WNYC's Radiolab dedicated a live broadcast to the War of the Worlds craze of 1938 and similar events. The radio show was, as usual also brought as a podcast.
Orson Welles allegedly didn't like H.G. Wells's War of the Worlds, nevertheless took it upon himself to turn the 19th century story into a radio play. Afterwards he claimed to have wanted to check the power of the new medium of radio and pretended to have wanted to teach the public a lesson in vigilance - not take anything they hear on radio for granted. In that light, the craze, the mass panic, showed the experience as a failure. Nevertheless, a radio maker in Quito, Ecuador, regarded it as a success and tried to emulate it in 1949, with disastrous effects. Riots and people killed and wounded.
Radiolab attempts to explain and shows that such a craze can still happen today, for which The Blair Witch Project movie was taken as an example. I am not sure whether their explanations are so strong, but one observation is brilliant: Welles' experience and approach have resulted in the opposite: news media use the pumped up language of impending disaster in order to draw the attention of the audience. The conclusion for Welles: the media are effective, too damn well.