Behavioral Economics for Social Media
social@ogilvyon 23 May, 2014 at 11:05
If you’re trying to sell something, whether it be a physical product or an idea, you have to know your audience. Yet it’s not enough simply to know what people do, the key is in the why. In a webinar hosted by Social@Ogilvy entitled “Behavioral Economics for Social Media”, Ogilvy PR CEO Chris Graves presented on how understanding human behaviors and thought processes is crucial to effective marketing and public relations.
As a species, humans are very risk averse, and it manifests itself in our actions and decision-making process. Graves noted research that shows for humans, the fear of loss is three times greater in humans than the thrill of a win. Pain is far more acute than pleasure. This is called Loss Aversion. On top of this intrinsic characteristic, we become even more risk averse in pressure situations. Knowing this, framing becomes a very important concept in marketing and PR, especially in areas like health and social marketing. Since we’re wired to fear, a tactic to be used is called “Loss framing”; by positioning something as “if you don’t do x, then y will happen”, people are much more likely to respond. Fear of loss is a powerful thing.
Graves continued by focusing on the findings of neuroscientist Antonio Damasio. The Portuguese scientist was one of a group of scientists to figure out how humans make up their minds. He found that, in the simplest terms possible, all decision making is emotional. We like to think of ourselves as analytical, that we’ll weigh the pros and cons and make a decision that’s the most prudent. But we almost always make our decisions based on how they make us feel. And this can make us, at times, a very weak species. With that, Graves warned against using focus groups, since too often humans will cave if they have to explain why they’ve made a certain choice.
With human beings so often set in stone in their beliefs, how are PR pros or marketers to overturn a stereotype or bias? It’s difficult for sure, but it helps to understand homophily, the idea that we humans crave and seek tribes. Graves referenced a finding by economist Paul Zak, who studied “The Trust Hormone”, or oxytocin. This is the chemical that’s released from the brain when a person is feeling accepted and a part of something, and it’s quite strong. People are more likely to change their mind or behaviors when the result will make them feel better about themselves, and often times that means being part of a larger group. Graves highlighted a small experiment done by a power company, who started showing their customers how they ranked against their neighbors in terms of consumption. The result was that most people wanted to be closer in comparison with their neighbors, whether they were previously using much more or much less energy. This is an example of Social Proof, the practice of not pointing out bad behavior, but showing consumers that their tribe is already doing the desired behavior.
In trying to change behaviors and thoughts of consumers, it’s best to stay away from hard, factual data. Quite often because of confirmation bias, this will strengthen people’s beliefs, even if the factual data proves against it. Engaging with folks’ emotions is much more meaningful and effective, so Graves suggests giving people new information by way of something they already like and trust.
Understanding not only people’s behaviors, but why it is we’re wired the way we are, can go a long way in creating effective marketing or messaging. Without taking into consideration these principles, you may find yourself at the foot of a mountain that’s nearly impossible to climb.