Nieman Foundation at Harvard
HOME
          
LATEST STORY
O, a meaning!
ABOUT                    SUBSCRIBE
Dec. 8, 2016, 10 a.m.
Reporting & Production
LINK: insights.ap.org  ➚   |   Posted by: Joseph Lichterman   |   December 8, 2016

The Associated Press’ automated coverage of company’s earnings releases has increased firms’ trading volume and liquidity, according to a new study that compared stock performance of companies that the AP only started covering after it began using algorithms to write earning report stories in 2014. (The AP collaborated with the study’s researchers.)

By late 2015, the AP was covering more than 4,000 earnings report stories per quarter, up from about 400 before it began using algorithmically written stories. The study’s authors — Stanford professor Elizabeth Blankespoor, University of Washington professor Ed deHaan, and Stanford PhD student Christina Zhu — found that 57 percent of those companies received no coverage from the AP before the automation started in October 2014.

ap-automation

Companies that were newly covered by automated reporting saw their trading volume increase by about 38 percent, the study found. However, the researchers saw that “abnormal trading volume increases nearly monotonically for several quarters after automated articles begin, suggesting that it takes time for the articles to impact investor attention and/or trading behavior.”

screen-shot-2016-12-07-at-4-13-00-pm

“After the articles are published, we see an increase in trading volume that persists three to four days after the story comes out,” deHaan told the AP.

The report also found that the companies receiving coverage had improved liquidity because “increased trading volume potentially creates a deeper market, and lower information processing costs can result in less information asymmetry, less price protection, and greater willingness to trade.”

Beyond earnings reports, the AP is also working on further automating its reporting processes. This year it began algorithmically covering minor league baseball games by converting data from box scores into traditional stories.

“With minor league baseball, we never had any stories and didn’t cover it with humans,” Jim Kennedy, the AP’s senior vice president for strategy and enterprise development told me this fall. “Now we’re covering it without humans and creating stories that we didn’t have before. That’s been a real breakthrough. Based on that success, we wanted to see what else could we do in automation.”

Kennedy said the AP has a goal — that’s “more aspirational than real” — to automate 80 percent of its content production by 2020. (A spokeswoman also later acknowledged this was probably unrealistic.) The news agency wants to use machine learning to help reporters produce multiple versions of stories for different mediums or for specific clients.

“Let’s say a newspaper or website is subscription-based and, in its research, it’s identified five personas that are its typical subscribers,” Kennedy said. “If we perfect this, we could design output for those five personas and drive some or all of our output through those five personas.”

Show tags Show comments / Leave a comment
 
Join the 50,000 who get the freshest future-of-journalism news in our daily email.
O, a meaning!
Fifty years ago, with humanity about to reach the moon, The New York Times gave a poet a corner of the front page.
Who wants to share government content? In recent European elections, not many people
Plus: How college students evaluate fake vs. real news, and an algorithm that doesn’t just identify fake news but explains why.
Newsonomics: It’s looking like Gannett will be acquired by GateHouse — creating a newspaper megachain like the U.S. has never seen
A combined GannHouse (Gatenett?) would own 1 out of every 6 daily newspapers in America. The goal? Buy two or three more years to figure out how to make money in digital.