A version of this post was published on Risk & Compliance Magazine.
In 2017, consumer products giant Procter & Gamble cut $140 million from its digital advertising budget after brand safety concerns arose when its ads were placed next to online content of suspicious origin. Social media companies took notice, for bottom-line impact, for sure, but also as the message took firm root that facts and truth matter.
At the same time, the economics of “fake news” is an emerging and rapidly expanding area of both academic and commercial inquiry. Researchers from the Yale University and Massachusetts Institute of Technology schools of management are already algorithmically analyzing data sets of fake stock promotion articles prosecuted by the U.S. Securities and Exchange Commission (SEC). Their initial findings reveal that fake news has a price impact on small cap companies with high retail ownership, but not a particularly significant impact on large enterprises.
And while this is only one metric of the tangible cost fake news has on business, the study notes that the prevalence and impact of fake news from crowd-sourced origins continue to grow and generate attention and concern in the financial markets. Markets are most vulnerable when real-time information costs are high and the ability to take corrective action immediately is limited.
With today’s virtually unregulated digital domain, in which opinion, identity politics and situational truth trade as fact, the language of business where conversation is currency cannot survive without a re-grounding.
This crisis reflects myriad causes but has one profound effect: Facts are less important to Western society than any time in at least modern history. Though propaganda and disinformation campaigns have long punctured human history, we have never witnessed the mass exodus from a common set of facts that enable transactional discourse worldwide. Without a committed front to restore the foundational value of facts and truth, we may well be forced permanently into the perilous waters of “situational facts” and selective truths. This will trigger an enormous tax and tangible cost on business.
Underscoring the problem, The New York Times, CNN, The Wall Street Journal and other traditional media outlets have launched campaigns championing the necessity of facts and truth. While it seems absurd that this should be necessary, the prevailing distrust in media itself is both the cause and effect. With the phrase “fake news” bandied about so readily, it is no wonder that skepticism around the accuracy of information is increasing. The 2019 Edelman Trust Barometer revealed that 73 percent worry that misinformation, fake news and digital bots are a modern weapon of propaganda.
In short, we no longer share a common baseline of facts and, worse, no clear fact-checking solution exists to enable us to discern what is real and what is fake. Consequently, trust in business among the general population, globally, hovers at 56 percent. And thus, businesses are struggling mightily on how best to tackle fake news and misinformation campaigns given its complexity and elusiveness.
How Bots Harm Business
Many business leaders outside of the technology sector do not possess working fluency with the dark and deep state of weaponized digital warfare. Frequently, misinformation and fake news campaigns are amplified and circulated through false digital accounts or automated “bots”, which are artificial tweets, emails or content on any channel that appears to be real to the average viewer.
Research by the Association for Working Machinery finds that bots are being digitally designed by nation states, short sellers, black hat hackers and other malicious actors to cause pernicious harm and disruption. Often, these bots, which appear to be from legitimate sources, manipulate social media interactions and engagement with spam, fabrication, malware, slander and disruptive and distracting noise.
Plus, based on Brookings Institution research, ambiguous bots easily infiltrate an expanding swath of business information and communication with consumers to manipulate perceptions of social, political and commercial realties with incalculable results. Using specific keywords that these actors know will magnify their influence and impact conversations among likeminded clusters of people are typically the target of these campaigns.
When viewers see what they believe to be trusted sources repeat specific points, they are far more likely to be influenced dispositively by the information or material. The Reuters Institute for the Study of Journalism found that only 24 percent of Americans believe social media sites adequately separate fact from fiction, compared to 40 percent for the news media. Compellingly, this explains the fragility and fragmentation of public and business discourse.
Investors have even more reasons to be worried. The varied sources of information and data upon which they rely – from government policy announcements to financial information to corporate filing and earnings data – are all at risk of being falsified. A variety of experts have noted that financial markets will react just as quickly to fake news as they will to empirical data. Similarly, market-moving information data on interbank lending rates, energy prices and even a market influencer that is generated by artificial intelligence (AI) will be impossible to differentiate, in the immediate term, from the real thing.
And, perhaps most frightening, most experts posit that the AI disinformation wars have only just begun and that the world in which we reside in a decade will be vastly different from the one we live in now. AI, and the technology it creates, will lead to quantum computing power that will operate at a multiple millions of times faster than current machines. The speed of disruption across all industry sectors will not take years or even months but only an instant.
Business Can Fight Back
Business must defend and counter. While the established internet giants may be publishing fake news and damaging the ability to distinguish between veracity and fabrication, enterprises will need to be the innovators that detect, expose and destroy deliberate disinformation channels and content.
Technologist Aviv Ovadya, an expert on misinformation and partisan news, has been a leader in developing business solutions to fake news and digital propaganda. He maintains that companies must begin to factor reality-distortion techniques into their crisis-scenario planning and to prepare and equip executives to communicate facts quickly and correct fabrication before they spread.
Ovadya also contends it is essential for social media platforms to incorporate real-time forgery-detection capacity into their products and to build out systems that can adapt with improvements in the technology.
Crisis and business intelligence advisory firms are already being retained to develop nimble and adaptable playbooks, scenario plans, digitalized crowdsourcing for early detection, including bots and executive simulations that enable clients to confront and curb a crisis anchored by a false reality or architected sabotage. Real-time digital analytics also are essential for measuring the size and scale and provide decisional direction for a “wag the dog” attack.
Currently, the propagandists, con artists and cyber criminals are running the table. But with focus, commitment and shared vigilance, the tables can – and will be – turned.
Harlan Loeb is chair, Crisis & Reputation Risk Advisory.