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Curious inequalities in corporate news volume endure, despite Internet forces

Photo courtesy Alaskan Dude via Flickr

Photo courtesy Alaskan Dude via Flickr

How to make sense of news coverage using the “80/20 rule”

In Alice in Wonderland, the Mad Hatter has the 10/6 fraction posted on side of his hat, but perhaps it should have been 80/20 instead. After all, Microsoft once noted that 80% of errors and crashes in its Windows and Office applications were caused by just 20% of known system bugs.
So, how does this madding circumstance help you in the world of PR and media relations?

Well, this Microsoft bug is a perfect example of the 80-20 observation, otherwise known as the Pareto principle. Most frequently you hear about the 80-20 observation in sales, where 80% of a company’s revenue may come from just 20% of its customers. But, the 80-20 phenomenon has application well beyond sales, even in media world!

If we look at the coverage of the top 100 largest U.S. companies as portrayed in large U.S. media, you can see the 80-20 observation at work in a different capacity.

Year after year, we see that 15 of American’s largest companies (such as Microsoft or Disney) collectively capture the same number of stories as the rest of the largest 85 U.S. companies pooled together. There’s a strong likelihood for large media, such as the NYTimes.com, USAToday.com, CNN.com, to cover these 15 companies, while overlooking the remaining 85. From year to year, the top 15 companies change, but it’s always (approximately) the top 15 that captures half of all news.

On the Cision Index graph below, you can see that the shape of the curve formed by each company’s number of stories remains virtually the identical from 2002 to 2009, even as the media in the study gradually shifted from print to electronic media.

It’s rather amazing to think that such a small number of companies continue to capture journalist attention in such a large quantity, and that comparative volume of coverage between companies is so skewed – it’s more like an 85-15 observation. You may begin to think that Wonderland is your everyday reality.

These odd social phenomenons aren’t planned by single person. They just kind of happen, like those daily chokepoints on the expressway. Do you see the Cheshire Cat smiling at you as you hit and break petal over and over?

There’s been a lot of talk in the marketing industry in recent years how the Internet is causing fundamental shifts in the 80-20 curve for sales, giving more influence to the less frequent.

It’s also possible that the Internet is fundamentally shifting business news as small companies are able to obtain a high degree of notoriety (after all, Twitter has fewer than 50 employees). But, for news about America’s largest companies in high-circulation media, there’s been no observable change in the 80-20 distribution. The curve withstood shift in medium, from newspaper to Internet, and the recent deluge of negative news related to the financial industry.

The vastness of Internet space has still yet to deliver a major shift in the number of businesses that are covered with a high degree of frequency.  I suspect what hasn’t increased is the capacity of journalists to write about more companies, especially now when most media are cutting staff.

So for now, companies that receive a disproportionate amount of coverage, such as Wal-Mart and Apple, will continue to set up their communications functions around prioritizing journalist inquiry, whereas other large corporations, with a smaller proclivity for newsworthiness, will continue to have to set up their communication functions around capturing journalist attention.

What are some of odd, maddening and inequitable things that you’ve observed about news coverage in your industry?

Using data from the Cision Index from 2002 to 2009, we are able to conclude that just 15 of American’s 100 largest companies (by revenue) collectively receive half of all news coverage. The remaining 85 largest U.S. companies share the other half.  This trend has repeated itself throughout the decade despite huge medium shifts in the news industry.

Data has been collected from America’s largest 30 news and business publications and has been normalized to account for yearly updates to media lists.

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