RESEARCH & RESOURCES

6 Principles of Data Storytelling

Just one week in late August offered data storytellers a rich set of observations on their craft.

The late-August financial roller-coaster ride gave fans of data storytelling an up-close look at what data stories can be -- and what they are not.

Millions of stories seemed to arise from the naked data the week that began early on Monday morning, August 25. Spreadsheets in New York City and across the globe glowed red as stakeholders assessed the implications for themselves, their families, and their clients. Depending on who they were, the Dow's close that week could have meant more wealth or less wealth, a timely retirement or retirement delayed.

The week's abundance of rich data and the high stakes made it one of the best weeks on record for data storytelling.

A good data story is often a detective story. Some stories invite people to discover the patterns before they're revealed. Something has happened here, but you don't know what it is. You have a mass of data, much of it irrelevant. Your job is to find the best narrative that makes sense of it all -- and there's no richer source for this than financial markets.

The Dow drops, money's lost, and for some a feeling of having been robbed sticks in their throat. For others, opportunity appears. A few of the million stories came from comments on the New York Times website. An optimist wrote, "People with guts will buy into this market in the next few days." A pessimist wrote, "There's plenty of money in this economy, but it's all at the top making money off of paper transactions…." Finally, the inevitable: "Everyone take a deep breath, the world is NOT coming to an end."

Data stories are more than visualizations. Many of those who talk about data stories seem to confuse the two. The stories from the financial crisis reveal that, though the two can work together, data stories can use any media. Few of the micro-stories on Twitter used any visualization at all. "This is likely to be the S&P's first 6-day losing streak since July 2012," read one tweet. Another one read, "The Dow dropped 205 points today in its biggest reversal since 2008." Each one is a data story, and there's not one line chart, pie chart, or bar chart in sight! The only pie in sight was on the faces of those who insist data stories are all about visualization.

The human angle is often the best. Financial markets lose their abstract nature with a simple photo. The New York Times ran one that showed the effect of the Chinese economy's troubles clearly: a retailer of luxury goods with a conspicuous lack of customers. Chinese shoppers, the piece says, account for about one-third of global spending on high-end goods, but the recent devaluation has made them hesitate, and that worries investors and luxury brands. "After growing by double digits in the last decade, spending on luxury goods in China contracted for the first time last year to about $18 billion, shrinking 1 percent," the story explained. It quoted an expert from a "luxury intelligence firm," David Friedman: "This is going to hit hard."

Starting and ending points make all the difference. To watch your story's starting and ending points may be easily forgotten in other contexts. By mid-September, the Dow was ticking upward again, as Nate Silver thought it would. "Worried about the stock market? Whatever you do, don't sell," read the headline on his blog post. "Past behavior of many crashes indicates there's a good chance of a rebound," he wrote. "When it comes, it comes quickly." Unlike most of the week's many other data stories in the media, he visualized the data. A line chart contrasted play-it-safe investors with buy-and-hold investors (whose lines have ended up far higher).

A story's trappings cast light on the data. Data is data, but which data we choose to ignore and which we value can be affected by stories we hear and choose to believe. Russian deputy Prime Minister Arkady Dvorkovich sought to calm fear about the Chinese economy, a source of volatility, when he said, "I am fully confident the [Chinese economy] will stabilize in several weeks." China will continue growing, he said, perhaps not at high as before but possibly at 5 or 6 percent.

Some stories do end. The New Yorker magazine, famous for cartoons, published a cartoon of a man, thoroughly disheveled, having stepped in his front door to face his wife. He says, "The market was volatile."

Without stories, the Dow Jones Industrial Average and other data are just data, naked, and useless. The recent financial crisis demonstrates how important stories are to interpret data. The data is plentiful and free, but its meaning varies for every audience and their many questions.

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