2.2: The value of accurate information

Figure \(\PageIndex{1}\): Photo illustration of data accuracy. (Unsplash free-to-use license, Scott Graham)

Although it is difficult to place a dollar value on accurate information in society, it is easy to think of times where inaccurate information is costly in terms of direct financial impacts. This section addresses the value of accuracy in media both by showing examples of when it is costly to be wrong and by describing in a general sense the financial benefits of being accurate. The purpose of this section is to launch a discussion about the actual, direct costs of inaccuracy and the value of accuracy. Section 2.4 deals with the broader impacts of mis/disinformation on societies.

Costs of inaccuracy

Some of the most concrete examples of the costs of relying on inaccurate information come from outside the media industry. Most tech startups, for example, gather user data and apply what they learn to determine how to continue to improve their products and services. They use this information before going to market and when fighting for survival and market position. If a tech company suffers data loss, has gaps in its data collection, or receives misleading data from a supplier, it could threaten the business by influencing leaders to make bad decisions.

Individual investors also rely on accurate information to make decisions about where and when to move their money. Acting on bad information can cost an investor millions. Likewise, consumers rely on accurate information when making purchases. If an individual or business finds they have been lied to when making a purchase, they may lose faith in a product, a brand, or a service provider.

An example of the direct costs of misinformation comes from the social media platform X, a.k.a. Twitter. After Elon Musk took over the company and loosened restrictions on certain types of speech on the platform he came to own and control, misinformation, antisemitism, and hate speech were all on the rise. In the fall of 2023, dozens of large-scale advertising buyers paused or even vowed to stop using X to promote their businesses out of concerns that their promotional content might run alongside false and/or hateful content. One estimate suggested X might have lost about $75 million worth of advertising during the holiday season of 2023.

Another example of direct losses related to false information came in the defamation lawsuit brought by Dominion Voting Systems against Fox News. Fox settled the lawsuit in April of 2023 and agreed to pay out $787.5 million. In the settlement, Fox admitted it made false claims about Dominion but stopped short of apologizing. Fox News had repeated false conspiracy theories about Dominion changing votes in the 2024 presidential election in favor of Joe Biden. Superior Court Judge Eric Davis stated in the ruling, "The evidence developed in this civil proceeding demonstrates that it is CRYSTAL clear that none of the Statements relating to Dominion about the 2020 election are true. Therefore, the Court will grant summary judgment in favor of Dominion on the element of falsity" (Source: DominionVoting.com).

Although a dollar amount loss is difficult to enumerate, the New York Times lost credibility, potentially some advertising revenue, and two top editors lost their jobs, after NYT reporter Jayson Blair was found in 2003 to have been plagiarizing news stories for years. Blair lifted quotes from other news organizations, made up details and quotes for stories, and claimed to be reporting from the field when he was, in fact, in his apartment or in the New York Times building. Blair has apologized and acknowledged character flaws that, in addition to bipolar disorder and substance abuse, contributed to his failures to report accurate news.

The scandal not only hurt the New York Times, it gave ammunition to those who opposed affirmative action hiring in media organizations, even though these programs are relatively recent attempts to countervail historically inequitable hiring practices for people of color and women in major news outlets. The push in the 2020s to hire more journalists and editors of color suggests that the work was not done in the 2000s. Though the Jayson Blair scandal is not the cause of those shortcomings, it likely gave news organizations an excuse to ease off of affirmative action practices.

In general, the Jayson Blair scandal hurt the credibility of the U.S. news media because it happened at one of the most popular and most trusted news organizations in the country. The ramifications of individual acts of plagiarism coupled with a lack of editorial oversight can be devastating and take decades to recover from.

Quick Write Exercise

Write 4-5 sentences about a time when a media company or an influencer lost your trust because they published inaccurate information. Answer the following: What was the name of the media company or influencer? What was the information they got wrong? Does it appear that this was a purposeful or negligent release of false information? How did you feel when you found out the information was bad? Did the revelation that this media company or influencer was wrong cause you to stop following them, viewing their posts, and/or reading their content? What are or what might be the long-term effects of this failure to deliver accurate information?

Thus far, this discussion has demonstrated that individuals, media companies, and other types of businesses may suffer significant losses after releasing or following inaccurate information, but there are potential macroeconomic effects as well. National and global marketplaces risk becoming destabilized if investors and companies no longer believe they have accurate or adequate information to act upon. 

Example: Climate Change

As large scale global investors find themselves dealing with the impacts of climate change more and more, "G20 Finance Ministers and Central Bank Governors" put together a task force to recommend what types of disclosures companies should make about how climate change is likely to affect their bottom line. The nature of this task force is based on the idea that markets need accurate information to function: "One of the essential functions of financial markets is to price risk to support informed, efficient capital-allocation decisions. To carry out this function, financial markets need accurate and timely disclosure from companies."

The key to that quote is the phrase "to price risk," which means that investors need to be able to discount stocks that might be hurt by climate change and to anticipate potential increases in value for companies that might, one way or another, benefit from changing climates. The group made several suggestions for the types of disclosures that governments might require from companies.

What this means for media writers is this: If those at the highest levels of finance recognize that accuracy is essential for functioning global markets, it stands to reason that accuracy (about all sorts of topics, including but not limited to climate change) is also important in smaller markets, public relations, advertising, and the "marketplace of ideas" that is our global news and information ecosystem.

In fact, in advertising and integrated marketing, inaccuracy may be illegal. False advertising is against the law. If a brand or business is found to be making false claims, it may be forced to pull its ads and face fines. Being inaccurate in advertising may fit the legal definition of deception. As the previous link indicates, deceptions in product descriptions, pricing, measurements, product comparisons, guarantees/warrantees might carry civil and/or criminal punishment, depending on state laws.

During a crisis, if a brand or public relations firm lies to the public and is caught, it can damage the brand's long-term reputation and lead to lawsuits.

Story time: The BP Oil Spill

In 2010, British Petroleum, a.k.a BP, lost an oil drilling rig called the Deepwater Horizon in an explosion that killed 11 people and sent 4 million barrels of oil into the Gulf of Mexico over an 87-day period. That the gusher was unstoppable for nearly three months was public knowledge, but the amount of oil being lost to the company and spewing into the gulf was not known at the time. BP famously made multiple grave PR errors during the early days of the oil spill, but what got the company into legal trouble for lying was hiding the true extent of the spill. BP paid U.S. investors $175 million for publicizing that false information. In the context of the more than $70 billion BP spent on health, business, and environmental settlements, as well as other costs, $175 million may seem like a drop in the bucket, this is one cost that after the oil spill had begun was still completely in BP's control. The long-term environmental effects of the Deepwater Horizon oil spill are still being felt. (This text was first published in 2024). So are the long-term effects of BP's public relations errors on the brand's value, market position, and level of public trust.

Highlighting accuracy in news

In the news business, trust and reliability are central to the brand. Consumers often hold news organizations to higher standards than PR firms and advertisers, who are expected to advocate for corporate interests, private companies, brands, etc.

There are two ways to place economic value on accuracy in news. The first has already been stated: Accuracy contributes to trust, and trust can help build and sustain news audiences. Fact checking news sites and services have also found value in providing nonpartisan, trustworthy reviews of claims made in the news and on social media. 

When news organizations had near monopoly dominance over the delivery of daily information to audiences in cities around the world, they often had large staffs, and it was not uncommon for there to be three, four, or more layers of editorial review for popular and/or potentially controversial news stories. Now, though, journalists are often tasked with serving as their own copy editors to make sure basic facts are correct, and news editors are often stretched thin. Accuracy is as important as ever, but news organizations have fewer resources to devote to ensuring it.

The rise of fact checking as a business model

There appear to be business opportunities in working to cover accuracy gaps, particularly because conspiracy theories abound in social media spaces and are sometimes repeated in mainstream media outlets. The COVID-19 pandemic led to a massive increase in misinformation. The study linked in the previous sentence called the phenomenon an "infodemic," and found that "media mentions of U.S. President Donald Trump within the context of COVID-19 misinformation made up by far the largest share of the infodemic." If political leaders are determined to spread disinformation, mass media outlets can find themselves in a conundrum. As a matter of historical practice, it is in their nature to share with the general public what leaders are saying, but with some leaders it is impossible to repeat what is said without repeating misinformation.

One solution might be to report what politicians say and to follow with clarifications from well-researched third party fact checkers. If news organizations hesitate to countervail political leaders for fear of being accused of being biased, reliable and trusted fact checkers might serve a vital role in correcting the record.

Poynter.org conducts an annual review of fact checking websites and finds a mix of nonprofit and for-profit fact checkers in the global marketplace. Although some fact checking services are profitable, most are fighting three battles. First, they must do the challenging work of fact checking in an information ecosystem where information moves at a furious, constant pace. Second, they face backlash from those who would rather they did not combat misinformation. Third, they are constantly seeking funding sources as the business models for fact checking are still being tested.

The most recent "State of Fact Checkers" report from Poynter noted that fact checkers are already employing AI to assist with their work, and they plan to continue to use it in a "limited role" in the future, which might increase these services' ability to manage large flows of information meaningfully. But just as AI adds to their capabilities, it presents a host of new challenges for fact checking around the world.

Websites such as FactCheck.org clearly identify the processes they use to check information. FactCheck mostly focuses on political news, but other successful fact checking services seem to follow similar guidelines.

The Fact Check Process

1. Select a topic.
2. Conduct research to analyze a claim and supporting information.
3. Write a fact check report.
4. Put the report through multiple rounds of editing.
5. Have a robust system in place for making correction or retractions, if necessary.

Source: FactCheck.org, "Our Process"

As news organizations work to maintain audience levels that can sustain local and regional news in a digital information ecosystem, they continue to place accuracy atop their list of key features and responsibilities to the citizens they serve, but business models for providing accurate information will likely exist within and outside of news organizations as they have traditionally been structured since the days of newspaper dominance.

Newswriters and news organizations that fail to provide clear, accurate information break their readers' trust and fail to serve their core function in society. This is not to say that misinformation will necessarily chase away audiences. There may be an audience for those who will state clearly false information in support of one ideology or another, but in the long run it is easy to demonstrate that these outlets are lying, and even as they succeed at building audiences they fail at fulfilling their social responsibility to provide citizens with the truth as well as we can know it at any given time.

The next two sections cover strategies for media writers to verify information and finally a brief discussion of the social implications of inaccuracy, mis/disinformation.