American writer Max Ehrmann wrote the prose poem Desiderata in 1927 in which he said: “Exercise caution in your business affairs, for the world is full of trickery.” In my experience, you need not look further than the media to see plenty of the trickery Mr Ehrmann refers to.
When it comes to media reports, it would be unwise to believe anything you’re told on face value. An old story out of Russia articulates this well.
One evening in the late 1970s Radio Moscow apparently made an announcement telling people that if they came down to the Red Square they could get a free car. Crowds of people turned up only to find it empty and to be told the next day that it wasn’t in Moscow at the Red Square – it was on the Nevsky Prospekt in Leningrad. And, you couldn’t get a free car, you could only get your bicycle stolen.
It may be a bizarre account, or maybe not so strange when you consider how frequently people and businesses get taken in by media reports, acting blindly on the information dished out to the detriment of themselves and others.
More recently, shares in Twitter surged nearly 8 per cent when an article purporting to be from Bloomberg appeared online claiming the company had received a $31 billion takeover offer.
The article looked like a Bloomberg report even down to the time stamp. It caused the stock to spike over a 10-minute period. Then, it nosedived when people realised the report was a hoax.
People subsequently pointed out on Twitter, yes on Twitter itself, that the story was obviously a fake because it was filled with grammatical errors, it had a different writing style to that used by Bloomberg and former Twitter CEO Dick Costolo’s name was misspelled as “Costello”.
Perhaps obvious in hindsight, but many people were taken in by this pump and dump scheme, allowing scam-merchants to make a killing getting rid of their Twitter shares at inflated prices.
Twitter stock has been plummeting with the company’s earnings coming in below estimates. Anything that could lift the share price to make money would have been an idea going around the traps. A fake Bloomberg report fooled enough people and did the trick.
Americans don’t have monopoly on this kind of malarkey. Australians, including those in high places, have also been known to act foolishly on the back of media reports.
Just a couple of weeks ago, our agricultural industry was left reeling after Indonesia announced that they would give Australian exporters only 50,000 third quarter import permits for head of cattle. Down from the expected quota of 200,000.
Prior to the announcement, 500,000 Australian cattle were exported to Indonesia annually, accounting for 60 per cent of live cattle exports in 2014 and generating over $300 million for Australian farmers.
The Opposition immediately attributed this economic disaster to tensions between Australia and Indonesia caused by the recent execution of Australian drug smugglers, as well as to the concerns about turn-backs of asylum seeker boats.
They conveniently forgot that the Labor Party mortally wounded the Australian live cattle export in 2011; social memory and the memory of politicians are short indeed.
The damage to the cattle trade had been done by Julia Gillard. In 2011, following a Four Corners TV report showing footage of Australian cattle being mistreated, the then Prime Minister suspended all live cattle exports to Indonesia, in a move that cost the industry hundreds of millions of dollars. She didn’t even bother to call for an enquiry first.
At the time Indonesia relied on Australian beef for 25 per cent of its supply and the untimely suspension led to sharp rises in prices in the lead up to Ramadan. Was it at this moment that the Indonesian government decided to never to be placed in such a situation again?
The examples above provide a useful lesson for all businesses including retailers: exercise extreme caution when consuming information from the media.
The real world typically distributes everything along the “normal curve”, based on a Gauss bell-like function. This means that 98% of the relatively normal stuff resides in the middle and 1% at each of the extreme ends.
The media tends to operates at the extreme 1% edges, pursuing disasters and life-changing discoveries with massive poetic licence to bend reality to fit the story.
In 1964 Marshall McLuchan wrote a book titled Understanding Media, making it clear that the media doesn’t dictate the content of its broadcasts, but instead only delivers what people want to hear and see. Clearly, the majority of people find the extremes compelling.
I know this first hand, when working as a journalist in Johannesburg an editor once told me that she hoped someone would die so we have a “decent story” to run on a slow news Friday.
Just for the record: this phenomenon shouldn’t be considered in moralistic terms. As humans, we have a psychologically hard-wired “negativity bias” which feeds our collective attraction to bad news. With the rise of social media and the sheer volume of information at our fingertips, media outlets compete with ever worse or dramatic news in an attempt to win a greater audience and consequently profits.
Don’t beat yourself up if you too let the media mislead you in the past. When our government makes strategic economic decisions based on emotions, without checking the facts, surely you can be forgiven your small transgressions.
Bottom line: It pays to develop a healthy habit of skepticism when it comes to the news. If you think something affects you, investigate the matter well before you act.
Discussions about the media become multi-faceted when one talks to retailers. Not only must they navigate the incoming news wisely, but they also need to handle the media as a channel to their customers. Knowing how the media works can save a retailer from making misinformed decisions in both these areas.
In part 2 of Desiderata and the Media we will share with retailers our insights on how to work with the media to better engage with your customers.