An economics prize tells us something very worrying about the news business, and ourselves

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john-bates-clark-awardThey’ve just handed out this year’s John Bates Clark Gold Medal over at the American Economics Association. The research for which its been given should be of great interest to everyone worried about the media and journalism.

The JCB is actually harder to win than the Nobel, given that there’s only one each year (it’s never been awarded to multiple holders, unlike the Nobel which can have three) and it’s also only for American economists under 40. The interest in this year’s comes from the fact that it has been awarded largely for research into the media itself.

Most importantly for us, the finding that the media chases the preconceptions and prejudices of the audience, not shapes them. Here’s the AEA report on it:

A first set of Gentzkow’s papers studies political bias in the news media. In “What Drives Media Slant? Evidence from U.S. Daily Newspapers” (Econometrica, 2010), Gentzkow and co-author Jesse Shapiro use textual analysis of a large set of newspaper articles to classify content as more Republican or more Democrat (“media slant”). This is done using statistical analysis of phrases that differentially show up in Republican versus Democrat Senators’ speeches in the Senate. These constructed measures of media slant match well with conventional wisdom and with other, more ad-hoc and subjective newspaper political classification. Gentzkow and Shapiro then use these measures to estimate demand for newspapers, and to model the newspaper owner’s choice of media slant. They find that most of a newspaper’s media slant can be explained by the preferences of its readers rather than by the tastes of its owner. The second part of the paper tries to sort out whether the bias of individual papers is driven by “demand” – i.e. the political biases of their target audience – or “supply”, i.e. the idiosyncratic preferences of the owners. They find that it is mostly demand.

That is rather something that gets us media types excited. You know, the what if the billionaires buy up all the newspapers worries. And the answer is that if those billionaires want to stay in business then they’ll not be able to use the newspapers to propagandise in favour of leaving billionaires alone. That’s simply not how we consumers choose what we’re going to consume. Rather, we have certain ideas about how the world works and we like our media consumption to bolster those views rather than anything so boring as trying to educate us out of them.

This also has interesting implications for our observations of the wider society. For example, there’s a very small press that caters to those demanding the immediate overthrow of capitalism. And the corollary of this being a very small press is that there’s very few Americans who actually want to read this stuff: leading to the thought that there’s very few who share this worldview. Something we can all be grateful for. Sadly, the other side of this is that the success of Fox News and the like shows us not that Murdoch is brainwashing the masses but that a startlingly large number of Americans share those prejudices and wish to have them reconfirmed on a daily basis. That’s a less comforting thought.

Things are different for people in verticals like us here at Pando: we’re not trying to push any particular political line, however much individual writers might have views on the subject. But out there in the general news business we don’t have to worry about the media persuading people into policies favoured by the media moguls. Quite the other way around, said moguls are spending their time trying to work out the prejudices of the consumers so that they can pander to them.

Which leaves one final chilling thought. The existence of successful shows like Max Keiser or Alex Jones tells us something we might not be too keen on about our fellow citizens.

[illustration by Brad Jonas for Pando]

PandoDaily

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Why the little guy won marketing’s biggest prize

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esurance

By Eric Tung, {grow} Community Member

Here in America, we just concluded our biggest marketing sweepstakes, The Super Bowl, where top brands march out their glitziest and most creative advertising. All the big players showed up but it might have been a surprise campaign that created the biggest buzz of all. In fact, they didn’t even take out an ad during the big game.

Many people believe a creative ploy from Esurance created the biggest buzz. The company’s voiceover star, John Krasinski, of “The Office” fame, comes out in front of the camera to chat about the company:

If you can’t see the video, here is the link.

Here’s why Esurance won the Super Bowl:

1. Real-Time Marketing Win

Drawing a record 111.5 million viewers (Nielsen), and an average $ 4 million price tag for a 30-second spot, the Super Bowl is the biggest media stage you can compete on. If you’re going to be able to make a sizable splash, you either need an amazing commercial, or some great real-time newsjacking like Oreo in 2013. Esurance combined the two with a quirky, witty ad and helped steer the Super Bowl conversation towards insurance with a $ 1.5 million giveaway, probably the largest social media giveaway prize I’ve ever seen.

2. Messaging Win

As stated in the ad, Esurance can save customers around 30% – about the same amount the company saved by airing their commercial in the first slot after the Super Bowl. Not only did the company save 30% themselves, but they’re giving the savings back to a lucky winner. Plus, they further extend that messaging over to the hashtag, #EsuranceSave30. Brilliant combination of real-time marketing with the conversation around the price of Super Bowl ads and the savings message they want to drive home.

3. Target Market Win

The contest is a Twitter-based hashtag contest, one entry per hashtag use. This perfectly aligns with their assumed target market: younger drivers more likely to buy a web-based insurance product, and with mobile users who are more likely to both be using Twitter and buying insurance online. You can’t pick a target more appropriate for the company.

4. Trending Hashtag Win

In 2013, Twitter raised the price of a Promoted Trend to $ 200k per day. If we assume some amount of premium tied to sponsoring the Promoted Trend during the Super Bowl, even 10x regular pricing ($ 4 million for Super Bowl TV spot / $ 100k average for regular national TV spots = 40x premium for TV), that gives us around a $ 2 million possible figure for a Promoted Trend during the Super Bowl. Esurance held the top 1-2 organically trending hashtag positions for 36 hours after the game, resulting in $ 2-3 million “worth” of Promoted Trend time.

5. Followers Win
Taking a look at Twitterfeed.com, we can see that Esurance’s Twitter account started out the week at a modest 9,844 followers, about 25% of parent-company Allstate at 42,373. By the end of the week, Esurance’s following had increased 2736%, picking up over 250k new followers, with a total following of more than 625% of Allstate’s. Assuming normal promoted accounts on Twitter accruing followers at about $ 10 a follow during peak bidding times, that amounts to about $ 2.6 million figure for the new followers obtained.

esurance

Will Super Bowl ads always provide ROI and concrete results? No.

Their intended purpose has always been brand awareness and word-of mouth. Esurance achieved this by giving away one of the biggest social media prizes I’ve ever seen during a time when people are already talking about the high price of advertising in the medium, targeting a relevant audience and driving home their savings message. ROI in the form of organically obtaining a trending hashtag and a quarter-million followers is just an added bonus.

By the way, here’s a video of Esurance giving away the $ 1.5 million dollars!

I’d love to hear your comments about this integrated campaign in the comment section below!

eric t tungEric T. Tung is a social media manager and trainer at BMC Software as well as a social media strategist, blogger and speaker. The postings in this blog belong to Eric and do not necessarily represent the opinions or positions of BMC Software.

 

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