Information Is Free but Only Because Advertisers Pay: Ezra Klein
For much of the 19th century, newspapers were financed by political parties. It was a transparent, transactional relationship: The newspaper would officially partner with a political party, and in return they received direct infusions of cash, customers and even news.
The cash would come from the party’s budget, the customers from the party’s base and the news from the party’s politicians. In return, the party had total control over what the newspaper did and didn’t publish.
Yet by the end of the 20th century, there were hardly any party-affiliated newspapers left. Many people assume that this was a triumph of journalistic ethics over partisan politics. But in a paper published in the November 2011 edition of the American Political Science Review, Maria Petrova suggests that the real story is less inspiring.
“Newspapers’ independence was positively related to the local profitability of advertising,” she writes. “In the areas with faster-growing advertising markets, newspapers were more likely to be independent. The effect of advertising worked both through the entry of new newspapers and through changes in the affiliation of existing newspapers.”
In other words, the news found a more lucrative patron than political parties: advertisers. This business model, though, required a different news model. “If the profitability of advertising is high, then it is costly for media outlets to distort their news coverage in the direction desired by a subsidizing group,” Petrova writes. “Any deviation from the coverage that maximizes audience means the loss of audience and the loss of corresponding advertising revenues.”
Strategy Had Changed
That was, in many ways, a good thing. The “objective” newspaper was certainly preferable to the propaganda outlets that preceded it. But objectivity wasn’t just about the news. It was also about keeping audiences large and advertisers happy. It was part of a business strategy. That meant it could often induce a kind of studied inoffensiveness, an unwillingness to speak truths that audiences didn’t want to hear. Still, the post-advertising newspapers were trustworthy, independent sources of information. Before moving to the advertising model, they weren’t.
Nor is the news the only form of mass information that appears free while actually supporting itself through advertising. One of the most mind-bending facts of our information culture is that almost every major medium of information supports itself by advertising.
Radio? Advertisers. Magazines? Advertisers. Television? Advertisers. Google? Advertisers. Facebook? Advertisers. Twitter? Advertisers. Perhaps the only major exceptions to this rule are books, which are supported by sales, and Wikipedia, which is supported largely through donations.
From an economic standpoint, most information is simply a vehicle for advertising. We see the advertising as a distraction. But so far as the media company’s bottom line goes, the advertising is the point. Without the advertising, the information wouldn’t exist. So the history of information, in the U.S. at least, is the history of platforms that could support advertising.
That doesn’t make advertising evil, or platforms that rely on it untrustworthy. In important ways, advertisers are the ideal sponsors for information. There are many of them, so no individual advertiser wields total power. They are, themselves, trying to convey information that consumers often find useful. And their interests are sufficiently narrow that it’s rare for the information they’re sponsoring to truly pose a problem for them -- Macy’s, for instance, has few opinions on defense policy.
Consumers Want Free
They blend into the background so well that we can occasionally forget that they are there. Technology optimists like to say that “information wants to be free.” Perhaps the truer way to put it is that consumers want information to be free. And advertising makes it look free. But being free and looking free are not the same thing. In fact, they can be even more different than being free and being expensive, because at least in that comparison, the difference is obvious and easy to evaluate.
This is truer on the Internet than it ever was in newspapers or on television. At least with newspapers and television, the advertising was directly in front of you, and your interaction with it was straightforward. In the case of newspapers and, later, cable television, you were paying something -- you knew the information wasn’t free.
Online, you not only are exposed to advertisements, but the data on what you search, where you go and what you do is fed to advertisers so they can better target their appeals. You’re often paying nothing for the experience, at work or in a cafe. As the information appears ever more free, the hidden costs are growing correspondingly greater.
The point of this column is not to warn against the dangers of advertising. It’s that our informational commons, or what we think of as our informational commons, is, for the most part, built atop a latticework of advertising platforms. In that way, it’s possible that no single industry -- not newspapers or search engines or anything else -- has done as much to advance the storehouse of accessible human knowledge in the 20th century as advertisers. They didn’t do it because they are philanthropists, and they didn’t do it because they love information. But they did it nevertheless.
(Ezra Klein is a Bloomberg View columnist. The opinions expressed are his own.)
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