How News is Made, by Dale Dougherty
There should be a book titled "How News Is Made," a book that could be for
journalism what "The Jungle" was to the meatpacking industry. My version
would offer no conspiracy theory, but I'd point out the preponderance of
sloppiness and lazy thinking coupled with a herd mentality, most especially
in business journalism. I found a great example to illustrate what I've been
thinking about, tipped off by an article written by Carl Bialik in the Wall
Street Journal.
First, most of what we call "news" today starts out as a press release,
which then becomes a headline, a sound-bite, and eventually a story. In a
parallel to the way government operates, in which special interest groups
lobby to create or defeat legislation, most of our news stories come as a
result of PR efforts paid for by special interest groups (businesses) who
have a stake in what becomes "news." (I'd love to come up with a taxonomy of
stories by type just to show how few types there really are but that's a
different point.)
Second, reporters like to ask good questions for which there may not be good
answers. However, they'll force an answer because you can't say "nobody
knows."
The third is that everybody loves numbers, regardless of where they come
from, and these are the best kind of answers, regardless of whether the
numbers are true.
Bialik's article mentions a press release from the National Retail
Federation, which concerns the holiday shopping over the Thanksgiving
Weekend.
(The NRF actually called it a "News Release" and it was released on Sunday,
November 27th, even before the Thanksgiving weekend ended.)
It begins:
Blockbuster Black Friday Weekend
Sees Sales Near $28 Billion
145 Million Shoppers Hit Stores and Internet, Up From 133 Million in
'04
Washington, DC, November 27, 2005--The ceremonial kickoff to the
holiday season began with a great deal of fanfare as 145 million shoppers
flooded stores and the Internet hunting for popular electronics, clothing,
and books. An NRF survey conducted by BIGresearch found that the average
shopper spent $302.81 this weekend, bringing total weekend spending to $27.8
billion, an incredible 21.9 percent increase over last year's $22.8 billion.
"As expected, retailers offered substantial discounts and savings on
Black Friday to bring people into their stores and consumers held up their
end of the bargain by shopping," said NRF President and CEO Tracy Mullin.
"Even though many retailers saw strong sales this past weekend, companies
will not be basking in their success. Stores are already warming up for the
next four weeks because the holiday season is far from over."
More than 60 million shoppers headed to the stores on Black Friday,
an increase of 7.9 percent over last year. Another 52.8 million shopped on
Saturday, a rise of 13.3 percent over 2004. The number of shoppers out today
is expected to be close to last year, with about 22 million people shopping.
Note that this story is built with two pieces of information: it has numbers
and it offers an explanation for those numbers. It's really the perfect
story, regardless of whether it's true or not. More importantly, the
information attempts to provide an answer to a reasonable question: "How
busy was Thanksgiving weekend for retailers?" and one can *not* leave the
question unanswered. The possible answers are "up, down or flat." The answer
"We don't really know" is not acceptable; it's not news. So the press
release provides an answer that Thanksgiving Weekend sales were up
significantly and an answer that the NRF people like. That answer is also
believable because a national industry trade group had real data to back up
its claim.
One might also want to point out that there is no real opposing trade group
here to offer a counter-claim. Those who don't shop over the weekend aren't
represented by anyone with a commercial interest in this question. Also, I
should mention that the "big" story the day before Thanksgiving is how many
people are traveling for the holidays, and how crowded the roads and
airports are. That story doesn't seem to have any impact on the
post-Thanksgiving story, which says everyone was shopping.
The NRF "news release" thus becomes news, variously massaged and distributed
by news services. You might think of it as a kind of journalistic mash-up.
Read the beginning of this story from Bloomberg news service:
Weekend Sales Jump 22% to $27.8 Billion, NRF Says (Update1) Nov. 27
(Bloomberg) -- U.S. retail sales jumped 22 percent to $27.8 billion during
the post-Thanksgiving weekend, as shoppers flocked to stores to buy
electronics, clothing and books, the National Retail Federation said.
Shoppers spent an average $302.81, the Washington-based trade group said
today in a statement. It said 145 million shoppers went to stores and the
Internet, as retailers offered substantial discounts.
Fortunately, someone looked deeper into the numbers behind the news story.
In Wall Street Journal's The Numbers Guy column, Carl Bialik does a nice job
of tracking down where this data comes in his article " Holiday Sales
Numbers Don't Add Up ."
He begins by noting: "The day-to-day behavior of American shoppers has
become harder for investors and economists to measure" suggesting that the
right answer to the question is "we don't really know, at least not now."
Then he looks into the research provided by the National Retail Federation,
which was done by BIGResearch, LLC. He learned that the research company had
4,209 respondents to an online poll and they answered the question: "How
much did you spend on holiday shopping?" On that basis of the survey, they
extrapolated to the rest of the US population and come up with a 22%
increase. Bialik also mentions other market research groups that are trying
to measure sales, and examines their methods. ShopperTrak uses video
surveillance to track shopping activity and it reported sales were about
flat.
Like the Nielsen Ratings for TV, we have numbers that are treated as factual
but they based on a fairly small sample of people and questionable
methodology. The 4,200 respondents who said they'd spend roughly $300 on
holiday shopping are themselves only responsible for $1,2M in sales but that
number can be multiplied to produce a much more impressive number of $27B in
sales. 4,200 people suddenly speak for 250,000,000 or so. The bigger the
number, the more we seem to know!
It's like the person who tells you "everybody knows this or that", and you
press the person how they know this and it comes down to a friend or
relative who made an offhand comment. Hardly a significant sampling. Besides
this sampling methodology just doesn't seem logical. How many truly
representative people do you know? In other words, do you know anybody you'd
say could speak for 60,000 other people in all matters of any importance?
Would the more truthful headline be considered news? 4,200 people say they
spent on average $300 shopping over Thanksgiving Weekend.
Next I went searching for other stories that used the "News Release" as the
basis for a story.
I found this item, as reported on NewsHound, which quotes Brit Hume on Fox
saying:
"US retailers recorded sales of $27.8 billion over the Thanksgiving
weekend & the National Retail Federation says the industry is on track for
its second biggest season since 1999. Weekend sales were up 22% over a year
ago and discount chains and online retailers reported record sales. So how
does The New York Times report the good news? On the front page of its
business section, The Times notes that shoppers avoided mall-based specialty
stores in favor of the discount retailers, reporting that Friday's mall
sales dropped nearly a full percentage point from last year."
Hume treats the NRF release as fact and its source is not really clear from
his sentence. He takes the NY Times to task for not reporting it as "good
news." He doesn't address the question
In fact the Times story, titled "Mall Stores See Trouble in Sales Data",
referenced the NRF report but it certainly did more to explain how the
conclusion was arrived at:
"In a survey of more than 4,000 consumers over the weekend, the federation
found that 61 percent made purchases at discount retailers, 47 percent at
department stores and 41 percent at specialty stores. Over all, it estimated
that the weekend's spending would rise 22 percent, to $27.8 billion."
The Times' article cites more sources and does it more even-handedly. Hume
apparently thinks reporters have an obligation to trumpet holiday sales, as
though it were a belief made true by repetition.
In another example, the Knight Ridder newspaper in Lincoln, Nebraska, The
Journal Star, ran a story that opens:
Black Friday sales best in history, retailers say; others not so
sure By SUZETTE PARMLEY/Knight Ridder Newspapers Deep discounts, especially
on consumer electronic goods, and longer hours caused a 22 percent increase
in sales over last year during the Black Friday weekend -- making it the
best weekend ever for retailers, according to the National Retail
Federation.
This story echoes not only the data but also the explanation from the NRF
press release. And yes, it's careful to cite the source. It also hedges its
bet, answering the original question with: Way Up; Maybe Not.
We get the same kind of story from the SF Chronicle:
Holiday sales look promising Weekend yields mixed results, but
retailers are hopeful
Carolyn Said, Chronicle Staff Writer
Tuesday, November 29, 2005
Steep discounts drew hordes of bargain hunters to stores this
weekend but early results were mixed for the traditional kick-off to the
holiday shopping season. The National Retail Federation called it
Blockbuster Black Friday Weekend, saying that weekend spending hit $27.8
billion, up 21.9 percent from last year. A survey of 4,209 shoppers
conducted by BIG-research for the trade group found that the average shopper
spent $302.81 during the weekend.
And more of the same from the Washington Post:
For Retailers, It Looks Like Holiday Season Is Off to Strong Start
By Ylan Q. Mui
Washington Post Staff Writer
Monday, November 28, 2005; Page A10
Shoppers did not hold back this holiday weekend, spending a whopping
$27.8 billion and setting the tone for what retailers hope will be a very
merry Christmas, according to the National Retail Federation. The industry's
largest trade group said yesterday that sales from the day after
Thanksgiving -- nicknamed Black Friday -- through Sunday jumped nearly 22
percent over last year. Holiday sales traditionally account for about
one-fifth of retailers' annual business.
It really is as though reporters attended the same lecture and took down the
same notes.
Journalists were good students. I was told the answer so I just have to
repeat it using my own words because if we all gave exactly the same answer
in the same words, that would be copying.
Google shows hundreds of stories citing the NRF release. Not all of the
stories conclude that sales for the kickoff to the holiday shopping season
were up from the previous year but it was the basis for those that did
report that sales were up. If that's the story you wanted to write, the NRF
could help you write it.
It's also interesting how the lead paragraphs are so similar at conveying
without qualification that sales were up, which is exactly what the NRF
wants to read and hear. The assumption of the retail industry is that people
will spend more if they think others are doing the same thing. This is the
"good news." Similarly, "bad news" such as saying that sales are down can be
used to alert people that they aren't doing their best to contribute to
holidays sales.
It's as though the holiday season is a fundraising telethon, and we've got
to get everyone to do their part. NRF is not alone in spreading holiday
disinformation. Companies like to send out self-serving research directly
themselves. The folks at BoingBoing shared this recent email sent to them,
from an analyst at pricegrabber.com who wanted them to write about
pricegrabber.com:
"I am a marketing research analyst with PriceGrabber.com and after
looking at your blog, I thought some of our popular holiday shopping data
might be of interest to you and your readers. It's clear from our site
statistics that online shopping will have its best year ever as we are
seeing impressive growth so far. On Black Friday we saw a 77% increase in
shoppers compared to last year, and Cyber Monday had an 88% increase in the
number of referrals we sent to merchants. Also, based on an earlier holiday
survey we conducted we found that more than 50% of online shoppers surveyed
said they would start their holiday shopping before Thanksgiving, and
interestingly, despite that headstart, 75% of all respondents said that no
matter how they plan in advance, they still expect to be shopping within 5
days of the holiday."
I am no math whiz but what's clear is there no real data, just pretend
holiday data, however popular they think it might be. A percentage increase
from last year, which could have been really, really low. (And who agreed
that we now call the day after Thanksgiving, Black Friday; I've only cared
whether or not it was a work day. And what about the Monday after
Thanksgiving weekend Cyber Monday; shouldn't it be called Black Monday
because it's hard to get back to work if you were lucky enough not to work
retail and have a four-day weekend.) Is it really news that some people shop
before Thanksgiving and won't finish until just before Christmas?
Then by the end of Tuesday, November 29, we get a quite different kind of
report about Thanksgiving sales, from Reuters:
"Expectations that U.S. retail sales activity following the Thanksgiving
holiday may not be as strong as some analysts had predicted knocked Google
down $19.94 to $403.54 in brisk turnover of 21.4 million."
This Reuters report appears in EWeek the New York Times and CNN
Are they reading from a different hymnal? I don't know but this is a typical
Wall Street story where the challenge of a story is to fabricate a reason
for a change in the market. You'd think from the story that a bunch of
people did, in fact, know that holiday sales were down, despite what the NRF
said. But maybe they didn't really know anything either. There just has to
be a reason Google's stock price fell and the "holiday sales were down"
reason was there for the taking.
Given another day, the story changes and we have a different explanation
(again from Reuters):
Shares in Web-search leader Google Inc. (GOOG.O: Quote, Profile,
Research) slid 4.7 percent on Tuesday, their biggest decline in a year, as
analysts expressed concern that its stock was overpriced after soaring 40
percent in two months.
Merrill Lynch analyst Lauren Rich Fine said in a research note on
Monday that Google needs to develop new sources of revenue beyond its
booming search advertising business to justify the current valuation on the
stock.
Different analysts, different day, and you need a new story. Back to
Thanksgiving sales, which were either way up or dramatically down.
(Interestingly, some parts of the story from the previous day, including
other quotes, were carried forward but not the part that connected Google to
a slump in Holiday sales.)
On the 30th, we have a story from TheStreet.com by Nat Worden, saying that
we might know on Thursday the answer to the big question. Nonetheless, he
sees "all signs pointing to...a great turnout" while also saying we won't
really know until later.
Retail Reports Could Hold Holiday Clues
All signs point to a healthy November when chain stores report to
Wall Street on Thursday. The drama for investors is what they say about the
holiday season.
The current batch of sales data will include results from Black
Friday and the following Saturday, when shoppers flooded into discount
stores and electronics chains in search of holiday markdowns. Early returns
on the post-Thanksgiving rush indicate a great turnout, although aggressive
pricing and promotions have stoked concern about whether the spending will
continue into December.
He also cites the NRF research later on in this article and he does note
their methodology. He even quotes another analyst who says that the NRF
numbers look high. Nonetheless, he seems very supportive of their numbers.
But the point of his article should be to disregard early reports and wait
for better information, if you even care.
Don't you just wish that journalists wouldn't make up answers to questions
they can't answer? Don't you wish they could sift through self-serving
research and not repeat numbers that are at the least, meaningless, if not
wholly bogus?
The funny thing is that this same news is made every year in the same way as
reliably as the turkey at Thanksgiving. The Internet allows us to see how
news is made, as though we were walking through a factory tour, and we can
compare the very similar results of a mass production system. Turns out the
news can be as fake as a department store Santa.
source: www.boingboing.net/fakenews.html