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The unfortunate love child of Facebook, Google, and the online media

Art: Oroubouros, Lucas Jennis, 1625

The online media landscape is looking really bleak these days. Countless layoffs, downsizing, and news outlets closing. Industry consolidation. Local newspapers shuttering. Fake news and deepfakes. The erosion of trust. News fatigue. Misinformation. It all adds up to a pretty shabby way to learn about what’s going on in the world.

However all of that is surface-level compared to what I think is a truly real problem that’s emerging in today’s media environment: the cannibalization of truth and news quality not by political parties or bots, but by ads.

Consider the following example as an excellent illustration of what lies ahead for us.

A couple weeks ago, Teen Vogue ran a very optimistic story about how Facebook will save democracy.  The story was a series of interviews with women working throughout various parts of the organization talking about fake news, content moderation, and whatever else Facebook is going to do for elections this time around. 

Initially, the story was posted as-is:

Then, it was labeled as sponsored content, with a note at the beginning of the article indicating it as such:

Then, that note was removed from the post. 

What followed was a lot of confusion. At one point,

the story even contained the byline of a freelancer who said she did not write it. The byline was also removed. When someone asked about the article on the verified Teen Vogue Twitter account, the account’s response was “Literally idk,” short for “I don’t know.” That tweet was also deleted.

What’s up at Teen Vogue 

Teen Vogue, during Elaine Welteroth’s tenure as the editor-in-chief, has become known as an extremely progressive media outlet. It’s published articles about gaslighting and national politics alongside features on Ariana Grande.

This, on the one hand, is very admirable. It’s very possible to have a publication discussing both serious and light things. After all, I devoted whole newsletter about an Elon Musk meme, and one on the Kardashians. And in fact, this is part of Normcore’s philosophy,

Alexander Pushkin said in Eugene Onegin, “Быть можно дельным человеком/ и думать о красе ногтей…” - It’s possible to be a very practical person and still think about your nail polish.”

However, I am not a dying print publication who desperately needs to revitalize my brand. But Teen Vogue is.  It’s wholly possible and even probable that Welteroth cared about nothing except educating teen girls about political issues. But, even if the motivation was pure, the payoff for developing a woke slant has been huge.  Teen Vogue, before she got started with the transformation, was struggling. And now, all of a sudden, interest from the mainstream media  - and, more importantly, advertisers - is way up. 

Considering that Teen Vogue’s ad spaces reportedly average between 56,000 to 195,000 for spaces ranging from one-third page to full-cover ads, this decline posed a serious problem for Condé Nast. With Picardi’s digital savviness and Welteroth’s passion for activism, the magazine got a chance to redeem itself. Although their broadened scope pissed people off, Kim Kelleher, CEO of Condé Nast’s Women’s Group, told The Business of Fashion that advertisers are now seeking to align themselves with the brand’s “wokeness.” While Welteroth and her team might desire to spark a personal revolution for their readers, Condé Nast’s decisions are still rooted in capitalist profit.

When asked about the next steps for Teen Vogue, Welteroth told the New York Times Magazine, “We’ve come to stand for something, and it has resonated. So Phase 2 of Teen Vogue’s evolution is activating this audience that we’ve galvanized. I see that happening through live experiences, products, and services. You’re woke. Okay. Now what?” This shift includes a convention, a future line of Urban Outfitters merchandise, and television appearances like Welteroth’s recent cameo on black-ish.

But, in spite of its success, Teen Vogue is still in an extremely competitive and difficult landscape for attention, and the mix-up revealed a glitch in the face of the online news Matrix that shows two really important problems at news publications today.

First, Facebook and Google are cannibalizing publishing revenue, and, second, Facebook and Google are cannibalizing content. 

Both of these are problems because they’re creating insane competitive pressure for news outlets already strapped for cash and contributing to extremely shoddy clickbait journalism, and even worse, advertisements that look like journalism. 

 But first, some context from the history of the American news industry. 

The School of Church and State

In the old days, newspapers were initially sponsored by the main American political parties as a way to get their message out. With the advent of steam-powered printing presses in the 1830s, (remember steam? all the rage for EVERYTHING in the 19th century), more newspapers could be printed more quickly and cheaply, and the busines model changed. 

Publishers needed to run more content to be able to sell the newspapers more frequently,so Benjamin Day, along with a few others, developed the concept to the penny press.  The content that sold quickly was, unsurprisingly, clickbait

Most importantly, Day changed the very meaning of news. While 6-cent papers wrote about elite-level concerns—international business, broad national news, shipping schedules, etc.—Day set out to provide more street-level happenings: local sports and crime, scandals, gossip, and general interest, i.e., information that would be appeal to the average Joe and Jane.

And Day started a new, revolutionary trend - newspapers not paid for through subscriptions, but with advertising

Day didn’t just revolutionize the news industry. He created it. Newsstands wouldn’t carry his off-market Sun, so Day hired newsboys to sell it on the street; rather than relying on subscriptions, as elite papers did, Day sold ad space, expanding that industry and providing a fairly stable business model for newspapers that lasted well over a century, until—well, you know. (The second part of Day’s introductory credo described the Sun as “an advantageous medium for advertising.) And Day’s paper pioneered timeliness in news, something dominant papers didn’t value, instead printing “news” that was sometimes weeks or even months old.

Ads ruled newspapers for a long time. While they did wean newspapers from political advertising and set newspaper norms for a long time, once the internet happened,  it was the Wild Wild West all over again. 

Online, among the crocodiles

Being online gave the newspapers a whole new world full of potential,  but soon, they were facing the same types of competitive pressures, both for money and for attention. As print publications (like Teen Vogue, which shuttered its print magazine entirely recently) struggle to stay afloat, a whole new world of dangers await them online. 

The biggest problem right now is that Facebook and Google are essentially in a duopoly that controls 95% of the online advertising market, which means that newspaper advertising is not as effective, nor as competitive of a market. 

The other big problem is that, even if you don’t believe that advertising revenues are a problem, distribution is. 

Google and Facebook now control content distribution, in much the way that newspapers used to back in the old days: 

So, why did newspapers have a local monopoly in the first place? Mostly due to the high fixed costs (e.g., printing presses, warehouses, reporters, delivery trucks) and low marginal costs (i.e., paper and ink) of newspaper production and distribution. Therefore, it was very easy for newspapers to dominate the local market with one bundled product, which included everything from political news and opinion to sports and classifieds. The monopoly profits were used to fund, among other things, investigative journalism (which would lose money as a standalone business but provides value and prestige as part of a bundle).

The internet blew this arrangement to pieces. No longer was owning printing presses and delivery trucks sufficient to charge advertisers and readers whatever you wanted. The newspaper was unbundled by many internet companies, large and small. 

Nowadays, many newspapers eagerly and prominently feature Facebook/Google/Twitter sharing buttons. 

This is in spite of the fact that these are the very companies that are taking away attention share and revenue in the first place: 

Dependence generates desperation—a mad, shameless chase to gain clicks through Facebook, a relentless effort to game Google’s algorithms. It leads media outlets to sign terrible deals that look like self-preserving necessities: granting Facebook the right to sell their advertising, or giving Google permission to publish articles directly on its fast-loading server. In the end, such arrangements simply allow Facebook and Google to hold these companies ever tighter.

For example, remember how Facebook told everyone to make more videos because more videos caused more engagement, and companies had to pivot to providing that? Well, turns out it wasn’t true

To back up its claims, Facebook touted impressive statistics that showed vast numbers of people were not only seeing video in their feeds, but pausing to watch videos for extended periods of time. That kind of data is catnip to online advertisers, who pursue mostly in vain any morsel of evidence that people are actually paying attention to the ads they spend so much money on.

As advertising budgets shunted toward video to tap the apparent Facebook viewership goldmine, publishers’ editorial budgets followed. Publications such as Mic, Vice, Mashable, and many others laid off writers and editors and cut back on text stories to focus on producing short, snappy videos for people to watch in their Facebook feeds.

Now Facebook has to pay $40 million in a lawsuit about it

What’s even WORSE is that they’re also squeezing the competition from the content side: when you go online, you’re not only choosing between the New York Times and the Washington Post, you’re also choosing between reading tweets, your Facebook feed, and Instagram.  This leads to an enormous race to the bottom in quality of the news provided. It’s resulted in clickbait, crappy videos, misinformation being published quickly to beat out the hundreds of other providers that can provide it. 

Stuck in the Middle with You

Squeezed from all sides, the industry has been having a hard think about where to go.  One thing they’re trying out is through subscriptions, much like this very humble newsletter. The New York Times saw subscriptions rise over the past couple years at the same time as its online advertising  revenue fell. 

The Times’s ad business remains robust relative to the competition, but it’s not immune. Our print advertising revenue dropped 16 percent — or $43 million — during the first nine months of this year, compared with the same period in 2016. A rise in digital advertising — of $23 million — wasn’t enough to make up for the decline.

But something else was more than big enough to make up for the decline: Subscribers.

Revenue from digital-only subscriptions jumped 44 percent — or $75 million — in the first nine months of this year, compared to the same period last year.

But even subscriptions is not enough for big companies who have enormous editorial staff to support and fancy New York bureaus costing $850 million to build to pay for. 

So they’re increasingly turning to an ad-ajacent strategy known as advertorial.

Advertorial 

Advertorial, also known as native content, is content that looks like it’s written to be part of the publication, but is, in fact, written by advertisers, and placed in the magazine, newspaper, or website to make it seem like part of the actual publication.  The word itself is almost as annoying as the strategy.

It’s very subjective as to what sponsored content actually is, but it’s been around for years and years. Paul Graham, back when he used to be right, wrote about one of the most insidious forms of sponsored content, PR, 

"Suits make a corporate comeback," says the New York Times. Why does this sound familiar? Maybe because the suit was also back in February, September 2004, June 2004, March 2004, September 2003, November 2002, April 2002, and February 2002.

Why do the media keep running stories saying suits are back? Because PR firms tell them to. One of the most surprising things I discovered during my brief business career was the existence of the PR industry, lurking like a huge, quiet submarine beneath the news.

When blogging became mainstream (remember blogging?), companies would send them stuff like makeup or fancy coffee machines, and bloggers would write about them, initially without disclosing that the company had sent it. This trend made its way onto Instagram, and onward to the whole content creation landscape. 

While social content remains king, native advertising, like editorials where Facebook looks awesome in Teen Vogue, is taking off

What’s the real impact of advertorial? 

The thing about advertorial is that it’s very much in a gray area. The FTC has put out guidelines regulating it  and how to disclose sponsored content, but it can still be very hard for even the most discerning eye to sort it out. Even editors are not immune to this, which is how the Facebook/Teen Vogue dust-up happened. 

The problem is that this type of content is further blurring the boundaries between what’s real, reported news, and what’s not. Throughout the past 60-70 years, during the times that journalistic norms were established, American journalism has practiced “the separation of church and state”, where church was editorial content and state was the business side of the house that made sure the bills were paid and talked to advertisers. These two divisions were entirely separate, in theory so that nothing editorial wrote would ostensibly be impacted by loss of advertisers. 

It’s questionable whether this actually ever worked correctly, but now that advertorial exists, this wall is very quickly coming down.  A 2018 paper titled ‘We no longer live in a time of separation’ notes

Journalists have traditionally considered this separation as both an ethical principle and an organizational solution to preserve their professional autonomy and isolate their newsrooms from profit-driven pressures exerted by advertising, sales and marketing departments. However, many news organizations are increasingly integrating their editorial and commercial operations. 

What this results in is the kind of confusion that happened with Facebook. As departments integrate, this will only continue to happen in the future, and not just with publications, but with readers, as well. 

So while newspapers continue to raise the alarm on fake news, ultimately, they’re the ones causing it by blurring the boundaries between ads and content. 

Finale

The very ironic thing about the Facebook kerfuffle is this: Facebook initially took away Teen Vogue’s advertising money by redirecting advertisers through Facebook. It took away social features. It took away attention. And now, the cherry on top of all of that is that Facebook paying back the money it took in the form of sponsored content, and by doing so, taking away editorial space from whatever else Teen Vogue could have run in its place. Ultimately, in this vicious cycle of interdependence between the news and online advertising, both are eating each other’s tails, and in doing so, are taking away the very last shred of credibility the media had.

One of the comments from the Facebook advertorial was, 

Know that you can’t trust everybody you meet, or everything you read on the internet. Learn to search for corroborating sources if something seems fishy. And always think twice when sharing political content on social media; make sure you’re not amplifying a hoax. Consider carefully which news sources you can trust.

Lately, it seems like not many remain.

What I’m reading lately

  1. Just finished “Because Internet.” Here’s my review.

  2. The rules of journalism

  3. Thank you to a couple people who pointed me to Uncanny Valley. Looks like a good read.

  4. Self-taught in AI

  5. Software that lasts 50 years

  6. How middle-schoolers hack apps


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This newsletter is about issues in tech that I’m not seeing covered in the media or blogs and want to read about. It goes out once a week to free subscribers, and once more to paid subscribers. If you like it, forward it to friends!

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About the Author:
I’m a data scientist in Philadelphia. Most of my free time is spent wrangling a preschooler and a baby, reading, and writing bad tweets. I also have longer opinions on things. Find out more here or follow me on Twitter.