Money not only affects the media, but the media can influence our money decisions. Journalists use words such as ‘crisis’ or ‘storm’ to create emotion. This is true of blogs too, with tools like CoSchedule’s headline analyzer encouraging bloggers to use uncommon, powerful, emotional words. (You may be interested to know that analysing the headline for this post, the word ‘money’ counted as an ’emotional’ word).
But how does this influence occur, and what can we do about it? Some more of the presentations at the Money Talks? conference elaborated on this theme.
News or advertising?
In the past, Mihálay Galik observed, the separation of advertising and news used to be a yardstick to assess the media. But what most people want to put into print is not what most people want to read.
Most of us want to look good (as we can see via social media) or advertise something. What most of us want to read, however, is interesting material.
In Pound Foolish, Helaine Olen outlines the many ways ‘gurus’ and advertisers peddle a lot of bad financial advice. I personally got sick of investment magazines after coming across articles spruiking products that (surprise!) were also advertised in the magazine. Some articles even used the same photos as the advertisements!
Traditionally, adverts made to look like articles have to be labeled ‘advertorials’. But even this practice is dubious at best. According to Olen, researchers Reuter and Zitzewitz found that advertising went ‘hand-in-hand’ with content in a lot of magazines in the US also.
In the pre-digital world, Galik summarised, journalists and media outlets controlled the supply, and consumers, the demand for news. Post television and internet, however, there is a ‘quasi-unlimited supply’. And as more of us pay attention to social media, it is not only news, but supposedly ‘real life’ that becomes blurred with advertising.
The new economy of attention
As Ty Debes pointed out in his poster presentation, attention is now seen as a resource. This has resulted in changes in the language of marketing, with eye-catching advertisements, and more aggressive language use. We are more likely to trust a product we’ve seen on social media. Debes compares an advertisement from 2014 (which essentially features only an image and the hashtag #mycalvins) to one from 1959 which is filled with text, designed to inform and persuade.
Most of the blogs I come across these days appear to be little more than thinly veiled advertisements for this or that – people raving about products that I am absolutely certain they would not have turned to their blogs to rave about were it not for sponsorship. Cooking blogs seem particularly susceptible. Once the domain of talented home cooks wanting to share their favourite recipes, I increasingly find foodie blogs an arena in which people attempt to come up with ways to incorporate some ingredient produced by a company with a budget for social media promotion. One example that stood out to me was a clean eating advocate waxing lyrical about a notoriously unhealthy donut chain…
But it’s not just ‘mommy bloggers’ taking advantage of corporations’ willingness to pay them for endorsements. The FTC recently issued warnings to 45 celebrities for not making the paid nature of their endorsements clear on Instagram (although one might question how this differs to the much older practice of celebrities being given designer clothing and accessories to wear to televised and photographed events).
Are you in an echo chamber?
Personalised news consumption via social media has also resulted in many of us entering an ‘echo chamber’, Galik says, where the views and opinions we want to hear are constantly repeated back to us. As Kahnemann’s notion of cognitive ease predicts, we are most comfortable hearing views that reinforce the beliefs we already hold. While Galik held up Facebook as an example of this, the Google Filter Bubble is another (and a reason that I recommend Duck Duck Go).
Word choice, framing and the media
Réka and István Benczes’ talk on the Greek sovereign debt crisis exemplified how quickly mass media, too, can converge. Their examination of headlines demonstrated that over a relatively short period, a plurality of expressions representing diverse views (characterising the solution as anything from ‘aid’ or a ‘deal’ to a ‘bailout’) quickly narrowed. Eventually, ‘bailout’ become the term used by the majority of newspapers. Dorottya Egres similarly examined the framing of the refugee crisis in political and media discourses.
Of course, throughout 2016, one of the most used words in the news was ‘Brexit’. This morphological and conceptual blend was the focus of Bernadette Balázs’ talk. She pointed out that these words for transition demonstrate transition in themselves, and provided a huge list of terms involving ‘Brexit’, including my favourities, the ‘Schrödinger’s Brexit’, the ‘dog’s Brexit’, and the ‘full English Brexit’.
Are you a ‘native speaker’ of economics?
Finally in her exploration of the evolution of Central Bank Communication, Ágnes Jele points out that analyses of monetary policy speeches are largely conducted by economists, often assuming the ideal ‘rational economic man’. Of course, like the ideal ‘native speaker’ of a language, this is someone who in reality, does not exist. Just as all native speakers make mistakes when speaking their mother tongue, there is no person who is entirely rational in their economic decisions. Jele’s talk is another example of why interdisiplinarity is so vital.
From the Brexit, to the Greek sovereign debt crisis, the media uses emotive terms to gain our attention. This, in turn, gains them advertising revenue. Just as freemium apps are designed to make us engage more frequently and expose us to more advertising, the use of urgent language in the media is designed to make us come back for more, more often. But as other talks at the conference point out, the language we encounter can influence how we feel. And how we feel can influence how we act. In addition, it may not just be news content that is influential, but the amount.
From snap decisions to a media diet
While timing is incredibly important in trading (as opposed to longer-term investing, where it is of decreased import), making decisions too fast can result in errors. The tiny startup SNAP Interactive Inc. soared 164% after people mistook it for Snapchat. Even more dramatically, Tweeter surged 685% after Twitter filed for its initial public offering.
For me, the trick is the same as with any healthy diet:
- Watch your portions (avoiding over-indulgence) and
- Make sure you are getting both good quality and good variety (of vegetables, or viewpoints).
And the third tip? One of the ways Darvas recommended cutting down your information intake is by being skeptical of free information. But as my experience with pricey magazines shows, it pays to be skeptical of paid sources of information as well. Stay tuned for more on this in the next post!
This is our last post in the series on the Money Talks? conference (you can catch up on the others starting here).
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Today’s featured image is a collection of the media accessible to me at our hostel in Slovenia!
What finance-related media do you use?
Have you come across any dubious-sounding schemes? Let me know in the comments!