Chapter 10 Exercises: The Business Model of Outrage — Engagement Over Truth

These exercises develop analytical, empirical, and applied skills for understanding the economic incentives shaping online information and media.

Part A: Economic Foundations

Exercise 10.1 — Revenue Model Analysis

For each of the following media organizations, identify the primary revenue model(s) and explain how those models create incentives that affect content quality and editorial decisions:

a. BuzzFeed News (2013-2023) b. The Guardian (present day) c. Fox News d. ProPublica e. Your local city newspaper f. A typical YouTube political commentary channel with 500,000 subscribers

For each, specify: primary revenue source(s), how content decisions are made to maximize revenue, one way the model aligns with public interest, and one way it conflicts with public interest.

Exercise 10.2 — CPM Calculation Workshop

Use the following data to answer the questions below:

A news website receives 2 million page views per month. Each page view shows an average of 1.8 ad impressions. The website's average CPM is $3.50 for most content, but political content earns a CPM of $7.20 and health content earns $9.80.

a. Calculate the total monthly advertising impressions. b. Calculate the monthly revenue if 60% of content is general, 25% is political, and 15% is health content. c. How would monthly revenue change if the content mix shifted to 40% general, 40% political, and 20% health? d. What is the percentage revenue increase from this content shift? e. What incentive does this calculation illustrate? What editorial consequences might follow?

Exercise 10.3 — Engagement vs. Accuracy Trade-off

The chapter describes a structural tension between engagement optimization and accuracy. For each of the following content types, discuss: (a) why it might generate high engagement, (b) whether high engagement is correlated with high accuracy, and (c) what specific economic incentive this creates for content producers.

Conspiracy theories about prominent public figures
Accurate investigative journalism about municipal budget decisions
Emotionally charged immigration stories with simplified narratives
Nuanced analysis of healthcare policy trade-offs
Celebrity relationship news (true)
False stories about natural cures for cancer

Exercise 10.4 — The Moral Contagion Effect

Based on Brady et al.'s research on moral contagion:

a. Write two versions of the same news headline — one with high moral-emotional language and one with neutral, factual language. Use this news event: "City council votes to close three public libraries."

b. Which version would Brady et al. predict would receive more retweets? Why?

c. Which version is more informative and accurate? Is there a tension here?

d. If you were a social media manager for a news outlet, how would the Brady et al. finding affect your headline-writing guidance? What are the ethical implications of applying this research to your own content strategy?

Part B: Case Analysis

Exercise 10.5 — Macedonian Fake News Economics

The Macedonian fake news operations during the 2016 election are described as a form of "advertising arbitrage." Work through the economics:

a. A Macedonian teenager operates a website producing pro-Trump political content. The website receives 800,000 page views per month with a CPM of $4.00. Calculate monthly revenue.

b. To produce this content, the operator spends approximately 3 hours per day writing and sharing content on social media. At a local wage rate of $250/month for full-time work, what is the hourly "opportunity cost" of this time?

c. Calculate the monthly "profit" (revenue minus opportunity cost). How does this compare to typical wages in North Macedonia in 2016?

d. What would happen to this revenue model if Google AdSense refused to place ads on websites containing political misinformation? Would this eliminate the economic incentive? What alternatives exist?

e. Who bears the cost of this advertising arbitrage? Trace the economic harm: who pays, who profits, and who is harmed?

Exercise 10.6 — Native Advertising Identification

Collect five examples of native advertising or sponsored content from online news publications. For each example:

a. Identify the publication and the advertiser. b. Describe how the native advertising is disclosed (or not disclosed). c. Would a typical reader be likely to recognize this as advertising? What features might or might not make it obvious? d. Does the content contain any claims that would be subject to fact-checking standards if they appeared in editorial content? If so, do the claims appear accurate? e. Assess the ethical quality of the disclosure, using FTC guidelines as a reference.

Present your findings as a comparative table with a brief narrative analysis.

Exercise 10.7 — Subscription Economics

A regional newspaper is considering switching from an advertising-dominated model to a subscription-first model. The current economics are:

Monthly page views: 5 million
Current advertising CPM: $2.80
Estimated subscription conversion rate: 2% of monthly unique visitors
Estimated subscription price: $10/month
Monthly unique visitors: 800,000

a. Calculate current monthly advertising revenue. b. Calculate projected subscription revenue if 2% of monthly unique visitors convert. c. If adding a paywall reduces monthly page views by 60% (a typical estimate), what is the impact on remaining advertising revenue (assume CPMs remain constant)? d. Calculate total revenue under the subscription model (subscription + remaining advertising). e. Should the newspaper make the switch? What additional factors would you need to know to make a confident recommendation?

Part C: Platform and Policy Analysis

Exercise 10.8 — Platform Incentive Mapping

Create a detailed incentive map for one of the following platforms (choose one):

Facebook/Meta
YouTube
Twitter/X
TikTok

Your map should identify: - Primary revenue sources (advertising, subscription, etc.) - The key engagement metrics the platform optimizes for - How the algorithm translates engagement metrics into content ranking - How this ranking creates incentives for content creators - Specific types of content that are disproportionately rewarded vs. penalized - At least two documented cases of how these incentives have produced misinformation or outrage content

Present your map visually (diagram, flowchart, or annotated illustration) with written explanation.

Exercise 10.9 — Outrage Cycle Trace

Select a real misinformation story that became viral on social media (examples: Pizzagate, the "5G causes COVID-19" claim, election fraud claims in any country). Trace the story through the outrage cycle described in Section 10.2:

a. What was the initial piece of content? Who produced it, and what was their likely motivation? b. What emotional response did it generate? What moral-emotional language or framing did it use? c. How was it algorithmically amplified? On which platforms? d. Who benefited economically from its spread? e. What was the eventual correction or debunking? How widely was the correction shared compared to the original?

Your analysis should be approximately 600-800 words.

Exercise 10.10 — Brand Safety Analysis

In 2017, major advertisers including AT&T, PepsiCo, and Walmart withdrew advertising from YouTube after their ads were found to be appearing alongside extremist and conspiracy content. Research this "YouTube ad crisis" and write a 500-word analysis addressing:

a. How did programmatic advertising create the conditions for ads to appear alongside extremist content? b. What steps did Google/YouTube take in response? c. Were these steps effective? What evidence supports your assessment? d. Does the brand safety crisis represent a market-based solution to the misinformation problem (advertisers refusing to fund harmful content)? What are its limits as a solution?

Exercise 10.11 — Public Media Comparison

Compare news coverage from a public media outlet (NPR, BBC, CBC, or PBS) and a commercial media outlet (Fox News, CNN, MSNBC, or a major commercial newspaper) on the same topic. Select a significant news story from the past month.

For each outlet's coverage: a. Count the proportion of coverage devoted to emotional vs. analytical framing. b. Identify the number of sources quoted and whether they represent diverse perspectives. c. Assess whether the coverage prioritizes information that helps citizens make decisions vs. information that generates emotional response. d. Note any advertising or sponsorship content around the news coverage.

Write a 400-word comparative analysis. Does your comparison support the claim that public media produces less outrage-oriented content than commercial media?

Exercise 10.12 — Alternative Model Design

You have been hired to design the economic model for a new public-interest news organization in your city. The organization's mission is to produce high-quality, accurate, civic-focused journalism accessible to all residents regardless of income. Design the economic model:

a. List and evaluate at least four potential revenue sources, with realistic estimates of how much each could contribute. b. Identify which revenue sources create the strongest alignment between economic incentives and the public interest mission. c. Identify which revenue sources create potential conflicts with the mission. d. Describe any governance structures you would put in place to protect editorial independence. e. What is your recommended model, and what are its primary vulnerabilities?

Part D: Misinformation Economics — Applied Analysis

Exercise 10.13 — InfoWars Business Model Analysis

Research the InfoWars business model (Alex Jones's media operation) and write a 700-word analysis addressing:

a. What are the primary revenue streams for InfoWars (advertising, supplements, merchandise, speaking fees, etc.)? b. How does the media content function as a marketing vehicle for the non-media revenue streams? c. When InfoWars was deplatformed from Facebook, YouTube, Apple Podcast, and Spotify in August 2018, what was the impact on the business? Did deplatforming reduce the economic infrastructure of the operation? d. What does this case tell us about the limits of content-level intervention (deplatforming) as a strategy for addressing misinformation? e. What interventions would more directly address the economic infrastructure that sustains operations like InfoWars?

Exercise 10.14 — Super Chat and Live Stream Revenue

Research YouTube's Super Chat feature and its use by political content creators. Find two examples of political content creators (on any part of the political spectrum) who generate significant Super Chat revenue during live streams.

For each creator: a. Describe the type of content they produce. b. Estimate their monthly Super Chat revenue (YouTube Transparency data or third-party trackers may help). c. Analyze how the Super Chat mechanism might affect the content they produce. Does the real-time financial feedback create incentives for specific types of claims or engagement styles? d. Has either creator been associated with misinformation? If so, did the misinformation appear primarily in live stream contexts where Super Chat is available?

Exercise 10.15 — Substack and the Monetization of Dissent

Substack has been described as both a platform for serious independent journalism and a platform that monetizes misinformation and conspiracy content. Research three Substack newsletters:

One that represents high-quality independent journalism
One that has been identified as spreading health misinformation
One that is politically controversial but factually disputed (something in the gray area)

For each newsletter: a. Estimate their subscriber count and monthly revenue (Substack takes 10% of subscription revenue). b. Describe the type of content they produce. c. Assess whether Substack's business model (which takes a percentage of subscription revenue) creates any incentive for Substack to moderate content quality. d. Where should the line be drawn between "controversial but legitimate" and "misinformation" content on direct-subscription platforms? Who should draw this line?

Part E: Research and Policy Analysis

Exercise 10.16 — FTC Disclosure Standards Research

Research the FTC's current guidelines for native advertising and influencer disclosure in the United States, and compare them to regulations in at least one other country (suggestions: UK ASA guidelines, EU regulations under the Digital Services Act).

a. What are the specific disclosure requirements under the FTC guidelines? b. How are these guidelines enforced? What are the penalties for non-compliance? c. How do the guidelines compare to those in your chosen comparison country? d. Are current disclosure requirements adequate? What changes would you recommend, and why?

Exercise 10.17 — Programmatic Advertising Research

Programmatic advertising is described in the chapter as a mechanism that inadvertently funds misinformation by placing brand-name ads on low-quality websites. Research the "adtech" ecosystem more deeply and write a 600-word explainer for a non-technical audience explaining:

a. How programmatic advertising works (the real-time bidding process) b. Why programmatic advertising has struggled with brand safety c. What "supply-side platforms" and "demand-side platforms" are and how they create the problem d. What technical or regulatory solutions have been proposed and how effective they have been

Exercise 10.18 — Policy Proposal

Write a 700-word policy proposal addressing one of the following:

Option A: A regulatory framework for online advertising transparency that would reduce the ability of misinformation websites to generate advertising revenue without a general internet censorship regime.

Option B: A proposed regulatory approach to native advertising disclosure that would meaningfully reduce the trust transfer problem identified in Section 10.4.

Option C: A public funding proposal for local journalism that would reduce dependence on advertising revenue without creating political interference with editorial independence.

Your proposal should identify the specific problem being addressed, the proposed policy mechanism, expected effects, potential unintended consequences, and implementation challenges.

Exercise 10.19 — Ethical Framework Application

The chapter describes several practices that raise ethical concerns: - Outrage-optimized content (legal, but potentially harmful) - Native advertising with inadequate disclosure (legally gray area) - Clickbait headlines (legal, but misleading) - Macedonian fake news (potentially illegal in some jurisdictions) - Conspiracy supplement marketing (potentially fraudulent)

Using a specific ethical framework (utilitarian, Kantian, virtue ethics, or care ethics), rank these practices from most to least ethically problematic. Justify your ranking with explicit application of the framework's criteria.

Exercise 10.20 — Digital Literacy Application

Create a one-page "field guide" for identifying and evaluating content based on its economic incentive structure. Your guide should help a general audience:

a. Identify when content is advertising-funded vs. subscription-funded vs. public media b. Recognize signs of outrage optimization (emotional language, moral framing, partisan triggers) c. Identify native advertising and sponsored content d. Evaluate whether a content creator's revenue model creates incentives for the specific claims being made

Design the guide to be practical, clear, and accessible to a non-academic audience.

Part F: Synthesis and Reflection

Exercise 10.21 — The Structural vs. Individual Responsibility Debate

The chapter argues that outrage media is primarily a structural problem — an emergent property of the advertising economy — rather than a moral failure of individual actors. Write a 500-word essay evaluating this argument. Consider:

Does framing misinformation as a structural problem reduce appropriate moral accountability for individual bad actors?
Does it change the policy solutions you would recommend?
Are structural and individual explanations compatible, or do they compete?
How does this debate parallel similar debates in criminology, public health, and economics?

Exercise 10.22 — Comparative International Analysis

Research the media economics of two countries with different regulatory approaches to advertising, public media, and platform regulation. Possible contrasts:

United States vs. Germany
United Kingdom vs. India
Australia vs. Brazil

For each country, describe: a. The relative size of the public media sector b. Key regulations on digital advertising and platform content c. The prevalence of misinformation in the media ecosystem (using available research)

Does the country with stronger public media and more advertising regulation show less misinformation? What does the comparison suggest about effective policy responses?

Exercise 10.23 — Future Scenarios

Write three 300-word scenarios describing alternative futures for the digital information economy in 2040:

Scenario A: Advertising-dominated (current trajectory continues, regulation remains minimal) Scenario B: Subscription-dominated (most quality journalism moves behind paywalls, public media strengthens) Scenario C: Mixed public-private model (significant public investment in journalism, regulated advertising, platform accountability requirements)

For each scenario, describe: what the information environment looks like for a typical citizen, what kinds of misinformation persist or disappear, and what the implications are for democracy.

Exercise 10.24 — Research Design

The chapter cites Brady et al.'s finding that moral-emotional language increases retweet rates by 20% per moral-emotional word. Design a follow-up study that tests whether this effect:

a. Holds on Facebook (not just Twitter) b. Is the same for political and non-political content c. Differs across demographic groups (age, political identity, education)

Specify: research questions, platform(s), data collection method, sample size justification, analysis approach, and ethical considerations.

Exercise 10.25 — Personal Media Audit

For one week, track your own media consumption with attention to the economic incentives behind the content you consume. For each piece of content you consume:

Identify the revenue model (advertising, subscription, public, or other)
Note whether the headline or presentation uses outrage-optimizing techniques
Assess whether the content appears to be optimized for engagement over accuracy

At the end of the week, write a 400-word reflection: a. Which revenue models dominated your information diet? b. Did content from advertising-supported sources show more outrage optimization than subscription or public media content? c. Did awareness of economic incentives change how you consumed content? d. What changes, if any, would you make to your media consumption based on this analysis?

Grading Rubrics

For analytical essays (10.21, 10.23): - Quality of argument and engagement with chapter concepts: 40% - Use of evidence and specific examples: 30% - Consideration of counter-arguments: 20% - Clarity of writing: 10%

For case analyses (10.5, 10.9, 10.13): - Accuracy of economic analysis: 30% - Depth of case research: 30% - Connection to chapter concepts: 25% - Clarity and organization: 15%

For policy proposals (10.12, 10.18): - Problem identification and framing: 25% - Policy mechanism specificity and feasibility: 35% - Analysis of trade-offs and unintended consequences: 25% - Writing quality and professional format: 15%