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Message to the Geniuses

July 17, 2012

My comment on Guy Rundle’s article in Crikey today…

Something that hasn’t been remarked on a great deal is the way the ALP-Greens spat has coincided with the advent of a carbon price. It’s sad in a number of ways. 1) The oxygen has been completely sucked out of any last-ditch attempts to effectively articulate the case for a carbon price. 2) When ALP right apparatchiks attack the Greens, their values and their supposed antipathy to jobs, the first thing anyone slightly inclined to listen to them is going to think of is… the carbon price. So, worse than sucking the oxygen out of an attempt to regain support for action against climate change, the ALP right has effectively advanced the opposite position. 3) The Labor Government has, despite itself, introduced a carbon price! This having been done, fluoro-collar voters who don’t like Labor’s proximity to the Greens are hardly going to be placated by a bit of “we really hate the Greens” rhetoric. Message to the geniuses: it’s really hard to be won over by a party disowning itself.

Networks Veto Getup!, Protect Coles, Woolworths

May 30, 2012

THE main commercial television networks have refused to screen an advertisement from GetUp that highlights Woolworths’s and Coles’s poker machine interests and calls on them to adopt $1 bet limits on pokies… Peter Wiltshire, group sales and marketing director for Nine Entertainment Co, said it was a logical decision to refuse the ads. ”Someone new coming along who chooses to use their own gritty tactics to foster their own business at the expense of ours, and our relationships with our existing client base does not make any sense to me,” he said. ”So on that basis I said no.” Seven and Ten declined to comment. (Networks refuse to air anti-pokie ads, Richard Willingham, National Times, May 16, 2012)

Australia’s major TV networks have refused to run a crowd-funded ad by activist group GetUp! that attacks supermarket big boys Woolworths and Coles for, the ad claims, owning “more dangerous poker machines than the five largest Las Vegas casinos”. (GetUp! anti-supermarket pokies ad refused airtime by TV networks, Mumbrella, May 16, 2012)

The three major free-to-air TV networks are refusing to show an anti-Pokies ad by campaign group GetUp! aimed at Woolworths and Coles… a spokesman for the group … said the group had specifically inquired about a spot during MasterChef, which is sponsored by Coles, and been flatly refused by Ten. (Major networks refuse to show anti-pokies ads, Alex Hayes, B&T, 16 May, 2012)

Then there are stories that shouldn’t appear first, or at all, on a self-respecting news bulletin, like this gift to Woollies supermarkets…

“Jayne Azzopardi: Tomorrow they throw their counter-punch in the supermarket price war after Coles upped the ante with its My5 campaign.

Claire Kimball, Woolworths: Whether it’s biscuits or butter, bread or batteries, you’ll save 20% just by swiping your every day rewards card. — Channel Nine, News, 13th May, 2012”

You heard it first on Nine – not in the ad breaks – but on the news.

“Claire Kimball, Woolworths: …you’ll save 20% just by swiping your every day rewards card. — Channel Nine, News, 13th May, 2012” (‘When being first means nothing’, Media Watch, 4 June 2012)

The Economic Function of Advertising

April 22, 2012

Often advertising’s economic role is presented in similar terms to this passage from Gillian Doyle’s 2002 book, Understanding Media Economics.

“Informative advertising – giving consumers more information about what is available to them – can be seen as playing a useful role in making the market system work more effectively. It fulfils a valuable function in facilitating the interaction of consumers and producers… those who see advertising as being informative in nature tend to view it as a necessary expenditure that keeps markets competitive in a world where imperfect knowledge is a fact of life. They argue that, if we didn’t have advertising, then the transaction costs (ie. all of the costs involved in negotiating and completing a deal) of any sale or purchase – especially those to do with the search for goods and for knowledge about their attributes – would be higher and, as a result, buyers would be worse off. Not only would they have to pay for their goods and services, but the probability of their making a wrong choice would be increased. The greater the variety of goods and services offered for sale, the more difficult it is for the consumer to judge the capacity of the good to satisfy a particular want before he or she buys it and the more the consumer will value objective information to help him or her to make the right choice.” (Doyle 2002: 44)

I’ve always found this kind of account fundamentally puzzling. The arguments about why product information might be desirable and beneficial are uncontroversial enough. But from the perspective of market economics, the provision of a product shouldn’t depend on some abstract judgment about its utility. Rather, it is a question of consumers’ actual judgments as manifested in their consumption decisions. In other words, if people want product information, they’ll purchase it. All other things being equal, if they don’t want to pay for it that’s a matter for them (regardless of whether cogent arguments can be made about why product information is a wise buy). Indeed consumers do purchase product information all the time, from reviews about film, music and fashion products to car reviews and financial advice.

But, of course, it would be odd to hope that the information that producers are willing to disseminate for free (advertising) will equate to any great extent with product information consumers’ actually desire. In fact, a better rule of thumb would be that advertising is that ‘information’ that consumers would not be willing to purchase of their own accord. If consumers were willing to buy advertising, why would it be given away for free? Indeed, it might be better to think of consumers being paid with content for the cost of enduring advertising.

Information Ain’t Information

Then the scholarship makes a distinction. There’s ‘informative’ advertising and there’s ‘persuasive’ advertising. From Doyle again:

“The second function – persuasion – is more questionable in terms of its impact on consumer welfare… Not surprisingly, many who work in the advertising industry take the view that advertising helps people to make choices in an over-supplied world. But if the information provided is not objective, then the choices it engenders may not be good ones and the effect of advertising will be to diminish rather than to enhance the overall welfare or utility of consumers.” (Doyle 2002: 44)

Firstly, the distinction between informative advertising (advertising that relates to the optimal way a consumer can satisfy a pre-existing desire) and persuasive advertising (advertising that seeks to persuade consumers to adopt a new desire). It is best to think of this distinction as one of degree rather than kind. That is because even advertising that is more informative in nature has an agenda-setting role. It may be that an ad focuses exclusively on the low price and high efficacy of the washing detergent. But it can by no means be taken for granted that consumers were that interested. It may be the case that, if left to pay for product information, consumers would not purchase the information about price and quality of washing detergent because they have more urgent priorities which they wish to devote their scarce resources to. So, even advertising that is more informative in nature has a persuasive function in as much as it may bump the product (and its alleged virtues) up the agenda in a cut-throat attention economy.

The second problem with the critique of persuasive advertising, as described by Doyle, is the standpoint it operates from. On this account, persuasive advertising is bad because it is not objective. But objectivity is not the issue. Utility is the issue. Firstly, there’s every possibility that consumers will disagree with producers (and each other) about what counts as objective information. The arbiter, in a market economy, should be the consumer of the product information. Secondly, no amount of objectivity will overcome the need to be selective. The ad that delivers straight-up info on price may have excluded information about the company’s environmental practices. Somebody has to make judgments about questions of perspective, focus and salience. At issue is who is the ultimate arbiter – an advertiser or the consumer of product information. Thirdly, some of us some of the time may well, quite legitimately, desire product information that is not in any clear sense ‘ objective’. Objectivity is a criterion that we will often employ in determining whether product information has any value to us and therefore whether we’ll buy it. But the ultimate issue is whether the information has utility for the consumer and not the grounds on which that utility is accorded.

Paying for News

April 10, 2012

Fascinating episode of Media Watch on the future of news last night – Paying for News.

The Oz Puts Up Its Paywall

October 24, 2011

The Australian’s golden tickets: paywall comes down on ‘new era’, Jason Whittaker, Crikey, 24 October 2011

Paywalls: the good news and the gamble, Peter Clarke interviews Gordon Crovitz, Sophie Black and Jason Wilson, Inside Story, 2 November 2011

A Submission to the Media Inquiry, Eric Beecher, The Drum, ABC, 8 November 2011

Without balance that paywall will not stand, Tim Dunlop, The Drum, ABC, 27 October 2011

Hold your nose and support the coming media paywalls, Tim Dunlop, The Drum, ABC, 20 October 2011

Journalism’s Bold Future, Richard Stanton, The Drum, ABC, 21 October 2011

Media inquiry motives: accountability or revenge?, Chris Berg, The Drum, ABC, 6 November 2011

Fairfax chief slams News Ltd over Mark Day splash

Two Great Articles on the Future of News

October 24, 2011

An audience, an audience, my kingdom for an audience, The Drum, ABC, Annabel Crabb, October 19, 2011

How the internet messes with the game of media and party politics, Bernard Keane, Crikey, 24 October 2011

Facebook’s New Tools

October 6, 2011

E.B. Boyd at Fast Company explains Facebook’s new metrics and advertising services, designed to exploit the power of word-of-mouth. Of particular interest is its premium ad service that extends the Sponsored Stories concept introduced earlier in the year.

Facebook is also today releasing a new premium ad unit that allows brands to turn their posts into ads. If the ad is put in front of a user who has a friend who is a fan of the brand, the ad will include that information in the ad (pictured at the top of the image, right)–thus, Facebook says, “combining the brand’s voice in the ad with a friend’s voice.