evaporation of jobs outside its supply chain or the privacy considerations of Alexa. 

Still, enjoy your Amazon Prime Day. I’m sure everything will be fine.

Do We Still Need Cities?

In 2011, Harvard economist Edward Glaeser called the city “man’s greatest invention” in his book “Triumph of the City,” noting that “there is a near-perfect correlation between urbanization and prosperity across nations.”

Why is this so? It’s because historically we needed a critical mass of connection in order to accelerate human achievement.  Cities bring large numbers of people into closer, more frequent and productive contact than other places.  This direct, face-to-face contact is critical for facilitating the exchange of knowledge and ideas that lead to the next new venture business, medical discovery or social innovation.

This has been true throughout our history. While cities can be messy and crowded, they also spin off an amazing amount of ingenuity and creativity, driving us all forward.

But the very same things that make cities hot beds of productive activity also make them a human petri dish in the midst of a pandemic.

Example: New York

If the advantages that Glaeser lists are true for cities in general, it’s doubly true for New York, which just might be the greatest city in the world. Manhattan’s population density is 66,940 people per square mile, which makes it the highest of any area in the U.S. It’s also diverse, with 36% of population foreign-born. It attracts talent in all types of fields from around the world.

Unfortunately, all these things also set New York up to be particularly hard hit by COVID-19. To date, according to Google’s tracker, it has 236,000 confirmed cases of COVID-19 and a mortality rate of 10%. That case rate would put it ahead of all but 18 countries in the world. What has made New York great has also made it tragically vulnerable to a pandemic.

New York is famous for its gritty resilience. But at least one New Yorker thinks this might be the last straw for the Big Apple. In an essay entitled “New York City is dead forever,” self-published and then reprinted by the New York Post, comedy club owner James Altucher talks about how everyone he knows is high-tailing it out of town for safer, less crowded destinations, leaving a ghost town in their wake.

He doesn’t believe they’re coming back. The connections that once relied on physical proximity can now be replicated by technology. Not perfectly, perhaps, but well enough. Certainly, well enough to tip the balance away from the compromises you have to be prepared to swallow to live in a city like New York: higher costs of living, exorbitant real estate, higher crime rates and the other grittier, less-glittery sides of living in a crowded, dense metropolis.


Example: Silicon Valley

So, perhaps tech is partly (or largely) to blame for the disruption to the interconnectedness of cities. But, ironically, thanks to COVID-19, the same thing is happening to the birthplace of tech, Silicon Valley and the Bay area of Northern California.

Barb is a friend of mine who was born in Canada but has lived much of her life in Palo Alto, California — a stone’s throw from the campus of Stanford University. She recently beat a temporary retreat back to her home and native land north of the 49th Parallel.  When Barb explained to her Palo Alto friends and neighbors why Canada seemed to be a safer place right now, she explained it like this,

“My county — Santa Clara — with a population of less than 2 million people, has had almost as many COVID cases in the last three weeks as the entire country of Canada.”

She’s been spending her time visiting her Canadian-based son and exploring the natural nooks and crannies of British Columbia while doing some birdwatching along the way.  COVID-19 is just one of the factors that has caused her to start seriously thinking about life choices she couldn’t have imagined just a few short years ago. As Barb said to me as we chatted, “I have a flight home booked — but as it gets closer to that date, it’s becoming harder and harder to think about going back.”  

These are just two examples of the reordering of what will become the new normal. Many of us have retreated in search of a little social distance from what our lives were. Increasingly, we are relying on tech to bridge the distances that we are imposing between ourselves and others. Breathing room — in its most literal sense — has become our most immediate priority.

This won’t change anytime soon. We can expect this move to continue for at least the next year. It could be — and I suspect it will be — much longer. Perhaps James Altucher is right. Could this pandemic – aided and abetted by tech – finally be what kills mankind’s greatest invention? As he writes in his essay,

“Everyone has choices now. You can live in the music capital of Nashville, you can live in the ‘next Silicon Valley’ of Austin. You can live in your hometown in the middle of wherever. And you can be just as productive, make the same salary, have higher quality of life with a cheaper cost.”

If Altucher is right, there’s another thing we need to think about. According to Glaeser, cities are not only great for driving forward innovation. They also put some much-needed distance between us and nature:

“We human are a destructive species. We tend to destroy stuff when we’re around it. And if you love nature, stay away from it.”

As we look to escape one crisis, we might be diving headlong into the next.

What Would Aaron Do?

I am a big Aaron Sorkin fan. And before you rain on my parade, I say that fully understanding that he epitomizes the liberal intellectual elitist, sanctimonious cabal that has helped cleave American culture in two. I get that. And I don’t care.

I get that his message is from the left side of the ideological divide. I get that he is preaching to the choir. And I get that I am part of the choir. Still, given the times, I felt that a little Sorkin sermon was just what I needed. So I started rewatching Sorkin’s HBO series “The Newsroom.”

If you aren’t part of this particular choir, let me bring you up to speed. The Newsroom in this case is at the fictional cable network ACN. One of the primary characters is lead anchor Will McEvoy (played by Jeff Daniels), who has built his audience by being noncontroversial and affable — the Jay Leno of journalism. 

This brings us to the entrance of the second main character: Mackenzie McHale, played by Emily Mortimer. Exhausted from years as an embedded journalist covering multiple conflicts in Afghanistan, Pakistan and Iraq, she comes on board as McEvoy’s new executive producer (and also happens to be his ex-girlfriend). 

In typical Sorkin fashion, she goads everyone to do better. She wants to reimagine the news by “reclaiming journalism as an honorable profession,” with “civility, respect, and a return to what’s important; the death of bitchiness; the death of gossip and voyeurism; speaking truth to stupid.”

I made it to episode 3 before becoming profoundly sad and world-weary. Sorkin’s sermon from 2012—– just eight years ago —  did not age well. It certainly didn’t foreshadow what was to come. 

Instead of trying to be better, the news business — especially cable news — has gone in exactly the opposite direction, heading straight for Aaron Sorkin’s worst-case scenario. This scenario formed part of a Will McEvoy speech in that third episode: “I’m a leader in an industry that miscalled election results, hyped up terror scares, ginned up controversy, and failed to report on tectonic shifts in our country — from the collapse of the financial system to the truths about how strong we are to the dangers we actually face.”

That pretty much sums up where we are. But even Sorkin couldn’t anticipate what horrors social media would throw into the mix. The reality is actually worse than his worst-case scenario. 

Sorkin’s appeal for me was that he always showed what “better” could be. That was certainly true in his breakthrough political hit “The West Wing.” 

He brought the same message to the jaded world of journalism in “The Newsroom. He was saying, “Yes, we are flawed people working in a flawed system set in a flawed nation. But it can be better….Our future is in our hands. And whatever that future may be, we will be held accountable for it when it happens.”

This message is not new. It was the blood and bones of Abraham Lincoln’s annual address to Congress on December 1, 1862, just one month before the Emancipation Proclamation was signed into law. Lincoln was preparing the nation for the choice of a path which may have been unprecedented and unimaginably difficult, but would ultimately be proven to be the more moral one: “It is not ‘can any of us imagine better?’ but, ‘can we all do better?’ The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise — with the occasion.”

“The Newsroom” was Sorkin’s last involvement with a continuing TV series. He was working on his directorial movie debut, “Molly’s World,” when Trump got elected. 

Since then, he has adapted Harper Lee’s “To Kill a Mockingbird” for Broadway, with “The Newsroom’”s Jeff Daniels as Atticus Finch. 

Sorkin being Sorkin, he ran into a legal dispute with Lee’s estate when he updated the source material to be a little more open about the racial tension that underlies the story. Aaron Sorkin is not one to let sleeping dogmas lie. 

Aaron Sorkin also wrote a letter to his daughter and wife on the day after the 2016 election, a letter than perhaps says it all. 

It began, “Well the world changed late last night in a way I couldn’t protect us from.”

He was saying that as a husband and father. But I think it was a message for us all — a message of frustration and sadness. He closed the letter by saying “I will not hand [my daughter] a country shaped by hateful and stupid men. Your tears last night woke me up, and I’ll never go to sleep on you again.”

Yes, Sorkin was preaching when he was scripting “The Newsroom.” But he was right. We should do better. 

In that spirit, I’ll continue to dissect the Reuters study on the current state of journalism I mentioned last week. And I’ll do this because I think we have to hold our information sources to “doing better.” We have to do a better job of supporting those journalists that are doing better. We have to be willing to reject the “dogmas of the quiet past.” 

One of those dogmas is news supported by advertising. The two are mutually incompatible. Ad-supported journalism is a popularity contest, with the end product a huge audience custom sliced, diced and delivered to advertisers — instead of a well-informed populace.

We have to do better than that.