Sunday, February 24, 2013

They're just not paying Gelman's preferred currency -- the odd economics of access

This post from Andrew Gelman on a truly bad graph and this story from NPR had a common element that caught my eye, partly because I've been thinking about the role connections play in careers and economic mobility.

Here's the relevant passage from Gelman:
All ugliness aside, this reminds me of a story that I haven’t had a chance to share . . . until now. The bit on the above infographic about “C-level execs” reminds me of something that happened a couple years ago, when I was invited to speak at an event, “called “The 2012 Election: Predicted Outcomes and Implications for Your Business,” for “an association of C-suite executives.” I responded that I was interested and told them my fee, to which they responded:

"I am glad to hear that you are interested in this opportunity. However, we don’t compensate speakers as we find that most are interested in the opportunity to be in front of a room full of high quality C-suite executives."

Is that for real? I speak to all sorts of people for free (for example, I just spoke last month at a datatviz meetup), but I was surprised to hear that an association of business executives weren’t planning to pay. So I declined. I say this not to imply that I’m some sort of anti-corporate crusader (after all, I would’ve been happy to talk for pay!) but to express my bafflement at the whole “C-level executive” thing. What’s going on with that?
And here's the opening of the NPR story:
CNBC is far and away the television ratings leader in the financial cable news business. Now, evidence arrives that its executives, producers and reporters are going to great lengths to maintain its status.

The channel has adopted a policy that prohibits guests from appearing on rival channels amid breaking news if they want to be seen by CNBC's larger audience.
In both cases, it seems that the party providing the service is, in a sense, paying the party receiving it. The Chief ____ Officers would receive actionable business intelligence; CNBC would receive valuable on-air talent. You would expect the recipients to try to compensate for these services either directly on indirectly. Instead the company in the first anecdote insists on getting for free what would normally be a well compensated service while CNBC actually puts additional demands and restrictions on the people providing the free service.

Of course, that's not what's going on, at least not most of the time. While Gelman really was a researcher who was offering to present findings of potential value to a company, most similar presentations are actually sales pitches. I'm going to be a bit vague here because I'm currently working in the corporate world, but without naming names, tremendous amounts of capital is drained from American businesses every year by researchers with a slick HBR paper, an inspirational story and a new set of buzz-words.

If you can get a C-level executive interested in your product you can charge obscene amounts of money for years. Better yet, the metrics for success are ill-defined to nonexistent. The only real barrier to becoming the next Tom Peters is access to someone at or near the top of a company. It's easy to understand why companies think they can get research presented for free.*

Something similar is going on in the CNBC example. The majority of the people interviewed on CNBC are either selling something -- a book, some stocks, themselves -- or are building and maintaining a brand. Doing these things requires getting access to large numbers of people. You could manage this by buying advertising (most effectively on a targeted platform like CNBC) but ads are expensive and, even before TiVo they were often avoided either through channel surfing or, before the remote, simply leaving the room for a snack or a bathroom break.

Getting your access as part of regular programming and having it labeled as news is a far better way of doing things. You can why the interviewees would put up with restrictions.

This does, of course, raise questions about conflict of interest and journalistic integrity, but that's a topic for another post.

* This still leaves unexplained why executives would want to, as Gelman points out in this comment, waste their time with inferior speakers to avoid paying a relatively trivial amount of money. Thoughts on that will have to wait for an upcoming post.

UPDATE: This comment from Felix Salmon throws some amusing light on an event similar to the one in Gelman's anecdote.

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