Business and the media: A rapidly evolving relationship

Cognizant of the way information ricochets through the media these days, companies need to redouble efforts to be sure that the information they release about themselves is the right data at the moment, and that it's accurately transmitted. In a recent speech to the Economic Club of Phoenix, Andrew Leckey, director of the Donald W. Reynolds National Center for Business Journalism at ASU's Walter Cronkite School of Journalism and Mass Communication, discussed the changing relationship between business and the media.

Andrew Leckey recalls being on the set at CNBC watching the stock index at the same time as market commentator Dan Dorfman delivered his commentary to the cameras. Instantly the companies Dorfman mentioned moved. Dorfman's influence for a while was so great that the Chicago Board Option Exchange instituted the "Dorfman Rule" — temporarily halting trade for companies mentioned by the journalist.

But that was in the long-ago '90s. The cable industry had already fomented change in broadcast news, but compared to today's news cycle, it was arguably the dark ages of information flow. No one waits for a business guru to take his seat on a TV set anymore. Information churns through computers, cell phones, PDA's and iPods as well as radios and TVs — 24 hours a day, around the world. The pundits are in the middle of it with their blogs.

"The market was always nervous, but now it's as if it's had about 10 cups of coffee every morning," said Leckey, director of the Donald W. Reynolds National Center for Business Journalism at ASU's Walter Cronkite School of Journalism and Mass Communication. The market moves by information, he said, even more so than in the past, and information is moving at a high rate of speed.

"It used to take a day or two, or a huge event, for the market to be moved," he said. Journalists would sift out the news, think it through, and present it in an organized fashion. Now, however, events are like the proverbial elephant and the blind men, he said. "Waves of people touch the elephant in a different place," he remarked, then report on it.

Each can describe only what he can reach, however, and while all of the reports are correct in a narrow sense, none of them describes the whole animal. Eventually the story assumes a shape, but in the meantime, disconnected pieces of information whirl around. The sheer volume of media available around the world means that these fragments can achieve global reach long before they coalesce into a complete analysis.

"These days, one company in an industry can have bad news, or positive news, or just say something in the course of an analysts' meeting that can affect an entire industry, and then the entire country, and then countries," he said. Love or hate — it almost doesn't matter, because business and the media are intertwined. Leckey recently addressed a business audience about that relationship, and how it gives business a stake in the future of news, at a meeting of the Economic Club of Phoenix.

Business news: good for business

Leckey says that business readers are increasingly sophisticated: more of them have business degrees, including MBAs, and more of them are familiar with business concepts. Young people have benefited from the impact of technology, he added. They are more receptive to content that demands a familiarity with business fundamentals, and, encouragingly, fewer are afraid of math.

Leckey, whose center focuses on education for aspiring business reporters, says that the current crop of students are actually easier to teach than previous generations — "they pick it up quicker," he said. This will come as good news to business executives. In a survey of 500 corporate CEOs conducted before the Reynolds Center opened, Leckey discovered that only one-third characterized media coverage of business as accurate.

Business should care about the quality of business reporting, Leckey argues, because wide coverage is "inherently good for business." It's important to a company's stock price to be widely known, and it makes it easier to hire good people. "The flow of information helps companies do their job better, because they get feedback," he added. "Nobody likes to do business in a vacuum."

"Business also affects everything around us," he added. "The company that provides services and products should have a strong image in the community, and it's important for the media to cover them because they impact the local economy, families' lives, jobs." "This is something that we stress in the work of the center; this is an important job," he added. It's bad for business and bad for the community when the media does not do it.

The future of newspapers

It's no longer breaking news: newspapers across the country are struggling with declining revenues and eroding readership. And a tradition of reporting excellence is no insurance against the trend. The Tribune Company has become the latest of a string of media companies taking measures to cut costs, this week announcing staff reductions at the venerable Los Angeles Times and Chicago Tribune.

"Consolidation in the newspaper industry is having a variety of effects," Leckey said in an interview. "One is that the newspaper industry is thrashing around trying to find what is best going to please the reader, and in doing so there's a tendency to go for the things that will immediately capture the reader rather than the things that have more staying power." Some papers are trying a more general interest format as they deal with a change in lifestyle and reading habits on the part of readers, resulting in a hit to business coverage.

Example: business sections in many papers are shrinking. Traditionally the smallest section of the newspaper, the business pages lost girth when the stock tables migrated to the web, and news columns have not been added to replace the tables, Leckey said. Consistent with the general interest approach, some papers have begun to scatter business news stories throughout the paper, he added, leading to a dilution of coverage.

The zoned sections that many papers have successfully launched to cover neighborhoods or suburbs have actually shored up local business coverage, even as they are part of the trend toward lifting business news out of a section of its own. Since the mall and the local businesses are the distinguishing feature of smaller communities, the zoned sections that cover them tend to carry business news.

But although business appears to be finding its spot in locally-focused publications, it's less certain how papers with regional or national audiences will deal with business news in the future. Leckey thinks that in some cases, business sections could be endangered. And once coverage is lost in one place there's no guarantee that it will be replaced elsewhere, he said.

One possibility is that newspapers will go the way of magazines. Years ago, as general interest publications like Life foundered, it looked like magazines were finished. Instead, the magazine industry found a successful formula in serving niche audiences. Newspapers have always had distinct personalities, Leckey pointed out: the San Jose Mercury News, for example, focuses on the technology news coming out of Silicon Valley. Some may find a way to succeed by expanding on a niche and finding readership broadly through national circulation and the web.

But what about the web? Late to the game in many cases, newspapers are still experimenting with ways to utilize the Internet, where younger readers, especially, are getting information. Newspapers have struggled with this, and are still looking for a business model. The filtering role that newspapers have provided in the past — organizing the bits of information circulating around a story — is perhaps even more critical in a digital world, if the industry can find a way to leverage it.

"In some cases, papers are more concerned about branching out into their online product than they are with retaining the attributes of a newspaper," he said. Leckey does not believe that the web will ever completely supplant paper, however. At least for now, it's a function of the way we use the product: people still enjoy tucking a newspaper under their arm on their way out to lunch.

Implications

What does it all mean for business? Companies more than ever need to watch for misinformation. "It behooves companies to monitor how their names are used," Leckey said. Cognizant of the way information ricochets through the media these days, companies also need to be extra thoughtful about choosing the information they release about themselves, and diligent that it's accurately transmitted. It's more important than ever that CEOs communicate effectively.

Bottom Line:

Leckey's list of things not to do when communicating with the media:

• Never release information in a misleading fashion
• Don't emphasize insignificant parts of your business (see note on misleading information)
• Don't send out a press release at 5 p.m. on Friday
• Don't hide information in footnotes
• Don't force journalists to do the math; calculate percentages — when your numbers are going down as well as up
• Don't disappear as soon as your release goes out
• Don't "stonewall": commit to being helpful, not just available
• Don't feel you need to keep talking just to fill time

Leckey's list of ways to help the media tell your story:

• Build relationships with reporters, and commit to maintaining those relationships
• Learn to define your company in two sentences, and your job in one
• Eliminate the word "solutions" from your vocabulary
• Become informed — about your industry and the media that cover it