Over at Not a Potted Plant, Will has been commenting one of the newer internet political memes: Carbonite. Carbonite is a publicly traded stock company that asked it’s advertising agency to pull ads from the Rush Limbaugh show after the Slut-gate. (Hey! I just coined a “-gate!” I am finally a real blogger.) The story that Carbonite is being brought down for daring to cross Limbaugh Nation has been widely discussed over the past week by Righty pundits. In the meanwhile, Lefty-pundits have been hailing how advertisers, taking their dollars elsewhere, are about to hammer the death nail in Limbaugh’s storied radio career. Both of these memes have one thing in common, which is a common truth they each shed light on:
Those those that focus on political punditry don’t really understand the business of business that they often find themselves having to comment on.
Let’s start with the Carbonite meme. (By the way, I want to take care to note that in Will’s post he was discussing the ethics of boycotting in general, and was in no way making any claims about the veracity of this meme.) According to the right wing, the story goes like this:
Carbonite is a financially strong file-backup service company, going along it’s merry way. Then, after the Fluke hubbub, Carbnonite’s founder and CEO reveals his company to be a socialist Trojan Horse and pulls advertising from the Limbaugh show for purely political reasons. The People, however, are wise and see right through this parlor trick, and because of this – to quote Pajamas Media – “Carbonite’s stock price has reportedly fallen to a near 52 week low.” If this meme is true, then the right’s claim that the vast population of the country really are with them, fighting against a small elitist minority, might have some merit. Criticizing conservatives will not just be an act that can coast you your RNC chair, it can bring down entire blue chip corporations. So how true is this meme? Let’s take a look.
It is true that Carbonite’s CEO has given money to predominately democratic candidates, according to public records. This may be because he is liberal; but it may also be because Carbonite is based in Boston, MA, a notoriously Democrat stronghold. Most companies that are located in an entrenched party stronghold usually give money to the party in perpetual charge. You might well have given a $50 check to Rick Santorum because you were excited about what he had to say on FOX News; corporations and those that run then give money to candidates for entirely different reasons. However, since we can’t know what really goes on in the head of Carbonite’s executive staff, lets’ assume for the sake of argument that the Right is correct; this was a political move pure and simple. If so, this surely shows that the collapsing stock price is an indicator that the country is behind conservatives and right wing radio, yes?
PJ Media was actually being truthful in reporting that Carbonite’s stock is at a year-long low. However, either out of a profound ignorance of the most rudimentary rules of how a publicly traded stock works, a purposeful slight of hand, or a complete lack of access to Google, PJM’s connecting the stock fall to the Limbaugh issue is misleading – if not an outright lie. Here’s a look at what Carbonite’s stock has done over this 52 week period, as of today:
So, was the decision to pull advertising on Limbaugh a good idea for Carbonite? As much as bloggers will hate the answer, the truth is we’ll never really know.
Ignoring the point that the stock has not even been available for a year… If you look at the history of the price since August, when it was made available, you will see that the stock opened at $10 a share, immediately skyrocketed to twice that the day after, and has been in constant free fall ever since. This “herding toward” and subsequent “buyer remorse” right after initial offering is actually not uncommon in tech stocks, where the assumption is that you have to invest in hundreds of failed ventures to get on the ground floor on the next Amazon or Google. What the stock price shows is business as usual for new tech stocks. However, even if you didn’t know that the quickest glance at the stock history will tell you that the Fluke controversy that took place over the past few weeks is not the cause of it’s “52-week low.” In fact, the irony is that despite the fact that the stock is quite anemic and below it’s initial offering price, it has actually increased in value slightly over the past week. (And no, left-wing bloggers, this increase will have nothing to do with the Limbaugh boycott either.)
So, was the decision to pull advertising on Limbaugh a good idea for Carbonite? As much as bloggers will hate the answer, the truth is we’ll never really know. We don’t know what the demo- or psyco-graphics of Carbonite’s customer base was, or if they are attempting to rebuild them into something new. And because advertising is not an exact science, and neither is the exchange, Carbonite might not ever really know either. What we do know is that this idea that the ditto heads have killed a publicly traded company is a bloggy wet dream, based more on what some pundits wished their influence on Wall Street might be instead of the reality that Wall Street could give a crap.
The corresponding left wing meme, that through its efforts it has finally brought about the beginning of the end to right wing talk radio, is equally a fantasy. Many advertisers have indeed pulled their dollars – temporarily. But they’ll be back. Rush Limbaugh is many things, but chief among them is a very shrewd businessman. His comments about Fluke were the odd crossing of a moment in time when he was being overly offensive, and a moment in time when everyone was paying attention. Those moments coincide far more rarely in talk radio than you might think.
In a few months time, Arbitron will come out with 2012’s first quarter ratings. It is possible Limbaugh’s numbers will be down somewhat. If so, Limbaugh will look to assure buyers that he knows how to right his ship and get the ratings back to where they need to be, and until then he will charge less for his time. More likely, because of this hubbub (not to mention the crazy-ass GOP primary) the ratings will be up over this time last year, and one by one – now out of the spotlight – most or all of his advertisers will return, and new ones will join them.
People who talk a lot about politics assume that political-themed media is run with the same decision making mindset as political campaigns, but they are wrong. Given the right number of ears of the right kinds of demographics, McDonalds, Ford and even Carbonite will pay for access to your listeners. It’s not an endorsement – hell, they’ll be more than happy to buy time on Rachel Maddow or Ed Schultz during the exact same hours if they can provide value as well.