Does the global economy run on fake data?

The picture below shows the distribution of an evening newspaper at London Bridge Rail station in London on a typical weekday. Every evening, thousands of copies are dropped off at the station, the paper is free for anyone to pick up and take away. And most evenings a large proportion of untouched and obviously unread papers are collected later during the evening by a recycling company.

Newspaper distribution in London
Newspaper distribution in London, how many copies are really read?

Well, the media distribution data story is well known for decades. Advertisers are shown actual print numbers which are audited. What can’t be measured is actual distribution and readership numbers. Newspapers and magazines are kind of in competition to inflate numbers to get more advertisers and get better money per advertisement. But media isn’t the only place where fake data keeps business running. Advertising though remains a big area where fake data thrives.

Earlier this year the New York Times covered a story on how celebrities, athletes, pundits and politicians have millions of fake followers and some of them have bought these fake followers. Brands are taking notice; the BBC recently had a report that brands are taking a stand against “influencer marketers” who exaggerate their social media clout to earn more money promoting products.

But that is just one part of the story, how easy it is manipulate the data? Last year, a Garden shed become the top-rated London restaurant on TripAdvisor, obviously it didn’t exist in any form as a restaurant. And it became the top restaurant, not just in the top 50 or top 100 but the top one. Should you really believe reviews?

And then there are dating websites. A lot of reviews claim that most are laden with fake profiles. And at least one popular site doesn’t let you delete your profile until your subscription runs out or until you completely forget about your profile. Fake data feeds even more fake data.

CNBC had a report that trending videos in India on YouTube are often overwhelmingly hoaxes. How big hoaxes? Well big enough to make people believe there is going to be a shortage of edible salt. Or that some penny stocks are suddenly going to soar exponentially. Or that food of certain brands can kill you, the only thing they kill is the market for the brand.

Do you believe Facebook has 2 billion users or LinkedIn 500 million? The Wall Street Journal reported that Procter & Gamble decided to scale back Targeted Facebook Ads because it wasn’t worth it. Even we wrote about our experience of test advertising.

What about other sectors? Let’s start with Market Research. Apparently (according to market research, yes – we get the irony) most people who take surveys and participate in Market research or opinion polls do so for the incentive. The most popular incentive? Frequent flier or hotel loyalty reward points. As per some reviews online, a few next, next and next clicks can get you 500 airmiles in under 3 minutes. And everyone wonders why opinion polls are so wrong nowadays.

There are very many eBooks available to buy online. And some cost over $200 a copy. Written by authors you have never heard of. They don’t even have many reviews but have sold thousands of copies. The only thing is that this is the increasingly becoming a way to move money around. For instance, people across the globe buy the book, the seller gets around 88% of the value (after marketplace or platform commission) and no one can question that it was not legal because it was. In the same way that politician biographies sell millions of copies even though only a few hundred people actually claim to read it.

Take cryptocurrencies as another example. You can create one yourself in under 30 minutes with some basic coding skills. And because no one can question you about the intrinsic value of it you are free to accept any value for it. Say person A in country A1 wants to transfer money to person B in country B1 but wants to skip the normal banking routes. Person B creates a cryptocurrency which person A buys (via a channel that skips the traditional money exchange systems), person B gets the money, person A gets something worthless. Much like how modern art is being used to move money around the world without paying taxes.

Education is a sector rife with fake data. A lot of academic subjects have no real-life value, but they are still offered, and research is produced by universities for the “greater good of humans”. Research on what aliens would like to eat when they reach earth. There are PhD’s in Yodelling, PhD’s in Hand Embroidery and PhD’s on the impact of Harry Potter.

Back to some serious stuff though. We were looking at a fact check website that produced a piece on global trade data and believe it or not it had data used by another website rather than the official numbers. Why skip real data when real data is available? Their response – the official website has fake data …

Remember Lehman? Its debt was rated at the highest level just before it went into administration or bankruptcy. The justification of rating agencies? Lehman supplied them fake data. Only thing is they didn’t, rating agencies made up fake data to justify their rating. The rating research suddenly disappeared on the day Lehman went bankrupt. Recent bankruptcies have put the focus on the big audit firms as to why they didn’t spot fake data. Are corporations now so rife with fake data?

And finally, official “estimated” statistics like inflation or employment. Does anyone believe those? The keyword here is estimated. They get away with it because it is “estimated”. Apparently the only accurate way to measure employment is to put an electronic chip on each citizen. And yes, that is what at least one government wants to do.

Irrespective of what we think of it, fake data keeps a lot of people in jobs and plays a role in keeping the global economy running.

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