BuzzFeed founder and CEO Jonah Perretti.

When people hear the traffic figures for big blogs and blog networks, they assume the sites must be swimming in money. How could they not be? With hundreds of millions, if not billions, of impressions annually, one would think that revenue would automatically follow.

But it doesn’t.

At the time of its acquisition in February 2011, the Huffington Post was earning roughly $30 million a year in revenue. Later in 2011, as the site began pulling in more than 1 billion page views a month, the site’s revenues were reportedly only $40 million. In 2012, Business Insider had revenues of only $10 million (up from 2011, when it reported a profit of, no joke, $2,127). And though eight figures in revenue is still a lot, consider that BI has more than 24 million unique visitors per month.

By comparison, in 2012, The New York Times company had revenues of nearly $2 billion. For all the talk of the death of the newspaper, you could take all the annual revenues of most of the big blogging empires combined, subtract them from the Times’s income statements and the paper might have to tell Wall Street that it had a bad quarter.

The point is this: the blogging model of “Oh, we’ll just get as many page views as possible and then profit” clearly hasn’t worked out. Like, at all.

For those of you who are only peripherally involved in the media business, the death of the page-views-as-profit model is why you’re beginning to see a lot of chatter about a new form of advertising called native ads. Since the market is flooded with more inventory than could ever possibly be purchased, CPMs (the amount advertisers pay per thousand impressions) have been driven essentially to zero. Now, desperate to generate cash, blogs have to create new kinds of inventory.

The controversial Atlantic advertorial.

Some sites call it “native advertising.” Some call it “sponsored posts.” Some call it “advertorial.” But regardless of the name, it’s based on short-term thinking and built almost exclusively on industry hype. It’s not a long-term strategy; it’s just a way to juice dumb media buyers for cash—or in other cases, to create just enough semblance of a business model to convince dumb brands to acquire them.

To back up for a second, think about how the fashion business works: a designer creates a couture or high-end fashion brand that is highly sought-
after (it could be Gucci or it could be Ecko Unltd.). The first phase of growth comes from selling a product directly to customers or to retailers like department stores. Then investors see an opportunity and swoop in to “license” this brand. The next thing you know, there is a sunglasses line in China, a home decor line at Macy’s or Kmart, or even an Eddie Bauer-style car edition.

If the brand is strong, it can withstand this dilution (think: Ralph Lauren or Calvin Klein); if it isn’t, it quickly booms and then busts (think: FUBU). The problem comes when weak brands attempt to squeeze too much money out of their business by licensing too much too quickly.

And that’s what we’re seeing online right now.

For the last few years, sites like the Huffington Post, Gawker, Business Insider, The Atlantic, Politico, AOL and others (including Betabeat, to some extent) have directed all their efforts at increasing page views at the expense of the reputation of their brand (see: crappy slide shows, wild speculation, worthless gossip and untrained writers). Now they’re suddenly trying to leverage that “brand” to develop other revenue sources.

And they’re hoping that advertisers and investors will be dumb enough to go along with it.

On one end of the spectrum, we have our old media brands that rushed to the web.

Take the naked greed of a site like Forbes.com. In Forbes, we have a 100-year-old media brand that has spent the last few years opening up its platform to literally any “contributor” who wanted to post there—and, in fact, paying many of these writers per page view generated. As a result, the site’s traffic has doubled since 2010—blowing past sites like Bloomberg.com and Businessweek.

But at what cost? Is Forbes.com the same as Forbes the magazine? Certainly the Forbes family never would have published articles like “Top 10 Best Horror Movies Of The Last 2 Years,” “6 Ways to Burn Your Belly Fat Fast,” “Do I Buy Apple On Monday?” and “Glenn Beck Just Doesn’t Get America’s Strong Character” (all abysmal pieces currently atop its most-read list). And yet Forbes.com turns around and tries to sell editorial privileges to advertisers for $75,000 a month.

Think about the insanity of that position. Essentially any writer can publish on Forbes.com (I currently know at least 10 different writers who do so, and I have done so myself), making it no different from any other free blog network, yet Forbes maintains that it’s a premium brand that other brands should pay to be featured on. Do you know who would buy that? An idiot.

Or take The Atlantic and its traffic-trolling sister, TheAtlanticWire.com. Here we have another venerable media brand that publishes all sorts of link-baity stories designed solely to generate traffic. When one reads a story on TheAtlantic.com or TheAtlanticWire.com, you’re not getting the same magazine for which Mark Twain once wrote, you’re getting the same stuff you can find on any blog (with the exception of Ta-Nehisi Coates, of course, who is amazing). For instance, over the weekend, as I spent time thinking about and working on this column, AtlanticWire blogger Connor Simpson churned out 13 posts in two days. That is quantity over quality embodied.

And yet The Atlantic turns around and sells “sponsor content” to advertisers, whose main appeal is that readers hardly notice the difference between editorial and advertising content. Why would you even want to trick people into thinking your ad was produced by one of these quantity-over-quality bloggers? (The Observer also sells sponsored content on Observer.com.)

On the other end of the spectrum are sites like Business Insider and Gawker, which are licensing their names in foreign countries. In 2013, both announced separate deals with The Times of India to create versions of their sites in India. Gawker already has similar deals in Brazil, the U.K,. Japan and Hungary.

Like I said, I thought your brand had to be worth something—had to mean something—to be worth licensing.

Somewhere in the middle, we have BuzzFeed. BuzzFeed is essentially the same content that Jonah Peretti pioneered on the Huffington Post—pictures, gossip and cute viral news—that sells for fractions of a penny per view at the Huffington Post. These rates are well established and well known. Yet, dressed up as “native content,” those same posts are being packaged to brands like Virgin America at $100,000 per month. As Virgin all but admitted to New York magazine in this month’s big profile of BuzzFeed, these ads aren’t really effective—they’re just shiny and new.

In other words, these sites are trying the same type of hustle they pulled last time, having already exhausted the hustle that came before that. As CPMs have slowly dropped and settled at their rock-bottom rates, online publishers have begun to realize that they will never be nine- or ten-figure companies with business models as simple as Ad inventory x Price per view = Revenue. So they’ve come up with made-up stuff for which they can charge made-up prices. How long will that last?

It’s a shame. They’re spending all their energy coming up with the next advertising con when they could just put some effort into making a product that readers, you know, believe is worth paying for.

editorial@observer.com

Though many were shocked at the news last week that uber-blogger Andrew Sullivan would be leaving The Daily Beast, opting out of the endless chase for pageviews and switching his blog to a subscription model at $19.99 a year, they shouldn’t have been. It’s nothing new...at all.

Like some inexorable law of physics, journalism has long followed a cycle: For awhile tries to give the news away (or sell it cheap), generally driving the whole profession into the toilet in doing so. Then suddenly the industry rediscovers the long terms benefits and calming effect of selling the product by subscription or otherwise serving its most loyal customers.

It's a whipsaw effect born mostly out of our impulse to embrace new technology without questioning its implications. The cycle, when you look at it, is almost comical.

Originally, the earliest newspapers (founded or connected to political parties) had solid subscription bases from party members. Then, exploiting newfound mass printing technology around the time of the Civil War, papers—actually called the Penny Press—switched to the Cash & Carry method. Think: a newsboy offering cheap papers filled with ads to busy pedestrians.

If you recall, this had tragic social consequences. One-off sales, though lucrative, often depend on sensationalism, fear-mongering and scandal, because those are the things that break through the noise. They pump up circulation. End result: yellow journalism and the Spanish American War.

Readers and writers and publishers became exhausted and disillusioned with it. When Adolph Ochs took over the New York Times in the 1890s, he came up with the slogan: "All The News That's Fit to Print." The runner up? “All The World's News, but Not a School for Scandal." Shortly thereafter, the New York Times was the first newspaper to solicit a subscription via telephone. And it was this model that dominated the industry for most of the 20th century—a daily newspaper delivered to your door.

It's what gave us investigative journalism, Woodward and Bernstein and the Pentagon Papers. There were downsides of course, as Noam Chomsky has noted, but for the most part this system works. Why? Because publishers who deliver a product to paying customers every day need to care about quality and truth. If they don't, subscriptions dry up.

 Flash forward to recent times and we get the same old naivete: new technology makes mass distribution cheaper and easier. The internet discards subscription and paid models to embrace the one-off visitors from search engines, social media and web surfers. The news is free, and to survive, each story must get many pageviews and earn advertising revenue. The result: celebrity slideshows, trolling, linkbait, pseudo-news, conflicts of interest and whatever will get you to click the headline.

The difference between the economic model of the Penny Press and today’s free blogs is, well, a penny. What you read online is free, but yellow newspapers basically were too—the real revenue was in advertising. The two models are otherwise identical in approach, style and shamelessness. And more important, those papers and today’s blogs sell themselves the same way: by shouting louder than their competitors. The distinction between a busy street corner or the crowded pages of Google News is not a big one.

In Los Angeles in 1921, a circulation battle between two newspapers essentially wrecked the career of international star Fatty Arbuckle with a false scandal. It was a stunning wake-up call to the industry and the public. In 2011 and 2012, we saw Julian Assange in similar crosshairs: the same blogs and papers who made him a newsworthy figure suddenly jumped on similarly unproven allegations. Adam Lanza’s brother was wrongly identified by bloggers and reporters all hoping to out-scoop each others.

Like I said, it's a cycle.

That cycle is a little like an ugly drunken hookup: we wake up the next morning and cannot believe we let it happen. News sold cheaply is rarely news done well. News that's given away for free to readers who click whatever headline catches their attention? Even worse. It might be more profitable in the short run, but it is not sustainable.

The bitter fight for circulation hits rock bottom somewhere, and the journalists in that system grow to hate what they have become.

Andrew Sullivan, in his announcement last week, described subscription as the "purest, simplest model for online journalism: you, us, and a meter. Period. No corporate ownership, no advertising demands, no pressure for pageviews ... just a concept designed to make your reading experience as good as possible, and to lead us not into temptation."

It's fitting that the New York Times, roughly 100 years after making the industry-shifting bet on subscription, is the one rolling out the web's first truly successful paywall. I like that entrepreneurs like Marco Arment are contributing with products like The Magazine. Bloggers are starting to see the undeniable truth: the one-off/ad model is inherently compromising and precipitates a race to the bottom.

The approach does real damage, whether to public figures or to our public discourse. The lean model of journalism practiced by blogs and, increasingly, by cash-bleeding legacy newspapers, is not really any cheaper; the costs are just externalized onto everyone else. You and I subsidize that crap with our time, our energy and our emotions.

Journalism requires a subscription—loyalty between producer and consumer. It's the only model where the incentives of the publisher and the readers are aligned, where they both are committed to delivering value to each other. Of course the hybrid model* works too, because money still changes hands somewhere. Otherwise the “customer” for the news is advertisers, and advertisers just don’t give a shit. (As someone who buys millions of dollars worth each year, I can tell you the only concern is whether buy makes its money back.)

Would TechCrunch get it wrong less if it had a paying readership of young tech types?

Would Gawker be tolerable if it cared about something other than itself?

Would Huffington Post increase in quality if its customers were you and me instead of Google bots?

Yes. Yes. Yes.

So let's not call Sullivan's move an “innovation”. Or herald the New York Times' for its bold leadership. Because none of this is new. It's not an advance, it's a retreat from a foolish venture by tech folks who didn't bother to look at history.

Let’s stop ignoring the costly lessons of the past. There is a long precedent for the subscription model—hundreds of years of it, in fact—but whatever. These recent moves should send a message that the delusional experiment is over and the rest of the serious blogosphere can give it up.

If you’re doing celebrity gossip or self-help, whatever. Keep giving it away because it isn’t worth much. But if you want to create real, quality journalism that helps people and delivers truth, it’s time to face facts. Switching to a subscription model is not a stunt, nor should it be a negotiating technique as some writers claimed.

It is the only way that real journalism can work.

*The Observer is an interesting hybrid of a local subscription and newsstand paper with a free web presence. The subscription component, in my view, acts as a partial governor against the damaging tendencies of pageview journalism.

Ryan Holiday is the bestselling author of  Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers. Follow him on Twitter: @RyanHoliday.

But other than that, the assumptions of publicists, clients and journalists—that being featured matters, that being written about will drive awareness or sales or public image—are a collective chimera. The widespread belief is that the media has "reach."

Trust me, they don't. Not anymore. It's become almost pathetic.

It hit me the other day when I snagged a profile for a client on a well-known website. The day it ran, the editor sent me an email: "Hey, we hate to ask but could you guys be sure to tweet and share the article for us?”

Dear God, I realized, my client has more readers than they do. The website needed us to attract an audience for them. They wanted the subject of the piece to send his readers over to them rather than the other way around.

This is our new media reality.

Today, after a media outlet or a blog writes about someone or something, the outlet typically engages in a frank discussion with that subject on how they can promote the piece together. The bigger the draw or online presence of the subject (whether an individual or a brand) being written about, the more conflicted the media is. A publisher can hardly expect to do solid journalism when the real reason they’re agreeing to the article is because the person has a lot of Twitter followers or a big email list.

The problem is, unlike the old days, when a media outlet could count on a set number of subscribers or tune-in viewers or newsstand sales, online there is more competition for everyone’s attention and no guarantee of anyone seeing what gets published.

Check out Forbes.com or Business Insider, two sites honest (or stupid) enough to show their pageview stats. Despite the sites’ huge viral reach, it’s not uncommon to catch articles with 250 views. Or 25. Or 2. Gawker has a better floor, but from time to time you’ll see a post do less than 1,000 views. Sure, these numbers are better than nothing, but these sites claim to have millions of “readers” each month. Many sites get far less. Which means that placing an item (as we used to say) is akin to pissing in the wind unless you’re willing to do the extra legwork of promoting it’s existence.

Check online versions of articles from some major magazines and you’ll notice the same thing: Most pieces draw zero comments (another way of saying nobody read it or cares). It’s true for this column as well: if I don't get it started on social media, there is a risk it could go unnoticed.

In an environment with zero publishing constraints—where it doesn’t cost anything to publish and there is infinite editorial space—most modern media outlets have adopted the simple but self-defeating strategy of publishing everything they possibly can. Translation: throwing a bunch of shit at the wall and hoping something sticks. Well, most doesn't.

Unsurprisingly, readers have an awkward relationship with this kind of content. Mostly, they don’t value or trust it much. So nobody—or basically nobody—reads Business Insider every morning. They read articles from Business Insider (or Politico or Buzzfeed or Huffington Post or Bleacher Report), in a one-off capacity. Most readers have probably never even seen the home pages of these sites.

Pulling up one site and browsing for good stuff is increasingly rare. Instead, we read the links that get passed around or come up in web searches. Or we see them on aggregators like Reddit or Google or Yahoo News. In other words, we’re an audience of glancers, and sites have to do whatever it takes to catch our eyes.

Aside from the obvious implications of this One Off reality—which mostly means more of the kind of content that is easy and fun to share, like BuzzFeed listicles—it undermines an important power once reserved by media outlets. They used to have an audience they served and could count on. This gave them an upper hand when it came to what or what not to write about. It allowed them to preserve an editorial mission and perspective.

Either that or was necessary illusion, because when nobody really knew how many old media subscribers actually plowed through that 7000 word feature on Richard Gere, we could at least hold onto hope. The media was in the driver’s seat because there wasn’t sufficient evidence to dispute their right to it.

Today, when stories risk going unread or unnoticed, the subjects of such coverage must ask themselves why they should bother cooperating at all. (For a small business, the equivalent is when Groupon or LivingSocial asks you to advertise their offer to your existing customers. Um, I thought you had your own audience and if you don't, why are we working together?) The purpose of getting media is exposure, to spread the word through an impartial source. If the media no longer has a dedicated audience, what good is it? Why would Taylor Swift (21.3M followers) ever need the New York Times (6.7M followers)? In the future, the Times might think twice about bashing Guy Fieri, considering he’s got nearly 1M of his own followers, a television platform and I’m sure an enormous mailing list.

As PR person, this means I’m doing two jobs. I take one of my clients and get them an excerpt or an article or a guest post on a "respected" outlet and then also have to drive an audience to it if I want people to know that it happened. Why not cut out the middleman and publish myself?

Simply put, it’s more effective to borrow a publication’s name. It makes an article seem less self-serving, more objective. And the website goes along with it because they need the pageviews. We create the news and then launder it via your “trusted” media outlets.

The saddest part is how the desperation for traffic makes media brands so easy to hijack. Marketing firms—the smart ones, anyway—will get an article published, then drive tens or hundreds of thousands of "visitors" to it through paid traffic sources like StumbleUpon in order to make sure that the article seems like a hit—driving it to the front page or most popular lists. (The same happens on YouTube, where the first 50-100,000 views might well be fake.) From here, cumulative advantage takes care of the rest.

How much longer media brands can greedily spend down the credibility that took decades to build? They sure aren’t making many deposits these days. In my view, it’s akin to a high fashion brand that started off doing a little bit of licensing with third parties but then grew addicted to the cheap cash flow. At some point, when you say yes to everything, you start undermining the intangibles that made the brand worth licensing in the first place…and the whole house comes crashing down.

It's a short term play by both parties—exploiting the difference between perception and reality. Outlets hoping to catch handfuls of the audiences they've lost their grips on, marketers and brands leveraging their own access to fans in order to get the "credibility" that comes from being featured. The result is readers being fed more crap news.

It’s going to stay that way—and getting press will continue to be of less and less value—until media outlets start thinking about a new business model.

Until then, I, along with every other public figure, brand, and business, am stuck tweeting about my own article. So please, for the love of god, share this on Facebook and Twitter for me. Thanks!

Ryan Holiday is the bestselling author of  Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers. Follow him on Twitter: @RyanHoliday.

Flashback to 2010 and the prospects were rather dim. By tradition (three decades of it), the Republican nomination was essentially assured to Mitt Romney. And he was basically boring and unelectable. Barack Obama's Presidency wasn't exciting, but it lacked any major disasters—no riots in the street, no drastic plunge into a depression or embarrassing failures—and he was generally well liked. Historically, for an incumbent, this means almost certain victory.

Why do you think both Michael Bloomberg and Sarah Palin stayed out of the race? Because they understood these facts.

What it really added up to was a potentially nightmarish situation for the media: a dull election with a very predictable outcome.

But somehow that's not how it ended up.

Conveniently, what once appeared to be in the bag morphed into a horse race (despite none of the fundamental conditions changing). Miraculously the media was gifted with endless spectacle, controversy, and twists and turns.

What happened?

Surely it cannot be said that Mr. Romney ran a stellar campaign. In fact, for most of the election he ran a campaign more embarrassing than anyone could have predicted. Nor can it be said that Mr. Obama ran a horrible one. He mostly stayed above the fray, the economy held steady during the critical months, and he killed Osama bin Laden.

No, what happened was an inevitable alignment of interests—media interests—that were not satisfied to cover a not-especially-lucrative fait accompli.

As Upton Sinclair once said, it's so very “difficult to get a man to understand something when his salary depends on his not understanding it.” The media business—paid in clicks and views and minutes—could not possibly accept that the whole thing was in the bag.

Considering that in an election cycle, television, newspapers, and blogs take in billions from advertising, receive spikes in audience, and generate free and easy news from campaigns, the lack of “understanding” is deliberate.

Let’s take a trip back in time:

Political blogs kicked things off in 2010. The reality of a barely contested Republican ticket could not be allowed to stand. Sites like Politico started following around "candidates" like Tim Pawlenty before he considered running—Talking Points Memo, Real Clear Politics and Huffington Post were highly incentivized to start the election cycle early because traffic spikes during elections. With lower standards for news, they introduced a steady stream of names for endless discussion online.

Pawlenty, Bachman, Paul, Gingrich, Cain, Gingrich again. Remember these names? Remember how important and real they seemed at the time. Where are they now? Oh right, back in the obscurity from which they were plucked.

Newspapers and television played their part too, of course. The web bred this cavalcade of clowns, but it was the mass media who paraded them in front of us. Each Republican candidate got their few minutes, each took their turn at the front like some fartlek run of idiots. It carried on until the media felt the public had tired of them—then each was destroyed by the machine that built them. A scandal, a gaffe, money troubles, whatever.

Only after the media had wrung out every drop of “news” from each of them—inflating every false second of hard-right ideological pot-stirring in order to polarize the pending contest between two moderates—could we focus on Romney. But only for a minute because then it was time to decide on a VP. Bring the clowns back out again!

Compared to Obama, Romney turned out to not be much of a candidate. I mean, here was a man—a One Percenter if ever there was one—who ran such a terrible campaign that the controversial issue of his religion hardly came up. Who needed it, what with the Olympics gaffe, airplane windows gaffe, the 47 percent gaffe, the "I like firing people" gaffe and the tax returns? That was entertaining for a while, but of course the 24/7 news cycle (and the infinite blog cycle) can only fill so much time with bemusement and scorn. Something else had to be done.

As Robert Wright successfully predicted, the debates were the perfect opportunity for the "Romney Comeback Narrative." Obama flopped! He blew it! A week later, after we’d digested that: Joe Biden fired back with an "unforgettable" performance against Paul Ryan in the VP debate. And then what do you know, Obama regroups for the final two debates and comes back with some killer line about bayonets and battleships. To to any reasonable person (or as political scientist Brendan Nyhan observed, anyone whose thoughts weren't polluted by listening to everyone else's analysis) the fact that Obama’s performance, Romney’s performance and Biden’s performance were really just average made no difference. There must be conflict, it must be dramatic.

How else can Politico, Talking Points Memo, Huffington Post, and their brethren post dozens and dozens of blog items a day? Without incessant online buzz, what will the talking heads debate? What will the newspapers round up and review?

Romney polled ahead early but then suddenly it got close until he ultimately won the nomination. Obama polled ahead early but then suddenly it got close until he ultimately won the election. How well that worked out!

If reality does not support the economic demands of the news media—then reality can be changed. When everyone in the business wants certain kinds of events, those events must be willed into existence. And then we can chatter about them endlessly and sell ads against the ensuing din. And hope that it holds us over until a real news story like Hurricane Sandy can wash all the artifice away.

For the most part, I find the politics of Noam Chomsky to be abhorrent, but when it comes to analyzing the media he's as good as they come. What I've described above was no overt manipulation, no puppet master pulling our strings. Instead, it's what's he called a Tacit Collective Action (or Tacit Conspiracy). When actors like Fox News and MSNBC, Drudge Report and Huffington Post share the same incentives and business model—despite their heated ideological differences—they cannot help but act in concert to further each other's interests. Together, they can conspire and not even know it.

That's what I see when I look at the last two-plus years of political and media coverage. I see individual actors—many of them good, hard-working reporters—react to the looming threat of a boring, low-key election by doing their little part to make sure that will never, ever happen. I see sincere voters on both sides being riled up and activated for false causes. (That is to say I fully acknowledge and understand that Romney has many real supporters. They have just been falsely strung along about their chances.)

But the media couldn’t change the results. Which, had you sat out the news coverage of the entire election, happened to turn out exactly how you would have guessed from the beginning. With a Romney nomination and an Obama victory.

How nice...for them.

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers. Follow him on Twitter: @RyanHoliday.

But when it comes to Greg Smith and the “Why I’m Leaving Goldman Sachs” meme started by The New York Times in March, the investment bank has got plenty to gripe about. According to the Times’s own research, almost all the claims made in Smith’s incendiary Op-Ed--about Goldman Sachs’s moral bankruptcy, toxic culture and love of ripping off clients and referring to them as “muppets”--turned out to be “curiously short” on evidence.

Sure, Goldman went on an all-out PR blitz to make sure we knew this, but that doesn’t mean it's wrong. As the company put it on Twitter this week, the Times took Greg Smith and "made [him] famous,” then, a few months later, exposed him as a fraud.

The trajectory of  this “viral op-ed,” as The Guardian called it, embodies so many of the ills of the media today.

The New York Times created a narrative so powerful that it generated millions of page-views, became a trending topic on Twitter and scored a seven-figure book deal for Smith. Then, months later, the paper saw no conflict in publishing an equally popular story that dismantled that narrative--without the paper having to issue a retraction or admit to any error in judgment.

Of course, the Times doesn’t have to endorse the viewpoints of every guest op-ed, but by giving space to a particular author, it is saying, “‘this person is worth your time.” It is now clear from the Times’s own research that it doesn't believe Smith was.

Did this happen because the Times and the rest of the media failed to police themselves? No, they were having their cake and eating it too. Despite its pretensions, the Times is a traffic-hungry monster like any other publisher, and polarizing stories move the needle. Outlets will do whatever it takes to get them--whatever makes the most money--even if it means creating the rumors, myths and chatter that they later shoot down.

Publish Greg Smith and get a bunch of people riled up. (Don’t vet his credibility pre-publication, of course, because then you might not be able to run it.) Then publish an article--with plenty of help from Goldman Sachs’s crisis PR department--that accuses Greg Smith of acting from ulterior motives ... and, what do you know? People are riled up again. How nicely (and lucratively) that works out!

The data justifies it. The Times is surely aware of the study of its own articles by the Wharton School of Business that found unequivocally that the No. 1 predictor of "virality" is how angry a New York Times piece makes readers.

People have criticized Tina Brown for her trolly Newsweek covers, but the reality is that all journalism today is corrupted by trolling. From Gawker to The New York Times, the game is about publishing whatever will get us to click--not about getting to the truth. In their own way, it’s almost impressive how artfully these sites can do it. Attack Goldman Sachs? It’s a perfect target, because the public has been hoping for dirt on the “evil” financial industry. Once that narrative gets stale, what’s next? Tear down the hero it built up as a vehicle for the first story. Next!

And the rest of the web blindly follows the agenda, publishing its own iterations of whatever the hot story of the moment is. Nine months ago, Goldman Sachs was the villain. Today, it’s Greg Smith. It’s all theater, and the only sincere reaction in town comes from naive readers who don’t know they’re being played.

Until the economics of the business change, we’re stuck with a model in which the press will build people up and tear them down. Our main job as readers--and frankly as human beings--should be to resist the urge to bite.

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers.

By using it when they speak to sources, journalists force the person they’re talking to to go on the record. On the other hand, it gives interviewees a fair chance to think about their answers and put their best face forward. And now neither party can accuse the other of lying. Both are forced to be relatively honest.

Problem solved.

The way I see it, if you're in PR and you don't instruct your clients to insist upon email, you should probably be fired for negligence. Every time I see a stupid quote from a public figure, my first thought is: well, somebody was an idiot and answered the phone. (For this reason, I don't answer my phone, and my voicemail instructs callers to email me. I tell my clients to do the same.) The risks of speaking extemporaneously are apparent the first time you wing it and promptly put your foot in your mouth.

Of course, I completely understand why journalists have long insisted on doing things on the phone, why they'd rather sit down over coffee. It's not to observe the subject's body language, to note the scene or convey to the reader the melodious cadence of the speaker's voice. Let's be frank: it's because they hope the person will say something juicy or unguarded or embarrassing.

What people often forget is that for the parties involved, the media game is a vicious contest. Both sides see themselves as fighters circling, looking for a weakness, trying to get an advantage, trying to come out the winner. Reporters need big stories to get traffic and make a name for themselves. Subjects have a message for the public and they want to stick to their script. Money and status are at stake for both.

Anyone who faults Romney or Obama or any public figure for demanding quote approval is missing the point. The journalists were no abused weaklings here. They made a bargain for access to these newsworthy figures that they thought was in their favor—they’re only complaining because they got caught.

Boo hoo. In sports, as in life, losers tend to cry loudest about fouls.

Though I will say that it is interesting to hear journalistic watchdogs pretend that quote or story approval is something new, it isn't. It really isn't. For Christ sake, John D. Rockefeller often insisted on it—and got it. I don't think it's a coincidence that as the economics of the news has regressed to where it was in the early 20th century, so too have news practices. Yellow journalists were fine with quote approval, and I guess today’s yellow journalists are too.

That's why The New York Times’s conspicuous decision to ban quote approval only after the recent uproar  is so disingenuous and pathetic. In fact, it's the kind of "ethical behavior under duress" that reporters gleefully criticize when politicians, celebrities and brands get caught. It makes it very hard for me to see this decision as sincere, or to believe that the Times will enforce the policy.

I mean, how could the Times really be that against quote approval? It sure doesn’t seem to be all that opposed to the other kinds of fake news. Like the kind that comes from the service Help a Reporter Out.

Earlier this year, I did an experiment to prove that the popular "Help a Reporter Out" was just a factory for producing cheesy quotes from pseudo-experts—where journalists cavorted and bartered with "sources" to generate stories that would get lots of web traffic. The New York Times was implicated, and its response says it all.

It quietly issued a correction to its embarrassing trend piece, but made no policy changes and did not disclose any of the practices behind the problem. (Same goes for the other outlets involved: Reuters, ABC News, Today and countless blogs.) They had featured me prominently despite the fact that my expertise was completely made up. Nobody fact-checked, nobody even bothered to Google me (or they would have seen that I had written a book about media manipulation).

Future exposure to such deceit could have been prevented by a simple ban on the service. To date, no media outlet that I know of has taken such a stance. In fact, the Times has dug in and defended using HARO (even as it removed the quotes from its story). As their spokesman said as part of a statement to The Observer at the time: “We have no written guideline that would say specifically to verify a source like these online ‘experts,’” but that they assume it was covered as part of their general policy. Except it clearly isn’t.

The New York Times and many other blogs and media outlets continue to use HARO for the same reason they previously tolerated (and many will continue to tolerate) heavy-handed quote approval. Many reporters have figured out that being an adversary doesn't generate as many clicks as being a collaborator. They don't see their stories as vehicles for the truth but as page-view magnets—and it's faster and easier to work with the people they write about to make sure they both get as much visibility as possible.

And that’s what quote approval is at its core: the media and media subjects conspiring to make the news that makes them the most money. In the age of the click, both want as many of them as as possible and are willing to collude to get a story that they can both promote. Both walk away winners.

Who loses? Well, readers. Because the news they is get is the fruit of this self-righteous but very poisoned tree.

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers.

“What actual reporting can you possibly do that delivers anything of value more than the infomercial—light on the info, heavy on the ’mercial—that the conventions have become?” he asked haughtily. To Mr. Jarvis, sending so many reporters to cover an event—one that nominated a major contender for the President of the United States of America—was a self-indulgent waste. He marveled at the many other, more meaningful things they could have covered instead. His question: “Can we in the strapped news business afford this luxury?”

No, I suppose we can’t. And if we can’t, perhaps we should also strike a far more egregious expense from our news budgets: covering Apple press events. You know, the twice or often thrice yearly events that bring everyone out to Cupertino, where they stand in line and contribute a few licks to the collective rim job the press loves to give Apple. This three-decade-long media mainstay has reached its frenzied apogee in recent years. That may explain why Apple’s Wikipedia page is now tattooed with well over 50 variants of “announced” and “introduced” (compared to Microsoft’s 7, and Dell’s 19).

Which is why I find it so funny that Mr. Jarvis—a technology enthusiast to put it mildly—is critical of the “commercial” coverage of politics. When you look at how many words the tech-savvy media pours out in honor of every new Apple product launch you can almost be forgiven for forgetting what really happens at them: nothing. At the company’s breathlessly covered conference last week, Apple announced that it, a corporation that sells smartphones, would be selling a new version of its smartphone in a few weeks time.

Wow!

What is an Apple press conference really? It’s a staged pseudo-event where the lazy media and a powerful corporation conspire to pad each other’s coffers. Which is what makes it so hypocritical when bloggers and critics like Mr. Jarvis complain about the kabuki nature of political conventions—because they seem to have no problem with the actual commercials that pass for news content. It’s as if Apple says to reporters: If you promise to cover it with endless credulity, we’ll stage a party you’ll never forget. And the media says: Hey, could we do it a few times a year? It’s great for pageviews.

 And, goddamn if its not incredibly lucrative for all concerned. Apple, for its part, is able to spend a fraction of what its competitors spend on advertising each year because it’s granted so much free press. For instance, Microsoft spent more than $1.9 billion dollars in 2011 on advertising, and Coca Cola spent more than $3 billion. Apple? They made billions more than both, with an ad budget of just $933 million—or less than 1 percent of the company’s revenue.

Apple doesn’t have to pay to tell people about its products, because the media dresses up the company’s product messages and presents them to the public as “news.” As the Huffington Post properly described it, Apple’s marketing strategy these days is essentially “hold off on the advertising, just sit back and let the media go hog wild.”

Meanwhile blogs and newspapers make no secret of the fact that Apple announcements are responsible for some of their biggest traffic days. Ars Technica, owned by Conde Nast, put out a press release last week bragging that its liveblog of the iPhone 5 launch "shattered traffic records.” In fact, Technica developed a proprietary blogging platform just to handle this spike (more than 15 million pageviews, or 500 percent greater than an average day). And when traffic, tweets and searches jump, every other publisher rushes to ride what an editor at the Christian Science Monitor once called the “Google wave.”

The result is fawning, marketing schlock that passes for news, online and off. And nobody, particularly blogs, wants to point it out because it’s all too lucrative. Democrats or Republicans look too rehearsed on stage? Let’s pounce. Apple? Let’s sweep it under the rug. Of course readers click posts about shiny new technology—these days it’s the only game in town.

The recent book Millennials, News, and Social Media: Is News Engagement a Thing of the Past? by University of Texas-Austin journalism professor Paula Poindexter studies how millennials perceive the news today. The words they used most often: “useless,” “boring,” “biased,” “propaganda,” “lies,” “garbage,” “crappy.” I can’t think of a better set of adjectives to describe the type of coverage we see each time Apple calls in a chit and the media rushes out to do the the company’s bidding.

To be fair, this doesn’t begin or end with Apple. We see the same fawning, online news-manufacturing over commercial events each year with CES, SXSW, and a host of other sponsored conferences put on by everyone from TechCrunch to the Wall Street Journal’s AllThingsDigital.

Why do reporters love these commercial dog-and-pony shows? Why do they inflate the significance of such events through excessive coverage? Because attending a two-day conference might rack up a few weeks worth of easy stories about sexy new gadgets, plus with every investor, celebrity, brand and executive temporarily in one place, bloggers can grab interviews or prep puff pieces without having to do any legwork. (Plus who doesn’t want a free trip outside the office?) In other words, reporters know full well that everything has been staged for their benefit, but since they have traffic and post quotas to meet, they gladly accept the subsidy

The media and the public are supposed to be on the same side. The media, when it’s functioning properly, should protect the public from marketers and their ceaseless attempts to trick people into buying things.

But that’s not true today. As a marketer, I can tell you, the media is working with and for people like me—not against us. PR flacks and journalists are generally on the same team—when the reader is tricked into giving up their attention we both win. What’s worse is that most readers hardly even know what’s going on because the content they get has been dressed up and fed to them as news.

So before critics follow Mr. Jarvis’ lead and jump on political reporters for spending precious resources actually covering political events that include real nominations and real voting and that have a real impact on our democracy—and for having the gall to do it in person—we should reconsider how much time their colleagues spend covering trivial product announcements the same way. We should consider how much free advertising press outlets give to corporations in exchange for photogenic stunts. And ask ourselves: which is the more insidious and damaging to our culture?

Because look, I like Apple as much as the next guy. I wrote this article on a Mac and I researched it using my iPhone, but as far as I’m concerned, Apple and its multi-billion dollar cohorts should have to pay to market those products. They can afford it.

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers.

It’s no conspiracy. Facebook acknowledged it as recently as last week: messages now reach, on average, just 15 percent of an account’s fans. In a wonderful coincidence, Facebook has rolled out a solution for this problem: Pay them for better access.

As their advertising head, Gokul Rajaram, explained, if you want to speak to the other 80 to 85 percent of people who signed up to hear from you, “sponsoring posts is important.”

In other words, through “Sponsored Stories,” brands, agencies and artists are now charged to reach their own fans—the whole reason for having a page—because those pages have suddenly stopped working.

This is a clear conflict of interest. The worse the platform performs, the more advertisers need to use Sponsored Stories. In a way, it means that Facebook is broken, on purpose, in order to extract more money from users. In the case of Sponsored Stories, it has meant raking in nearly $1M a day.

It doesn’t end with Facebook, either. Being broken pays off, so social media is often deliberately broken. In fact, nearly every major social network, site or app has greedily pursued this logic.

Why are there so many fake Twitter accounts—accounts that can be bought in increments of 1,000 for less than $20? Because during their hot growth phases, social networks had to post continuous user growth. They had to show how many accounts were being created. And with billions of dollars at stake, they weren’t exactly motivated to eliminate fakes.

Why can’t you browse Craigslist listings on Google Maps? Well, for some reason, Craig appears to be personally reluctant to innovate. Which would be fine, except he won’t allow anyone else to innovate, either, because it threatens his company’s lucrative position as the lazy but dominant listings network. Earlier this year, he went as far as to sue the much-loved service Padmapper for rolling out the kind of features Craigslist should have had years ago, thus keeping housing search broken and all of us dependent on Craig.

Why do blogs publish hoaxes and hit pieces so often? So they can post “corrections” after benefiting from the rush of traffic from the sensational first draft. The upside is traffic, the downside is … more traffic. Take the recent Shell Oil Hoax, which was orchestrated by Greenpeace, and which Gawker Media fell for. Gizmodo, Gawker’s sister site, broke the fake story: “Malfunctioning Cake Ruins Party and Spews Liquor All Over Oil Tycoons” for a quick 30,000 pageviews. Later in the day, Gawker got around to debunking the story their sister site had created the market for with a post called “Viral Video of Shell Oil Party Disaster Is Fake, Unfortunately” that earned three times as many viewers.

It reminds me of that episode of The Sarah Silverman Program where she discovers that the same manufacturer makes her potato chips, toilet paper and diarrhea medicine. Her conspiracy was more visceral, but it’s the same con that social media has discovered: cause a problem, then market the solution.

When users are not paying for services up front, the publisher must extract a “cost” somewhere. Online, this cost is our attention, our time. We pay for social media with pieces of our lives—whether it’s because a blog baits us into reading something or a game tricks us into sticking around long after we should have left—and these bits of life are sold to advertisers, literally, for pennies.

Right now, the purveyors of these tactics are riding high. Like Facebook, they admit that this is the game and say, in effect, what of it? Pay us or leave.

Earlier this year Forbes writer Jeff Bercovici grew frustrated with the popular game app “Words with Friends” and a glitch that allowed users to cheat very easily (guessing words an endless amount of times until the app said they’d found one). Since there is no penalty for being wrong, players can “win” without actually knowing any words—and other users have no idea whether or not their opponent is cheating. Mr. Bercovici contacted Zynga, the maker of the game, to see what they would do about it.

Their reply is typical, proving how casually and openly publishers acknowledge breaking things on purpose.

“I don’t think it’s a problem to be fixed,” the founder said, despite the complaints. “We always intended it to be that way.” Though they know how to eliminate the loophole, one fact holds them back: it would “[take] away a little bit from the framework that’s contributed to the success of the app.”

Thankfully, we know where this short term mindset gets us. Remember Myspace? Remember how clunky the site got, how many pages you needed to load just to login? Myspace pioneered the “broken on purpose” model. As it grew more popular, users clamored for improvements—improvements that the company’s engineers discovered were being blocked by Rupert Murdoch and News Corp. Mr. Murdoch had a $1 billion revenue target in mind for the network, and reducing page loads, even frivolous ones, shrank advertising inventory and took the company further from those goals.

Publishers who follow in its footsteps may soon join MySpace in the dustbin of history.

Ryan Holiday is the bestselling author of  Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers.

Ed Johnson

The state of journalism is bad. Of course, Jonah Lehrer and Fareed Zakaria—high-profile writers at The New Yorker and Time, respectively—were recently exposed as frauds and plagiarists, but that’s not the worst of it. Not even close. The phone-tapping scandal that nearly imploded NewsCorp’s news division last year? Nope.

In fact, nothing illustrates the distressing state of affairs more clearly than the reaction to Judge William Alsup’s recent order that Google and Oracle turn over the names of the reporters and bloggers whom the two companies had paid for potentially positive coverage supporting their case in a high-stakes copyright lawsuit.

Wait, what reaction? Oh, you didn’t even hear about this?

Don’t worry, you didn’t somehow miss the stunned denunciations from the media elite. You didn’t miss the outraged editorials by the Poynter Institute and Columbia Journalism Review. Because they didn’t happen. Just as Sherlock Holmes gets his clue from the fact that the dog didn’t bark in “The Hound of the Baskervilles,” the lack of outcry is actually the sound of every insider in journalism tipping his or her hand. Reporters taking bribes from major tech companies in Silicon Valley? Old news!

The corruption is endemic. Take Michael Arrington, founder of TechCrunch.com, which sold to AOL for $25M in 2010; his bold editorial stand last year caused him to be ousted from the site he started. What was that stand? Simply that he was perfectly justified in simultaneously launching a side business called CrunchFund, which would invest venture capital in the very same startups his immensely powerful blog covered. It would be hard to imagine a clearer conflict of interest, but most of his peers eagerly took his side.

Some, like former TechCrunch editor and tech journalist Sarah Lacy, even followed his lead. This year, she founded PandoDaily, a new technology news blog. Investors include Marc Andreessen, Peter Thiel, Tony Hsieh and Chris Dixon. If those names sound familiar, it’s because they are the owners, founders or funders of the biggest companies in tech—outfits like Facebook, Zappos, PayPal, LinkedIn and Foursquare. Mr. Andreesen is also an investor in the news website Business Insider. (Full disclosure: The Observer Media Group is partially owned by Josh Kushner, a principal in the investment firm Thrive Capital, which funds a number of start-ups.)

What happens when the robber barons once again not only pull the strings of the industry, but also control the press that is supposed to cover it and hold them responsible?

At the end of the day, it’s these guys who are the real “customers” of the news outlets: not all of the readers out there, but the marketers, advertisers and investors to whom journalists are trying to a deliver product—that product being you and your attention.

So while the outcry over small ethical lapses like Mr. Lehrer supposedly “plagiarizing himself” or making up a few quotes sucks up all the oxygen, they are in some sense a distraction from the deeper systemic issues. The media focus on these token misdeeds is a way of convincing the public that the truth still matters—an effort to distract from the truly appalling economics of the news itself. It’s not enough that blogs and fledgling newspapers are putting themselves in an unethical position by taking money from the people they cover. In today’s world of page-view journalism—in which writers are compensated by how many times their posts are viewed—every article is in some sense a conflict of interest.

Think of BleacherReport, a consortium of sports blogs, that was just acquired by Turner Broadcasting for $180 million. BleacherReport, like many blog empires, pays its contributors in part based on page-views. (Meanwhile, some unpaid writers are compensated merely with “exposure.”) In other words, an incentive is created to write articles that get a lot of traffic, not articles that are necessarily “good” or, say, “true.” Intelligent readers are known to disdain the more craven methods sites use to drive traffic—particularly the breed of “entertaining slideshows” that Bleacher trumpets in its slogan—but publishers love the money it brings in from pay-per-impression advertisers. And the reason BleacherReport encourages its writers to chase this sort of page-view growth strategy is that its investors demand it.

This is what I mean when I say every article on these sites has a conflict of interest. The goal isn’t to do worthwhile journalism, it is to profit. BleacherReport, like nearly every site from Gawker to Business Insider to, yes, Observer.com, wants to show hockey-stick growth. Then, should they wish to, they can sell for a profit. Just business, of course. But it warps what they write about and how they write it.

But the media is happy to have readers focus on Mr. Leher and Mr. Zakaria, like they're the real problem.

I’ve been around the underworld of PR long enough to know that multibillion-dollar industries love to focus on isolated incidents as misdirection. It’s always about the rogue trader, the “unpreventable” disaster or the overzealous campaign flack.

The ensuing hand-wringing and self-flagellation generally prevents anyone from bothering to probe any deeper. To go back to the dog analogy, they’ll never bark at institutionalized backroom dealing or insidious incentives, because that’s what they’re comfortable with.

Recently, a writer for the Poynter Institute tried to dismiss some of my criticisms of the online-driven media cycle by asking his readers “Are you interested in hearing about the sausage [being made] from the guy who keeps dropping mouse feces into the grinder?”

Well ... I would hope so. Who better to tell you what's what?

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator and a PR strategist for brands and writers.