PHD Perspectives: News Coverage Impacts Consumers' Economic Optimism and Pessimism - Emily Vanides - MediaBizBloggers

quotForeclosure epidemic reaching more expensive homesquotquotUS budget deficit hits record 14 trillionquotquotWages could hit steepest plunge in 18 yearsquotquotHow Wall Street will kill the recoveryquotThis is just a sampling of recent headlines in the media You can39t turn on the television log onto the Internet or open up a newspaper without hearing something negative about the economy It39s a wonder that more of us aren39t packing our lunches for work making our own clothes and saving our precious little bit of extra money underneath our mattressesPart of the reason that I haven39t resorted to this behavior besides my nonexistent sewing skills is that as a media professional I understand that while these headlines might be factbased they are purposefully alarmist and negative And they are alarmist and negative because this is what quotsellsquotThis is hardly a new tactic Meteorologists have been employing this approach for years now If there is a slight chance that a rain shower might become a tropical storm or that snowfall might become a blizzard it39s the worst case scenario that becomes the meteorologists39 headlines no matter how miniscule the likelihood is And giving credibility to the phrase quotperception is realityquot these headlines get spread around through the public via word of mouth This can often lead to people making beelines to their grocery stores to stock up on candles and canned food items in order to prepare for a natural disaster that never comesquotNational disasterquot is not a bad description of the current state of our economy But how much have consumers39 perceptions of the economy were influenced by journalists39 quests to make headlinesAt PHD we are conducting a monthly study called the Return Of Consumer Optimism that explores consumers39 purchasing behaviors and their optimism toward the economy We39ve seen a strong relationship between the tone of the news and consumers39 sense of optimism amp8211 the more negative the news coverage the more pessimistic people feel about the economy A key finding of the study is that knowledge is power Consumers that are informed about the state of the economy from a greater variety of news sources tend to be more optimistic about their own personal financial situations as well as the country39s outlook The reverse is also true the fewer news sources that people rely on in order to learn about the economy the more pessimistic people feel about the economyThe immediate result from the negative economic hype and occasional hysteria might be increased sales and profits However there appears to be a domino effect to this publicity This pessimistic perception of the economy leads to decreased consumer spending which in turn leads to less expenditures by advertisers And the end result isamp8230less revenue for the media in the long runThe news editors might want to start thinking a few moves ahead and be a little more farsighted the next time they are tempted to publicize that the sky is falling I would certainly appreciate it so that I don39t have to learn how to sewEmily Vanides Vice President Group Director of Research PHD Media an Omnicom Company You can follow PHD39s Twitter feed at httptwittercomPHDisSmartMedia

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PHD Perspectives: News Coverage Impacts Consumers' Economic Optimism and Pessimism - Emily Vanides - MediaBizBloggers

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