In an Era of 'Fake News,' What is the Future of Advertising and Publishing?

A recent panel discussion at Harvard Business School considered how traditional institutions of democracy such as publishing and advertising are being undermined by the use of internet technologies.
by Jen Deaderick

A year ago, discussions of the business of digital media may have focused on the plateauing ebook market or the diminishing pay for content providers. But after the 2016 presidential election, in which Russian operatives allegedly used Facebook ads to sow discord among the electorate and the new White House popularized the term “fake news,” the influence of social media advertising and online publishing requires serious reexamination.

That began to happen October 24 at the The Future of Advertising and Publishing conference held at the Harvard Innovation Lab in Boston, where participants pondered the impact of fake news on democracy, the potential for government regulation of the internet, and the future of business models that support traditional media such as newspapers.

The event was co-sponsored by the Tow Center for Digital Journalism at Columbia University, the Digital Initiative at Harvard Business School, and the Shorenstein Center on Media, Politics and Public Policy at the Harvard Kennedy School.

The question central to the conference was posed midway through the first panel, Social Distribution, Advertising, and the Free Press.

“Do we even know now what an ad is?” asked Emily Bell, director of Columbia’s Tow Center for Digital Journalism.

Panelist Nicco Mele, director of the Shorenstein Center, noted that all those things we call ads on Facebook are really a wide variety of content: links, posts, images. Using Facebook’s deep knowledge of its users, any of these things can be promoted to carefully targeted audiences. These audiences could number in the dozens, and the ads could cost as little as a dollar a day.

These targeted ads on Facebook became problematic in the 2016 election: With such small and specific audiences, Carroll said, it was impossible for citizens and reporters outside the targeted population to even see what information or disinformation was being promoted during the election, and who was seeing it. This led to the feeling of a fragmented society that many experienced when they saw friends and family sharing falsehoods on social media that seemed to come out of nowhere. As Carroll put it in his opening presentation, Facebook had “put military grade PSYOP [psychological operations] weapons in the hands of anyone.”

Abuses of digital technology are tearing at traditional institutions of democracy, speakers at a Harvard conference said.

Mele wondered about the implications for public policy if we can no longer think of the US population as a single public. The nation’s founding documents make an explicit assumption that there is a “public” (“We the people,” states the preamble to the US Constitution) for which laws and policy are constructed. How is the notion of broadly guaranteed human rights impacted if we are increasingly divided into multiple publics?

“Ads are not being sold. Audiences are being sold,” said panelist David Carroll, Director of the MFA Design and Technology graduate program at Parsons School of Design.

With extensive background experience in digital content, most recently as executive vice president of product and technology at the New York Times, Kinsey Wilson, currently a visiting fellow at the Shorenstein Center, had a somewhat positive view of the future.

He noted that while the majority of the Times’ revenue had previously come from advertising, in recent years the numbers had flipped so now nearly two-thirds of revenue came from print and digital subscriptions. This, he felt, pointed to a willingness among some people to pay for fact-based, responsibly reported content. Meanwhile, he foresees a decline in revenue from advertising in the news industry.

A concern shared by all of the panelists was they dry-up of local news outlets even as national papers like the New York Times are doing pretty well financially. The disappearance of classified advertising in particular has killed off or severely crippled many local papers. . So few local reporters are sent to Washington, DC, according to Mele, that almost half of US senators will never be asked a question by a home-town reporter while the Senate is in session.

Noting the New York Times success with subscriber-based revenue, panelists discussed whether a subscriber model could also help local and other narrowly-focused news sources. Mele mentioned the Marshall Project, which investigates criminal justice stories for its subscribers, as an example of a single-subject news vertical, which he considers to be a promising publishing model for the future. The panelists also discussed the possibility of communities starting local news co-ops to cover local issues.

Should government step in?

The touchy topic of government regulation of the internet was debated as well.

Wilson wondered if we should continue to hope that new institutions supporting fact-based reportage and publication would spring up organically, or whether it was time to start looking to government to sponsor such activities. He explained that as a society, being able to form a consensus around issues based on agreed-upon facts was vital.

Our legislative bodies and courts are still wrestling with if and how to regulate technology that is not only unprecedented in their capabilities and varied in their business models, but also constantly evolving.

Bell, who is English and thus, as she put it, “a European until 2019,” pointed to some of Europe’s attempts to regulate the internet. She characterized “right to be forgotten” laws that have passed as poor legislation but nonetheless important first steps to protect people’s privacy, and spoke of attempts to define and categorize internet activities as a “data market” as useful.

In the United States, the First Amendment is central to nearly every debate on regulating the internet, along with questions about who owns the content we create, and even what can be defined as content we create in the first place. Addressing the question of who should decide what should be published online, Mele noted that Facebook already makes those decisions, but secretly. Without greater transparency from Facebook about how they make publishing decisions, well-written regulation is impossible.

Earlier, Carroll pointed to how beneficial “fake news” was to Facebook, because it is compelling content and therefore broadly shared by users. He warned that it would be difficult to realistically restrain the sharing of misinformation as long as the online business model was based heavily on user engagement.

The benefits and drawbacks of the new hyper-connectivity

In his opening presentation at the conference, Carroll had introduced the audience to the term “Ad Tech Duopoly,” which refers to the current dominant twins of the online advertising environment: Facebook and Google. Both have linked user profiles to search histories in the last few years, leading to the now common experience of seeing an ad on Facebook for a product you searched for on Google just moments before.

The second panel, “Revenue Models & Adjacent Media Spaces,” discussed the benefits and drawbacks of this new hyper-connectivity. It was moderated by Bharat Anand, the Henry R. Byers Professor of Business Administration at HBS and author of The Content Trap: A Strategist’s Guide to Digital Change.

“It’s hard to think about revenue without willingness of users to pay,” Anand said.

The panel included Brendan Eich, a technologist instrumental in creating the programming language JavaScript, now a primary tool for tracking our activities on the internet.

Ads, Eich pointed out, can be blocked, but tracking is difficult to block. To decouple purchases and website subscriptions from credit card companies and user profiles, he envisions a browser with a built-in untraceable crypto-currency payment system. Using this automated system, users would pay nominal sums for content as they moved between web pages without the attentions of outside commercial interests.

All of the panels saw their main job as linking together the vast and fragmented contents of the internet. As Janet Balis, a principal for Ernst & Young’s media and entertainment practice put it, “The consumers have already taken all the pieces apart.”

Anand summed up what is apparent now, but wasn’t obvious when the internet was created: “The power of digital is not just about putting content through pipes,” he said. “The power lies in creating the links between content.”

The challenge lies in who has the power to create the links, and how they are able to use it.

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