~~ Update: For a brilliant and breathtaking example of automatically generated news based on audience input, as per the last section of this post, see Sunday’s New York Times interactive describing all 649 nonillion ways the NFL season could end. I mean, wow. ~~
In the summer of 2014, the Associated Press did something that, to many journalists, was straight out of science fiction. It began assigning earnings reports stories to robots.
It was able to do this for two reasons, both related to data. The AP recognized that much of the information in companies’ quarterly reports could easily be read as structured data — data that’s organized in a predictable structure, and therefore easily read by a machine. Additionally, computable comparisons between data determined the angle of and details in the stories. Did a company perform better or worse than expected? Compare its current earnings to analyst predictions. Was it just shy of expectations or did it miss them entirely? Compare the difference between expectations and performance.
Get the data, add a carefully crafted algorithm, and you’ve got an automatically generated news story.
Using Wordsmith, automation software from North Carolina-based Automated Insights, the Associated Press now creates about 3,500 stories per quarter using automation, and expects to produce 4,500 such stories by the end of 2015, it told Nieman Reports. In January, the company said its automated stories had already increased the company’s story output tenfold. Today, editors estimate that the stories have freed up as much as 20 percent of its business reporters’ time to work on other content.
“Every time you’re freeing up a staffer’s time, or somebody’s time, that time is going elsewhere to do something that is more relevant in the modern media world we’re living in,” Lou Ferrara, the AP’s vice president and managing editor, told Poynter.
A NEW VALUE CREATION STRATEGY
Founded in 1846, the Associated Press is one of the oldest and largest newsgathering operations in the world. It’s a not-for-profit cooperative owned by its members, a host of American broadcast and news organizations, who support it with licensing fees. In 2014, 47 percent of the AP’s $604 million in revenue came from broadcasters, 25 percent from newspapers, 9 percent from Internet companies, 7 percent from other agencies, and 5 percent from radio stations.
Though automated earnings stories free up plenty of the AP’s resources for value creation, the company doesn’t see them as a way to grow revenue from its local markets — yet. But the stories are helping the company reshape its strategy to better serve its local customers, whom it hopes to retain despite job cuts and losses across the industry. Most of the AP’s customers are local news operations, and the AP has had to cut back on coverage of local companies as it’s struggled under its own financial strain (it posted its first revenue gain in six years in 2014).
Thanks to its output of automated stories, the AP has been able to restore its coverage of more local and regional companies, and then some. It’s programmed its automated system to gather data and produce earnings stories for all companies with a market capitalization of $75 million or greater, a number that could never have been covered by its staff reporters. With the AP supplying basic earnings reports stories, local business reporters can focus on more in-depth work.
THE BENEFIT OF SPEED
As a wire service for other news organizations, the Associated Press’ customers value few things more than speed — especially with business critical information like earnings reports. In that respect, if there were a way to speed up the deployment of basic stories to its customers and the AP didn’t take advantage of it, it could lose competitive ground to someone who did.
It is no surprise, then, that the AP has done so much so early to develop automation. It’s getting ahead of the industry. Before the AP deployed its automation technology, staffers pushed to post 130-word earnings stories on the wire within 20 minutes of a press release — no easy feat for a human staffer. The AP now gets 500-word stories on the wire within a minute of a press release — and can generate 2,000 stories a second, according to stats shared with Nieman Reports.
COMING UP: STORIES BASED ON READER DATA
The AP, along with the rest of the news industry, is just beginning to deploy story automation to assist in its value creation for readers and customers. Earnings stories were just the first step for the AP. They’re experimenting with automating sports stories and even election stories with returns from local polling stations. Anywhere structured data is news, automation can give a big assist.
The next big step with news automation will likely be fueled not by data about the story, but about the reader. The New York Times, ProPublica and others have already published one-off projects that customize stories to different readers based on those readers’ locations or expectations. As University of Maryland Francis King Carey School of Law professor Frank Pasquale told Nieman Reports, if stories can be tailored for users based on things like income, geography or other characteristics, newsrooms will soon feel pressure to do it. “That’s going to be seen, eventually, as revenue maximizing,” he said. He’s right.