Fake news is a problem that doesn't look like it's going away anytime soon. It's fascinating to witness the war between Donald Trump and the mass media, especially CNN. The rare press conferences he hosts truly are entertaining to watch if you're stuck on the throne longer than normal one morning.
To understand fake news, we must understand the cast of characters:
1) The Creators
2) The Enablers
3) The Establishment
Let's discuss each one of them in more detail. I'll also touch upon how money is made.
The Creators Of Fake News
There are two main creators of fake news. The most egregious creator comes from non-journalists who put out spammy garbage you see on the web that's simply untrue. The second creator of fake news is not so much fake news, but biased news coming from journalists with an agenda. Biased news isn't as egregious since we all have our biases that are hard to extricate from our actions. However, biased journalists can do greater damage due to their large platforms.
With the use of clickbait titles, misinformation, and satire, fake news has the ability to affect public opinion about a person, country or issue. Here are some of the more outrageous fake news examples.
Why does fake news exist? Is it because people have nothing better to do with their time? Or maybe it's because people are all serious trolls on the internet? Maybe.
The main reason why fake news exists is simply due to the desire for MONEY, lots of it! Once you follow the money, everything becomes much clearer.
The #1 goal of every fake news creator is to get as many impressionable readers to click on their fake news articles as possible. More clicks means more advertising revenue.
Clickbait titles are very important because fake news creators cannot compete on substance. None of their articles will ever rank well on search (Google, Bing, Duckduckgo, etc) because most of their content is very thin and filled with grammatical errors on topics that are very ephemeral e.g. Southern California Floods Sweep Away Neverland Ranch, Revealing Michael Jackson Is Still Alive!
The average fake news article might contain 250 words of gibberish, whereas the average article on Financial Samurai tends to be more evergreen with well over 1,200 words, complemented with charts and graphs. Due to the way search engines work, a fake news article would unlikely ever rank above an article I write about on the same topic. If it did, the search engine would be discredited and eventually lose a ton of money themselves.
Fake news creators are paid generally in the range of $1 – $10 per 1,000 impressions. Therefore, if a fake news creator can get 1,000,000 impressions a month, his website stands to earn $1,000 – $10,000 a month. If you're a fake news teen earning $10,000 a month living in Macedonia, you're crushing it because the Macedonia GDP per capita is less than $5,000. That's like making $960,000 a year here in the U.S.!
To provide some perspective, only about 5% of Financial Samurai's total revenue comes from click ads and banner ads compared to 100% of revenue for fake news sites. My business model is about creating direct long-term partnerships with companies I believe will create value for everyone.
The Enablers Of Fake News
So how do spammy garbage sites exist on the web if they can't rank well in search?
The first reason is due to low barriers to entry. Anybody can start a website for less than $50 a year nowadays and compete with the Yahoos, the Forbes, The New York Times, and the Googles of the world. WordPress and other platforms make it easy to create good looking sites that used to cost tens of thousands to create. Chances of creating a reputable website off of fake news are low, but so is the opportunity cost.
Before I started Financial Samurai, I clearly remember thinking it would be relatively easy to create a reputable personal finance site because I was reading so much garbage on the web by authors who had minimal to no financial background or experience.
Circa 2008 there was a NYT bestseller by Ramit Sethi called, “I Will Teach You To Be Rich,” at Barnes & Noble by a recent college grad with no job. I thought to myself, America is awesome because anything is possible! What I've learned since meeting Ramit, who readily admits the book's title is spammy, is that it's all about marketing.
The second reason why fake news exists is due to the enablers. More specifically: Facebook.
Facebook has almost two billion mindless users each day who waste about an hour of their lives on their platform. Facebook is the largest, most engaged social media platform in the world. Fake news creators know that people who spend lots of time on Facebook are often lonely, highly impressionable people who are looking for validation and a way out of their misery. Since misery loves company, negative fake news does very well.
Why does Facebook enable so much garbage in everybody's news feed? Money, money, and more MONEY! Facebook spent years trying to convince companies to build likes on their Facebook page. The assumption was, the more likes your company page has, the more easily you can “organically” reach your target consumer.
Then Facebook changed the rules after companies spent billions of dollars trying to get consumers to like their pages. They told companies they now had to also pay to get the people who liked their pages to see what they posted! Talk about luring your customers in and beating them with a stick.
Facebook is currently worth roughly $470 billion in 2020 because they earn over $40 billion in advertising revenue a year. Some have estimated Facebook earns roughly half of their revenue from fake news advertising.
But let's say they earn just 10% of their revenue from fake news. That's still $4 billion in revenue Facebook doesn't want to lose, especially since Zuckerberg is worth ~$60B alone.
Online Marketing 101
From the fake news creator's perspective, if he can spend $1 on advertising to make $1.10 in advertising revenue off a bogus article, he'll do it all day long until marginal cost exceeds marginal revenue. If you are a skilled fake news creator, sometimes you can spend $1 to make $2 in revenue, which is an absolute goldmine until arbitrage whittles away all profits.
Paying for clicks is what paid marketing is all about. Based on my experience consulting for various marketing departments who regularly spent $50,000 – $200,000 a month on online marketing, Facebook has the highest return on investment in paid marketing, much more so than Google Adwords, LinkedIn, and Twitter.
The reason? Facebook knows more about you than every other platform because you're spending the most amount of time clicking and sharing on their platform. They track all your behavior and know everything you like and do. Therefore, an advertiser can target their ideal consumer much more granularly e.g. a get rich quick scammer can target an insecure guy in massive credit card debt who constantly posts selfies of himself with things he cannot afford.
Why Not Just Prohibit Fake News?
I've spoken to many engineers at Facebook, LinkedIn, Twitter, and Google about how easy it is to stop fake news from running on their platforms, and they all said it is very easy to do. All Facebook has to do is create a new screening algorithm and employ a team to randomly vet the output of these algorithms before articles are advertised on other people's news feeds. Sure, they won't catch all fake news, because “good” fake news almost seems like real news, but they'll certainly reduce the number of fake news articles on their platform.
Ask yourself why there is no fake news on your LinkedIn feed compared to all the garbage on Facebook. The first reason is because LinkedIn doesn't allow fake news. The second reason is because LinkedIn's members won't stand for fake news. They'll actively report a fake news article and ruin the reputation of the fake news creator/poster. In other words, the quality of users is quite different.
Don't think for one second a company with over $30 billion in revenues can't do more to squash fake news on their platform. Even if you are worth millions or multi-billions, the desire for more money is often too strong to allow a person to do the right thing.
If you are worth $55 billion, why is there a single person in poverty within your community? If you can earn $140 million a year in risk-free income without touching principal, why would you sue the indigenous people of Kauai out of their lands when you already bought 700 acres?
Remember: no matter how hard Golem tries, he cannot escape the power of the ring. This is why the ungodly rich continue to hoard and obsess over how to make even more money.
The Establishment Of Fake News
The Establishment refers to traditional media, which consists mostly of unbiased journalists who simply want to report the truth (veritas). I've met plenty of journalists and reporters since I started Financial Samurai in 2009, and every one of them has been great, that is until Gawker and Buzzfeed came along.
Traditional journalists aren't paid much so there's really no incentive for them to report fake, misleading, biased, or sensationalist news. If they did, they'd probably get fired or at least have to write an embarrassing retraction that would blight their careers.
But something happened more than a decade ago. CNN stopped simply reporting the news and started going the “superstar model” where they created media personalities out of anointed journalists. Once this started, every other major news station followed suit because consumers love to read, watch, and listen to what they already believe in. To become a personality, you need a view. And that is how big media bias began.
With the superstar model paying people like Bill O'Reilly and Megyn Kelly $15M – $20M a year, journalists suddenly found it OK to push their agendas. The mandate comes from the top; the CEOs' main purpose is to drive viewership and generate revenue at all costs – the more outrageous, biased, and bombastic, the better. The Establishment was getting crushed by online media, including bloggers who were taking tremendous market share. The push for biased news has everything to do with money.
Example Of Bias By Traditional Media
As a personal finance blogger, I'm consistently surprised that real estate journalists seldom discuss rising income and increased employment as key reasons why home prices and rents have increased. It's as if they believe real estate prices just rise due to magic. But as finance people understand, the value of anything is largely predicated on the demand for the asset and the income each asset produces.
Instead of focusing on fundamentals, biased real estate reporters focus on how unaffordable so and so city is, how greedy existing homeowners and developers are, and how there should be more subsidized housing paid for by the very people who pay the most taxes. They cherry pick an expensive property and then extrapolate how unaffordable it is for median income earning citizens. Their reports are totally misleading.
You and I know the United States has some of the cheapest real estate in the world. Yet, when I show reporters this latest chart about how U.S. property is inexpensive on a price-to-income ratio, they refuse to acknowledge.
Inevitably, every single reporter who is negatively biased towards real estate is a renter. They've let their desire for affordable housing (based on their income), cloud their judgment to the detriment of their readers. Not owning real estate over the long term is one of the biggest reasons for the widening wealth gap.
If you missed out on the 220%+ S&P 500 run since 2009 by holding 100% cash, you're probably feeling foolish as a stock market reporter. Even though you might be incredulous or simply jealous of other people for making a small fortune, it's much harder to be a biased stock market reporter because there's not much you can manipulate in your article. The Dow Jones is above 20,000 for now. The S&P 500 is at a record high. Prices are as clear as day with the stock market.
If the countries in the real estate chart above were simply the respective countries' main stock market indices, there's no way a journalist would argue that the S&P 500 doesn't look undervalued compared to the NZX 50 (New Zealand) and every other country in the chart. Now it's obvious as an investor that I should be looking to invest in the heartland of America where valuations are cheaper, rental yields are higher, and the Trump administration has promised to focus on bringing jobs back to the region. But of course, the establishment won't report on this due to their bias. That's fine for savvy people who know what's up because we can invest way ahead of the mainstream media.
CNN Is Biased Media
It's becoming very clear that CNN is completely biased against Trump and unable to just present the facts. They have made it their agenda to take down the President of The United States with examples such as:
1) Supporting Kathy Griffin after she posted a ISIS-like beheading of Donald Trump is absolutely disgusting. What type of media organization condones murder and the terrorists who threaten our very freedom? An organization with an agenda. Only after intense outrage from the American people did CNN decide to fire her from co-hosting CNN's annual New Year's Eve program alongside Anderson Cooper where she's been working since 2007. The hashtag #CNNisISIS followed.
2) Threatening to expose the anonymous Redditor who posted a short video of Donald Trump wrestling against an opponent with the CNN logo superimposed. Through intimidation, they got the Redditor to admit he was wrong for exercising his freedom of speech. This is absolutely unacceptable. #CNNBlackMail
3) Three CNN reporters resigned after not following standard editorial protocol on a story, which reported that Congress was investigating a “Russian investment fund with ties to Trump officials,” cited a single anonymous source. The network couldn't report the news on TV because the article, which has since been retracted was a hatchet job and a hit job to once again try and undermine the President.
There are plenty more examples of CNN not doing the right thing and the American people have clearly woken up to the fact CNN is fake news.
Always Think For Yourself
You might love Financial Samurai because you think like me. I'm totally biased in believing there's a high correlation between effort and reward. I also believe everything can be explained with logic to the frustration of many. For example, if you want something bad enough, you're going to do everything possible to get it. If not, then you simply don't want it bad enough. The problem with liking Financial Samurai due to our similar philosophies is that we end up with group think.
Therefore, the key to learning is to understand our own biases and consume with an open mind. I've tried hard to frequently write from a different perspective to make sure we're not missing anything. More often than not, there's some new revelation that helps us become better financial freedom seekers.
Fake news is all about taking advantage of impressionable people in order to make more money. Thank goodness I'm not in the business of reporting the news because that is a never ending grind. But thank goodness there is fake news because it allows media people who build a brand based on substance get ahead in the long run.
Key Points To Review
1) Facebook is the #1 culprit of fake news because they enable the creators to disseminate their crap on their platform with almost 2 billion unique users a day. No other traditional media platform comes close to Facebook's reach. Frequent users on Facebook are younger and more impressionable, which is why Facebook is so much more profitable. Little to no fake news exists on LinkedIn because it's not allowed.
Zuckerberg has been under intense scrutiny and criticism after revealing that Facebook found nearly 500 accounts with Russian origins that spent upwards of $100,000 on fake ads before and after the 2016 election. The platform had denied for the previous eight months that they knew of any Russia-linked fake news being perpetuated on the site.
2) Google, the dominant online ad earner, is not seen as a major culprit of fake news because if Google allows fake news to rank well in their search results, Google will ruin their brand, hurt their search traffic, and ultimately hurt their valuation. They are currently getting heat due to bad advertising with YouTube.
3) The creators of fake news come from all over the world due to low barriers to entry. Geoarbitrage makes earning money online from a poorer country much more attractive. If all you have to do is make $417 a month in Macedonia ($5,000 per capita GDP) to replicate the $4,416 purchasing power a month in the United States ($53,000 per capita GDP), you'll absolutely be drawn to the fake news business. Fake news headlines need to stir emotion, usually the negative kind that makes you rage.
4) Fake news is a get rich quick scheme. Unless you’ve built a reputation based on satire, like The Onion, you cannot build a reputable website off of fake news. There's a huge army of freelance writers who pump out crap to see what sticks. With cheap and frequent advertising tests on Facebook, fake news creators can fine tune a profitable ad campaign until marginal cost equals marginal revenue.
5) Journalists have their biases. Traditional journalists are predominantly honest people who are just trying to report the facts, unless they've been given editorial opinion. We should recognize the journalist's biases by understanding his or her personal background and reporting history. Further, we should recognize the inherent bias that comes from the very top of every news organization. The country is divided, so of course there is a war between the media and the president.
I started this post highlighting three cast of characters to blame for fake news. But there's a fourth character, which is the consumer. We are fools if we don't spend time thinking for ourselves. Fake news exists because it preys on our own ignorance and biases. Until we wise up, fake news will never stop because it's far too lucrative of a business.
Recommendation: If you want to watch a great documentary on fake news, I highly recommend watching Hoaxed, by Mike Cernovich on iTunes or Amazon. Mike has been on the front lines, breaking stories and pointing out misinformation by the media, by politicians, pedophiles, and other unscrupulous characters for years.
Regards,
Sam
Fake news has always existed. The media asked President Reagan if they could consolidate the press agencies into one and he said no “if there would be one news agency they could say whatever they wanted.”
When Bill Clinton was elected, the news people saw their chance because Slick Willy (Bill Clinton) had dirt all over his face and Bill Clinton saw a chance that the press could cover or cover up his scandalous affairs…. so in 1996 February…the communications act was passed allowing the agencies to form 6 groups…which meant about 80% of the news people…so this is why the media hates Trump and Republicans because they are paid by the likes of wealthy sick people to destroy the USA…
Trump have gotten to the nerve of Fake News CNN/MSN/MSNBC that eventhough Trump was ousted thru the rigged election and cheating still the fake news media wasting thier whole time on Trump rather than exposing the incompetency of the declared Presidential winner Biden
Genuinely enjoyed this article. Had to scroll down through at least a page or two of Google results before finding an article that clearly had a realistic title and that appeared reputable at least on the surface. Was not disappointed. Really appreciate the pointed insight.
The two Wall Street Journal headlines actually has to do with the time each one was printed. The results/backlash changed during the day with new facts and news.
“Colleen Schwartz, the Vice President of Communications at The Wall Street Journal, confirmed that these editions were printed at different times, not in different markets. The edition on the left was published after Trump met with Mexican president Enrique Peña Nieto early in the day (and referenced the seemingly cooperative tone of their discussion), and the edition on the right was published after Trump delivered a speech on immigration later in the day (and referenced Trump’s reasserting his stance that he would force Mexico to pay for the building of a wall along the U.S.-Mexico border):” see https://www.snopes.com/wsj-different-trump-headlines/
Media literacy is very low in our country, but it does not have to be. Many people prefer to be in silos of information and thought.
Great post, I would just point out housing stats like that are not the most usable. Really you need to break it down per metro region / state to really dig into the drivers across countries. The USA has a ton of cheap housing pulling that down.
Also, in Europe their market is totally different. In germany for example most people rent because houses don’t appreciate. Very very different focus as a country on housing, were as in the USA everyone is told to buy a house. Another interesting one to read on is Japan, there they build new houses everytime so building is really cheap and it is the land that cost money.
With even the reputable news agencies being labelled as fake news I wonder if this is ushering in a new era where people feel they can only trust what the government says.
I believe this type of environment really helps Fox news since they are aligned with the current administration. Therefore people will believe the government’s “facts” since Fox will always report the same conclusions.
I personally read multiple versions of the same story so I can formulate my own conclusions.
Great summary and insights into the motivation behind “fake news”. I signed off Facebook for the last time several years ago. I found it to be a complete waste of time and was tired of reading mindless updates about what friends were eating or what political views family members were pushing to the masses. I’ve also greatly reduced the amount of time I spend reading CNN or similar “cable” news platforms for the very reasons you mentioned.
I do read the WSJ daily as I find the articles, excluding the opinion section, to be fairly straight forward and about as unbiased as you can get, although their editors also have their moments as you showed with multiple headlines for the same story based on region.
While I feel strongly that keeping up with news and global affairs is important, I tend to be happier and more productive when I don’t let it take over my day. I’d much rather focus on my family and how I can help improve my community.
Having said all that, it scares me that our president is trying to undermine the mass media to the benefit of his own agenda. If history tells us anything, this isn’t a positive development.
I completely agree with your last point.
It’s not to “the benefit of his own agenda”.
If people wake up to the fact that a lot of media is fake, it’s to the benefit of our entire country.
Thanks for the article. If Facebook is charging companies I like to post, then I’ll totally stop using FB. What FB is doing seems like extortion. I want companies I like to be profitable and not used by FB.
I think your analysis is spot-on, but I think fake-news is self-limiting. (Or maybe we just haven’t reached peak-fake yet.) After you bite on a certain number of click-bait links, you realize its just rick-rolling. No matter HOW enticing the news tease is, it’s just a thief of time.
As soon as I recognize the hallmarks of certain syndication vendors, I avoid them like the plague.
The dispute between Trump and the media is based on a real split in the ruling class.
On the one side is Trump who represents the financial aristocracy which has risen to dominance since the 1970’s through speculation, bubbles and “investment” in a market that is nothing more than gambling and has no connection to actual profit creation. This faction has no ties to the productive economy and is not satisfied with the “new normal” 1.7% annual growth rate in the US from 2008 to the present (as opposed to an average 3% from 1777-2008). It seeks a return to a suitable rate of profit of 3% annually by mass cuts in social services, mass deportations, tariffs, trade wars, and quite possibly the type of destructive war that paved the way for the “golden age” of America by way of the martial plan. It sees its main enemies as China and Germany.
On the other side lies the traditional sections of the capitalist class tied to production and its allies in the intelligence community. The media has long ties to the intelligence agencies. That’s where the agit-prop they create gets distributed to the rest of the population. This group has adapted to the new normal rare of profit but seeks to keep the economy afloat with traditional production and accumulation often by outright imperialism as an in Iraq and Afghanistan. This section thus sees its main enemy as Russia as an obstacle to its dominance of the middle east and Russia. It fully backed Clinton in the election and rages against Trump today, not based on his anti-humanist policies but his failure to be aggressive against nuclear armed Russia.
Normal, hard working people and the poor have no dog in this race as both camps promise nothing more than austerity and war. Parasitic investors and profiteers might have a side to support however, and I’m afraid some of them can be found on sites like this.
No doubt. I readily admit to always trying to look for arbitrage opportunity in peculiar situations. It’s the investor in me. This is a personal finance site, after all. We’re not misleading the public to profit. We’re looking for kinked situations that already exist.
See:
Focus On Trends: Why I’m Investing In The Heartland Of America
Make Millions With Arbitrage Opportunities
Sharks are drawn to blood.
It’s easy to pretend to have clean hands when one denies the origins of profit. Profit is a portion of the product of labor taken from those who produce it. A worker assembles $15000 in furniture but is paid only $50. The remaining 14950, minus cost of materials and wear and tear, is profit. It’s that simple.
All speculation, arbitrage, interest, futures, etc., is simply a claim on this profit.
Because ultimately someone has to produce something as that is the basis for human society. Moving money around, fudging numbers and usury simply cannot produce new value.
Who produces and how is the question. In our case it is mainly ravaged women and children in sweatshops who make everything from clothes to computer and car parts.
With the rise of financialization there are now too many claims on the product of labor. Stocks sell for 5 times what the companies produce. When there are too many parasites feeding at once the host body dies. That’s what we are witnessing now.
Last year saw the lowest increase in global trade growth since the financial crisis of 2008–2009, according to a report issued by the World Bank on Tuesday. It was the fifth consecutive year that international trade growth has slowed.
The report said current estimates for the growth in trade in goods and services ranged from 1.9 percent to 2.5 percent but preliminary data suggested that the growth in merchandise trade volumes had increased by only 1 percent. Last year was different from all the other post-crisis years “in that trade sluggishness is a characteristic of both advanced and emerging economies.”
Hello Sam,
The mainstream media pushed the “fake news” label during the election to discredit alternative news sources, not obvious fake news peddlers. Trump flipped that narrative by labeling them fake news, especially CNN due to the biased coverage. Facebook is not interested in stopping the ad revenue from truly fake news. However, the genuine alternative media sites are facing bans, targeted attacks on their ad revenue, and censorship. Twitter bans, Facebook bans, account freezes, and the like are being used to shut down free speech under the guise of fake news. Like you said, FB could shut it down in a day, but that was never the agenda. It is to stifle dissent and shut down the competition. I am going to post this article link to Gab (Twitter alternative). Many people there will enjoy it. New here and I would like to commend you on a great website.
I think this post hits it on the nose. I deactivated my FB account this year because they’re seeming lack of interest in filtering fake news, and how overall depressing everything coming from that medium was. And while I could technically filter those posts from my feed, they could never catch them all. 2 month’s free and I’m much better for it. I’ve reconnected (in person) with people who actually matter in my life. So rather than giving a “like” as a means to stay connected, I set up a time to meet and catch up. Ultimately, fake news will never go away because the fake news consumer will always be there, and sadly it’s growing. I attribute that more to education (or lack of). But with the lack of interest in current governing entities to improve education I only see this getting worse, not better, in the future.
I always assumed that fake news was simply a way for the media to express their biases. I did not realize there was such a large profit motive behind it. Very informative article! I learned something today.
I stopped using Facebook. It being no value to my life. I’ve worked in news recommendation systems at companies for a while now and I have a good understanding on how the new feed works at Facebook. Each new recommender has a different formula. I can tell you that, in general, the popularity of articles follows what’s called a poet law distribution. The number of most viewed articles follows an exponentially decreasing function where the most viewed article is twice as popular as the 2nd most and so on. This tells you that you have a rather manageable magnitude of articles to sift through for approval purposes. They could totally filter out the most popular fake news articles but they would never catch everything. It’s really not even required to do that anyways. Zucker is a bullshitter.
Very interesting and on point Sam. The wide range of topic you write about is the reason I keep coming back to your website a few times a week.
Facebook – though have its flaws (many major ones), is also very useful as a communication tool. 20 years ago, there were no easy way to reach a large groups of people whether the goal is to set up a party, or solicit donation for a charity. The benefit far outweighs the negatives in having to deal with spam and fake news. In many ways, it’s reminiscent of the heyday in television where we were forced fed commercials that are sometimes of no relevance, misleading or outright false advertising.
At some point it would be inevitable that an organization or group would have to be involved to weed out the spread of false information and misleading click-bate titles. Hopefully the organization is more similar to Yelp in the review of restaurants or other services where the community rank and rate the reliability of the source, instead of a government organization similar to the FCC, where it will straddle a fine line between betterment for the general public and free speech.
I agree to a point. It’s a great communication tool WITHIN your network. But outside of your network, the anonymity of being able to communicate with people who don’t share the same views rarely leads to any “mutual” understanding. It typically results in internet trolls going back in forth with the random commentor chiming in with cheap shots one way or the other.
I, for one, don’t believe the benefits outweigh the flaws for the same reason you mention as positives. Soliciting for a charity, or organizing groups for something like a protest preys on the same disassociated people who end up participating because they need to “belong” to something. Again, planning meetups group communication is great, but within your network. Any use beyond that and I think that FB user is trying to fill a void in their life or get validation (likes) because of their insecurities.
Trolls can be easily managed. You can change the security settings so that only your friends can see and comment on posts you make, and you certain can choose who you are “friends” with on Facebook.
The fake news on the other hand are sponsored pages that I cannot weed out, since that is the revenue source of Facebook. But it’s a “free” service, so I suppose the alternative is to deactivate my account if I no longer find the platform useful.
I completely understand that functionality is available to me and getting into a “troll war” isn’t something I participate in. But I would guess I’m not in the majority of those who are more active FB users. Hence, why I deactivated my account. Well, that and even the posts from my friends would start to be political in nature, which spurns “engagement” and bumps the post in my feed. Have you never wondered why “recent posts” is such a chore to dig through settings? My guess is FB is trying to get you to engage in something that channels revisiting the site vs. providing you newest information, which may or may not prompt engagement.
I can certainly start to block friends and their posts when they get highly politicized. But like everything viral, it could prompt a reply by another friend which would bring it back to my feed, therefore requiring me to now block them. At some point, it’s just more headache than it’s worth. It’s not like anyone there is posting great FS information, right?
Another great reason to have nothing to do with Facebook. I don’t have an account, and hopefully never will.
Another super post Sam!
Critical thinking is in short supply these days.
Having a discerning mind of your own is a absolute freedom.
Kinda makes me recall fake posts on blogs to attract attention. Fortunately there are still some good ones, like Samurai. Great post.
Mainstrean media in this country is a part of the fake news establishment . You mention that traditional journalists are honest peoople trying their best to report the facts; I beg to differ. Journalism in this country has never really been honest and the mass media functions as an arm of either the Pentagon and whatever war it wants to prevent or sell at the time, or is whatever corporate America wants to promote. The myth of honest or free media needs to debunked. Main stream media is not honest and or free. The biggest lies are sold through th4 mass media and we eat it all up.
I think your perspective will soften on traditional journalists if you spend more time with them. But since they have their biases and are competing against new media, they’ve got to adapt. It’s really the EDITORS who edit and approve the final copy that goes out. And of course, they are taking orders from the business folks upstairs.
Either way, we tend to want to read what we like and want to believe. So, we can’t be pissed off or annoyed when some other organization thinks otherwise.
I have been searching for truthful and fact based articles on “fake news”, “media manipulation”, not really about financial, more about political bias. I was hopeful when I started reading, agree and understand the bias for financial gain with the likes of FaceBook, and that CNN is most certainly biased. WHAT ABOUT FOX news???? Super disappointed, yet again, to see their is another article about fake news, only covering one side of the bias. Good grief – Fox News is full of lies, right? Oh well.
I think you completely missed the point of fake news. It’s all a giant conspiracy by big business to control the way the American people act and vote. Just kidding.
I can’t believe all this fake news is such a big deal. I tend to ignore ridiculous headlines, especially when they come from websites I’ve never heard of. Apparently most Americans don’t do the same, and they really do believe everything they read.
Fake news taking over everyone’s Facebook feed has gotten annoying. I don’t use that social media channel to catch up on news (thank goodness), but other channels (LinkedIn, Twitter, etc.) could easily go that way too… if the money is there. It makes sense, but it’s too bad. I find it hard to believe Facebook can’t filter…
I’m not sure I’d _want_ someone like Facebook to be cracking down on what they consider to be fake news or biased news. That leans a little too close to censorship for my comfort. A thing like that might start with the best of intentions, but how is one to know if the parameters chosen to filter out content are truly free of bias? It is a slippery slope.
Our best bet is ourselves – just enough skepticism and cynicism to prevent one from swallowing whole any old thing that is served up on a platter.
By the way, the WSJ picture you posted was more disturbing to me than most of the obviously fake/prejudiced/click bait-ey stuff out there. That was a pretty insidious way to subtly influence a reader to receive an article based on already existing bias.
Sam, you are so right about how you need to think for yourself and, more importantly, be aware of your own biases. Charlie Munger writes about this a lot – he is well worth a read on this. As you say, everyone has natural biases but it is important to be aware of these so you can test them and challenge them. This is how truly great thinkers can be so rational which can help enormously in the long run.
Hi Sam,
As an active user of Facebook as an additional arm of my blog, this was a fascinating read. I still utilize it because many of my (few) readers will happily use Facebook to follow my activity and wouldn’t dream of subscribing.
A fellow cop blogger and I formed a network of law enforcement blogs and created a Facebook page to allow us to share exposure to each other’s network. It has been effective, but as an admin on the page I get to see when the other contributors purchase additional exposure from Facebook.
It is fascinating to see the exposure jump from hundreds to thousands in exchange for 5 dollars. Despite the dramatic spike, the traffic normally falls away back to he hundreds swiftly lnce the purchased exposure runs out. I’m no specialist, but I’m not seeing nearly as much growth as solid performance and search ranking causes.
As for the proliferation of fake news: people love their alcohol, tobacco, and methamphetamine. Of course we click the click bait! Just because it’s not good for us doesn’t mean most people can help themselves. Click-zombies. The end times are upon us.
I’ve stopped watching news ever since the presenters started standing around with an IPAD and talking among themselves about some celebrity’s two bit scandal and reading twitter comments. I want facts and reports on local and state matters not an opinion piece (unless I’m watching a round table discussion with experts discussing different viewpoints). Sadly, I’ve reduced my news to only the local free community paper (that reports on local matters) and a few reputable online sources.
Thanks for the money breakdown Sam. I blame the boom of fake news on the quality of people these days. They are perpetual victims of something or the other and insufferable gossips. Once these people broaden their worldly perspectives, fake news will no longer be popular. But in the meantime it’s terribly annoying. I mean whatever happened to “the truth shall set you free”?
And you can forget polite, rational discussion, exploring other viewpoints”/perspectives, etc., it’s all about “I’m entitled to my opinion, and it’s right even though there’s facts out there that say I’m wrong.”
As an old-school print and tv journalist, we were taught to always have at least two sources on any story. “Deep Throat” and the Wash. Post aside, two sources made the journalist accountable and was the either the green or red light for a story.
Journalists were never allowed to state an opinion – ever. Your editor would come down hard on you.
The idea was that opinions were only to come from the sources. Journalists stayed objective. One of the time-honored ways to help facilitate that was never to ask a question that would elicit a simple yes-or-no answer.
So, you never asked “Did you feel bad when the factory shut down?” because someone could simply say yes or no…and that would also be considered a leading question. The technique was to ask, “How did you feel when that happened?”. Instead of saying “will you sue them because the factory came down?” (leading) or “are you going to do anything about it? (the yes/no answer problem), you asked, “How will you handle this now?
Today, it’s much harder to filter the news and the bias.
I immediately ignore any story that claims “sources say” or “anonymous/unnamed sources say” and when I see a tv journalist, for example, nodding in agreement and helping a source along with leading questions, I cringe. It means we’re being manipulated.
That goes for partisan “journalists” such as George Stephanopoulos who worked so closely, and at such a high level, in one political party. For me, that crosses the line.
As for CNN, in its heyday of the 1980s, Ted Turner pioneered at least three things:
he changed the traditional label of the “foreign desk” to the “international desk”; he opened up the newsroom to the viewing public which was a change from the big wall that was usually seen behind the news reader/anchor; and he made the news the star, not the anchor, which was also a change from the Walter Cronkites and Huntley-Brinkley days. Bobbi Battista on CNN was a superstar – she had so many fans – but her name was never on the screen. I liked it better that way.
Ironically, CNN had to mount a legal challenge to be allowed into the White House press pool because broadcast networks ABC, CBS, and NBC vociferously fought against is inclusion. CNN won and that opened up the doors to more media in the White House. That’s why, this new protest, led by CNN, to not allow questions by other media outlets at White House press conferences, is ironic.
Like you say, everyone is biased, but journalists have an ethical responsibility to check theirs at the door before each story.
PJB, thanks for weighing in. With the old school method of reporting, it unfortunately simply can’t compete against the lightening quick demands of news now. Shoot first, ask questions later. Traditional journalism can’t even compete with Twitter, things are so lightening fast.
Interesting history on CNN! It’s all a battle for viewership and dollars.
Great article! Unlike the fake news writers, when you hole up in your Lake Tahoe property to bang out articles, the results are well worth reading!
Excellent post Sam. That was eye opening and extremely informative. I had no idea that’s how the Fake News system works globally.
There is a bit more to the Establishment side of the media game. In order for them (CNN, Fox, etc.) to take advantage of the “superstar model” they had to re-incorporate themselves as entertainment companies instead of “news/press” companies. This was done in order to avoid additional libel/slander liability.
That picture of two different versions of the WSJ fascinated me. Targeting different markets with different headlines must be relatively easy to do in print media but that must be getting phased out as more content shifts online.
It’s pretty nuts how fake news has really taken off over the last year especially with the election. Whenever I see a caption that sounds crazy or shocking I just assume it’s probably click bate nowadays.
I practically never spend any time on facebook so I don’t have to worry about reading fake news here but there sure are a ton of people who are exposed to it every day. It will be interesting to see if FB ever decides to take a stand and start blocking it. Something tells me they won’t bother.
Actually it maybe easier online. With it address locating and database created stories you can create an article and headline for every city in the country in ten minutes.
Pretty sure this is well documented in the real life story in Anchorman 2 and news about America as my tongue in cheek response. But seriously, I’ve gotten to the point where I have a hard time watching any news because it’s all opinionated, we’re past fact finding and reporting and everything is given a political skew. Trump saves cat in tree gets storylines from the left of Trump throws cat out of tree and from the right of Benevolent Trump dutifully rescues feline from devastating fall. Honestly it’s taxing and I think many of us are beyond it, but the masses and bases of both parties like sensationalism. It’s unfortunate that this is what news reporting has devolved into.
Yeah I dont even read “real” usa news now as they report on stupid stuff like what some some politician or celebrity said on twitter…I find myself now looking at bbc online for info on worldly news and occassionally WSJ.
Hi Sam. Great coverage in your story, thank you.
A really big thing happened in the late ninties (20 years ago) that kicked off much of the fake news with a Fox News station in Florida. I followed it early in the new millennium, and was awed that it didn’t get the coverage it deserved. You are right, follow the money. The story is much richer than this link shows but it gives a quick overview of what happened
Someone influential spotted the new found cult-like abilities of fake news and the rest as they say is history.
I hope one day our world finds the free and happy place that values truth, integrity, and bringing out the better of our collective angels.
The creators of fake news need to be ban universally across the all media mediums. That’s complex. So lets start simple and say, creators of fake news need to be banned on the internet. So each story’s linked to an author. Whenever that author posts, he or she is automatically removed. How this company would improve their yearly revenue is a wonderful question? Once this company figures out how to earn revenue it is now viable. Google could easily do this and create blacklists but they won’t cause it will shrink their revenue. And I guess it’s a minimum of tens of millions, but could easily be hundreds of millions if not more.
There are countless posters in silicon valley I want to block and never read anything they have to say on any medium for my entire lifetime. Yes electric cars will eat the world they said, that was 12 years ago and they constantly keep saying now in 2 yrs, in 4 yrs max. Amazon is the model tech company, while working conditions in warehouse are part time, under 40 hours with no benefits, physically hard.. Jeff Bezos should change his companies’ mission statement to “earning billions in profit to create malls in outerspace in order to advance the civilization on mars and beyond” that will earn him better, free PR and a bunch young, very impressionable engineers and coders from university will definitely buy it I guarantee.
I agree with you in theory that “Fake News” should be banned. The only problem is that the big establishment players such as CNN, FOX, etc have an incentive to label all independent media such as Financial Samurai as “Fake News” in order to suppress dissent (and competition). As horrible as it is to see the lies out there, I’m nervous that any effort to crack down will end up backfiring and reinforcing the establishment.
An interesting aspect will come from the courts. Is fake news “free speech” or the equivalent of “yelling FIRE in a movie theatre?” The decision would have a large impact on the industry either way.
Free speech.
To borrow wisdom from Homer Simpson:
“It takes two people to lie. One to tell the lie and the other to believe it”
Is fake news a problem? No.
Stupid people with no critical thinking skills and no ability to research subjects beyond a google search are. The solution is education, self reliance and democracy/freedom..or, alternatively and most hopefully abandonment of freedom and servitude to a benevolent leading class. So far we’re choosing as a society option 2. Less hopefully and more likely this leading class will not be benevolent. It is a lot easier road to go than freedom but man the ending hasn’t been good in history.
Banning “fake news” won’t solve the problem, it’ll just push more power to the leading class to deliver appropriate “real news” so they can keep you in line. But that’ll save the populace from the difficulty of thinking critically for themselves.
Whoever knew Homer was so wise?
The issue is, people are highly impressionable, and things start SCALING to large numbers.
If 10% of the 2 billion people on FB believe a fake news article, that’s a whopping 200 million people whose thoughts have been manipulated.
Good Article Sam. I definitely agree that fake news is becoming more of a problem. However, I think we need to call out the establishment media as well. The media chooses not to focus on important things and does not call out lies by the political leaders. It usually parrots them, but never questions. Classical examples of this: the Iraq War (WMDs anyone?), and the Wall-Street Bailouts (the government originally told us the $700 Billion bailout fund would buy assets, not that they would give it directly to the Banks). We’re seeing the rise of opinionated but still objective media such as yourself, John Oliver, or TYT which is a breath of fresh air compared to the stale lies of the Establishment.
Now, we’re somewhat of a change now with the current President, as we are finally starting to see some questioning by the mainstream media. Reuters did a piece on how they would start covering the US more critically like they do places such as Russia or Turkey. But as soon as power changes, I suspect the questioning will go away.
https://www.reuters.com/article/rpb-adlertrump-idUSKBN15F276
Wow! Tons of insightful information here. Especially since the elections, I’ve been trying to actively discern what is real and fake news before I click on it, but they can be tricky about it. It’s disappointing to see how often fake news gets shared on social media because people were deceived into believing it.
This is an interesting approach. I’ve leaned toward mostly ignoring all media. Fake news or real the vast majority will not impact me and reading it will likely make my life worse not better. I like to think of myself as well informed but I am starting to think being almost uninformed maybe better. ?
Same here. I’ve quit Facebook and quit news websites since the beginning of the month.
I get my world news from radio and watch Bloomberg for the economic news.
It works too, I have some much more headspace to give to creative pursuits. I think the Earth will continue spinning without me and in case of a war or a terrorist attack, I will hear about it anyway. It’s not like I can do anything to stop them and I can’t help the victims with my reading about them in any way so I might as well focus on fixing the things I can fix in my comunity and in my life. Humanity will sort itself out without me.
“Readers, why do people spend so much time on Facebook when the newsfeed is now full of garbage?”
People can spend as much time on FB as they want IF they make the effort to filter the garbage out. My feed has almost no garbage because I use the option FB provides to opt out of organically-pushed headlines, and if a friend is a constant pusher of fake headlines they get “unfollowed,” but not unfriended. After a while, FB learns what I want to see.
Again, it is about effort. Otherwise, you spend your time in an echo chamber of garbage.
As a FB shareholder I have my opinions on the subject too. I use FB and my feed has about zero garbage in it based on use of aforementioned tools to weed it out. So it’s already possible for everyone to reduce the amount of “fake news” they consume. I’ve noticed their algos are quite good at figuring out what interests you most. I don’t think that’s the best solution since it may crowd out other posts/topics that might interest you also, but may never see. As with anything there’s always a drawback. As far as their ability to stop fake news I’m not sure I 100% agree they should. I totally get it would be better if there were none. But the company has already been accused on multiple fronts for it’s algos biasing one side over another. When you are the gatekeeper to information like FB is you almost have to allow everything. Once you start limiting and deciding what people will see you run the risk of falling down the same path as MSM. At one time MSM was the most trusted source, and thats no longer the case so this slope is extremely slippery. At least FB has more options by allowing users to decide what they want to see. You can’t do that with television journalism besides switching to one of 2-3 competing channels.
The public lost confidence in MSM long ago anyway. Add in this war they have with Trump and all it does is waste everyones time and resources. They picked their side and never thought they’d lose a battle. So now it looks like they’ll decide to go down in flames before changing course.
https://www.gallup.com/poll/195542/americans-trust-mass-media-sinks-new-low.aspx
Personally I watch little tv, and when I happen to be some where with news on I usually laugh at how incredulous and horrible the reporting is.
At the end I have to say I’d put more emphasis on us as consumers. Unfortunately many of our fellow americans aren’t able to sniff out this garbage that’s put out constantly. It sucks they can’t. It ends up as a tremendous waste of resources, and in the long run creates a less efficient and profitable world for everyone.
Good summary Sam. Honestly fake news on the internet is not that new of a phenomenon. I remember in college it was a widely known rule you quote books not online when writing a paper. The reason was simply that a book had at least a barrier to entry. Any tom dick and harry could post wrong information on a website. I suspect that barrier has decreased for books even based on your anecdote re “I will Tech you to be rich”. So now how do you quote a good source? You investigate their credentials and cross check multiple sources.
Facebook is a like a warm blanket for most people. Many have managed to filter out all the people that don’t think like them. While fake news simply operates as their confirmation bias. This means their world view never has to be challenged, and their brains never have to strain. What started out as an impressive communication medium (Facebook), has now turned into a great experiment on human nature. People are beginning to model it after suburbs with gated entries.
I think fake news is where wars will now be waged. We saw it in the recent election, and with people’s data online becoming more available, fake news info can be used with surgical precision to change someone’s behavior and thinking. Unless of course they’re critical thinkers, a breed of human we somehow need to produce more of.
I think I saw a segment on 60 minutes about Fake News. These guys were holed up in a 2 bedroom house and making millions of dollars a month from pounding out 15 minute articles inflaming political opposition.
It honestly was sad because you saw that they didn’t care what they wrote about as long as they were getting ad revenue. So had literally sold their soul for money.
I feel like at some point Congress is going to strengthen the teeth of lying in the media or some enterprising class action lawyer is going to sue to get some of that ad money from these folks.
Should be interesting to see what happens.
It’s quite entrepreneurial, actually. And it’s all thanks to the internet.
I want folks to realize there is SO MUCH OPPORTUNITY out there to make mega bucks. You’ve just got to exploit inefficiencies and the enablers who enable them. Fake news is one of the biggest current arbitrages today and FB is doing nothing to stop it.
Therefore, any enterprising individual w/ enough motivation will take advantage. Let’s say you make several million, and then FB shuts down fake news. You’ll always have your millions.
We’re in a grey area now as some will just argue fake news to be freedom of speech.
Great article Sam. The only other thing you might be missing about fake news is how much the big networks like CNN, Fox News, etc. are benefiting from it as well. Those networks thrive on controversy and drama, so even though they are now spending a lot of time and energy fighting against fake news, ironically viewership is up (and so that means more ad $$$). Like you said, it’s hard to move away from it when it’s generating revenue for you. When was the last time you saw CNN on TV without a “breaking news” logo? So much drama!
I agree! The big news networks also have a role and are biased to Republican or Democratic views which skews opinion and creates divisiveness in society. Everyone of us gets their information from one of these news sources. The greater the bias the greater the divisiveness that gets created in our society because what gets reported to us can misinform and greatly shape our wordly views.
Yep. Journalism is, and always has been, an exercise in Plato’s cave. It’s absolutely critical to a democracy that citizens know what their elected representatives are up to, but it’s nearly impossible to escape bias altogether.
The Internet gave nearly everyone the ability to curate their own news sources; unfortunately, “free!” and “confirms my beliefs!” seem to be winning over “quality facts & analysis.”
I try to get around this by subscribing to “New York Times” and “Wall Street Journal” — solid reporting, intelligent op-eds, and counterbalancing ideologies. I reckon it’s a decent approach, but I have no illusions that it’s ideal.
How do you fine citizens handle this dilemma?
I spend an hour a month on FB at most as it is filled with people forwarding nonsense and spewing their beliefs with little to no substance – it looks like everyone is trolling each other, even friends and family!
They could stop it, but they are giving people what they want and taking in the cash….. if they tried to stop it I assume their shareholders wouldn’t be to happy with the rev decrease
I think you’re spot on that Facebook could stop the fake news if they wanted to. But with billions of dollars at stake, there’s no motivation for them to do so. I’m really dumbfounded as to why people spend so much time on Facebook. I guess we’ve gotten to the point where people enjoy reading something scandalous rather than something truthful. Don’t let the facts get in the way of a good story.
I can’t stand facebook and definitely don’t read any news from it. I try to get on it at little as possible.