< Back to Lineup Newsroom

    Is Bad News Still Good for Business?

    Ali Gordon | Industry Analysis | 18th May 2021
    Is Bad News Still Good for Business?

    Almost 90% of Americans now obtain their news on digital devices, and one in five find their political news mainly on social media. A 2020 study by Dr. Tyler J. VanderWeele of Harvard T.H. Chan School of Public Health explains that negative news reporting increased significantly between 1979 and 2010. VanderWeele says:

    “The negative content of news reporting is likely in part motivated by the fact that the human mind is more likely to be attracted to, carefully watch, and become fixated upon something that is negative than something that is positive. This phenomenon, sometimes referred to as “negativity bias” may be an adaptive response, to ensure survival, since negative events of course have the greater likelihood of causing harm. However, the implications of this for news reporting are that news sources that provide negative reporting will generally thus end up with more viewers. There is thus strong incentive, for media success, to report negative news.”

    Co-host of Exponent and writer for Harvard Business Review, James Allworth also argues that emotions traditionally perceived as negative--specifically anger--have driven this news consumption phenomenon on platforms like Facebook. He says this is because the platform is explicitly modeled to monetize attention. Emotions like anger, panic, humiliation, fear, or shame drive more attention, and news content that evokes these most strongly have benefited financially. 

    However, as the attention-based economy buttressing the financial relationship between tech platforms, news publishers, and digital advertisers shifts, the attention-based value of bad news is changing too. Entrepreneur and lawyer, Chidike Samuelson writes, “The effects of sensation-driven marketing are often observed in the long-term; reduced customer engagement and patronage are the clearest signs of a dwindling loyalty level.” This raises the question whether bad news is still good for business.

    Bad News and the Shift Away from an Attention-Based Economy

    News content related to racial justice and the murder of George Floyd performed financially at nearly 60% lower rates than other content in summer 2020. Senior Vice President of Global News and Special Projects at VICE Media Group Marsha Cooke explained this was because brands and advertising agencies used keyword blocking to prevent ad placements near that content. This kind of experience could signal to publishers that perceived negative content is damaging to profits, but the situation is actually more complex. 

    In part, it represents a fundamental misunderstanding by brands and advertisers about the economic, tech, and legal shifts currently taking place. Cooke calls that kind of reliance on keyword blocking ‘antiquated’ and suggests it is damaging to the public service objectives of journalism. Venture capitalist Clara Lindh Bergendorff explains the shift is also changing financial incentives:

    “In the 2000s, as the amount of information exploded, our attention became more scarce and valuable and many digital products and services were made free in exchange for selling our attention and personal information to advertisers...In the early days of social media and the Attention Economy, the creators needed the platforms’ audience. As (1) the creators and their leverage increased, (2) the barriers to micro-entrepreneurship decreased, and (3) people with niche interests around the globe were able to discover like-minded to convene against the so-called mainstream, there was a subtle but acute power shift and the platforms now need the creators’ loyal communities. The Attention Economy monetizes an audience they speak at while the Creator Economy turns that audience into a real asset: a community they engage with.”

    In the creation-based economy, publishers tend to be either creators engaging with reader communities or the brokers holding trusted relationships between reader communities, content creators, and advertisers. This structure does not account for sovereign creators and writers, but some overlap still exists even in this sector of the economy. Other than that scenario, the publisher relationship with readers is becoming the key asset to advertisers as economic drivers and digital privacy laws evolve. 

    Publishers need to understand the ways this shift affects editorial content decisions and their relationship to advertising revenue. The priority in recent years has been editorial content decisions that protect advertising dollars by viewing readers as brand consumers first. Protecting the attention of consumers protected their value to advertisers and, therefore ultimately, the viability of news media publishers.

    As explained earlier, reader attention is drawn most strongly to negative news, so the attention-based advertising incentive for publishers was to publish more negative content. The case last summer seems to contradict that, but the takeaway should not be for publishers to stop reporting on or creating negative journalism content.

    Instead, the misstep was primarily by brands and advertising agencies who misunderstood the economic, tech, and legal shifts--and with them, the increased value of strong publisher-reader relationships for ad performance. Advertisers preemptively and broadly blocked ad placements to solve the wrong problem.  John McCarthy for The Drum explains, “Marketers are under the impression ads next to positive news stories garner less risk and better outcomes, but there’s scant evidence to back that. In fact, research by Reach suggested that an ad placement against bad news in a trusted news source would do little, if any, reputational damage.”

    Digital news media advertisers made the mistake of thinking that only the tone of news impacts consumer engagement, when it is actually becoming the quality of reader relationships with publishers that does so. 

     

    Quality Technology Drives Quality Publisher-Reader Relationships

    The economic shift suggests publishers should be asking what drives a quality relationship with readers that they can then also leverage as value to advertisers. Quality technology is part of the answer. Thus, a quality subscription, ad, and content display experience is more important than ever; so are good data collection, analysis, and segmentation practices. Increased dependence on contextual and sentiment targeting informed by artificial intelligence can also help publishers and advertisers understand the publisher-reader relationship better. 

    McCarthy writes, “Going deeper than keywords to understand the sentiment and emotion around the web pages is the ‘difference between content being blocked or monetised.’ It will free up more inventory than has been historically available and will give brands more control.”

    Importantly, the publisher, digital advertiser, and reader universe is still between economic, technological, and legal shifts. It’s also not necessarily true that the ecosystem will see the attention-based economy dissolve completely. Thus, there may be a need to discern when attention-based, tone-dependent content versus creator-based, relationship-dependent content is driving revenue performance. Balancing that will be important for both publisher subscriptions and advertising.

     

    Quality Storytelling Strategies Can Boost News Media Integrity, Reader Interest, and Publisher Profits

    A quality digital experience is not the only factor driving reader trust, especially for younger, digital native generations. How stories are told still matters, and journalistic ethics, accuracy, and integrity are essential. Publishers and media organizations play a powerful role in shaping public narratives, and they must carefully assess the impacts of their content and tone choices on this public trust.

    For example, the Associated Press called the impacts of social media and COVID19 stigmatization a “toxic combination” in which “the warp speed and reach of social media in the pandemic era gives the practice [of public shaming] an aggressive new dimension.” News media organizations can instead play a role in producing empowering, informative content--even while reporting on bad news. The Center for American Progress said of public health communication strategies, for example: 

    “The goal should be to inform and empower...Public health messaging needs to make clear the link between the population-level crisis and the importance of individuals’ roles in ending the pandemic by explaining what risk reduction means for everyday life.”

    Communication strategies that go beyond rage or shame, despite the necessity of sharing bad news, can benefit everyone. A 2017 Reuters Institute Digital News Report found that across 36 countries, “less than half the population (43%) trust the media...and almost a third (29%) actively avoids the news, rising to 38% in the United States. Instead of enriching their lives, our work depresses them.” Publishers can change that by reporting bad news in a way that still offers empowerment, solutions, actionable information, and even hope in challenging situations.

     

    How Publishers Approach Bad News Determines Its Impact on Business

    BBC ranks as the most trusted news media organization for Americans from both major political parties. They were only one of three news media brands who have earned that kind of trust from U.S. readers. While BBC reports on a range of topics both positive and negative, they are still trusted by that key readership because Americans view their reporting as factual and objective. While the news brand has many reasons for its global appeal, their success partly demonstrates that it’s not merely the tone of content--positive or negative--but the way that content builds key readerships’ trust in a publisher brand.

    However, journalism think tank Nieman Lab’s founder, Joshua Benton also said, “What if distrust is a smaller problem than the way news consumption leaves readers stressed, anxious, depressed, afraid, disempowered, and exhausted?...[Is] it possible we’ve been overestimating the role of trust in why more people aren’t reading, watching, or listening to our stories? Remember, “It can have a negative effect on my mood” is consistently a bigger factor in why people avoid news than “I can’t rely on news to be true...News about big problems is depressing if I’m not presented with potential solutions.” 

    Success for publishers in evolving technological, legal, and economic landscapes will require some key adjustments:

    • They must educate advertisers about the value they offer through reader relationships and first-party data in the context of current economic, technological, and legal shifts.

    • They cannot continue overreliance on negative news content, nor overcorrect to simply offer positive news; instead, they must focus on quality, accurate content to build value.  

    • To define accuracy and quality in their content, publishers may have to deepen their reporting to include solutions, not just facts about problems. They may also need to begin differentiating more clearly between fact-based reporting and analytical or opinion-based reporting in editorial decisions. 
    • They must be responsive to their readers and ensure they are offered high quality subscription, ad, and content experiences. 

    Publishers who skillfully educate advertisers and make better tech, tone, and content choices hold power to potentially return journalism to its public service roots and significantly benefit their bottom lines. Schedule a call with us today to talk about Adpoint for advertising management or Amplio for subscriptions and make sure your company's tech is contributing. 

    New call-to-action