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Social norms versus market norms: implications for social media and online PR

Dan Ariely’s book Predictably Irrational is a fascinating look at why human beings systematically behave in an irrational fashion.  Ariely is a behavioural economist – he goes a long way to exploding the traditional rational expectation theory of economics. The subject titles of the chapters in the book immediately give you a flavour of the non-intuitive findings of his research. For example:

The Cost of Zero Cost – why we often pay too much when we pay nothing

In one experiment, a group of people were offered the choice of receiving a $10 Amazon voucher for free – or paying $7 for a $20 voucher. Under rational expectation theory, everyone should choose the $20 option. Because the overall gain is $13 versus $10. However, in the test, virtually everyone in the group picked the free $10 option.  The power of free is very powerful  (but says Ariely, irrational).

However, one particular chapter struck me as having major implications for social media – namely, The Cost of Social Norms. According to Ariely, we live simultaneously in two different worlds – one where social norms prevail, and the other where market norms make the rules. Social norms are usually warm and fuzzy. Market norms are very different. The exchanges are sharp-edged: wages, prices, rents, interest, and costs/benefits.  Says Ariely “when we keep social norms and market norms on their separate paths, life hums along pretty well. However, when social and market norms collide, trouble sets in.” Take sex as an example. A guy takes a girl out for dinner on three occasions and pays for the meal every time. On the fourth date, he casually mentions how much this romance is costing him. “Now he’s crossed the line. Violation! She calls him a beast and storms off. He should have remembered the immortal words of Woody Allen – the most expensive sex is free sex”.

Introducing market norms into social exchanges thus violates social norms and hurts relationships. Once this type of mistake has been made, recovering a social relationship is difficult.

So what does this mean for the world of social media? More specifically for those who hope to use social media for commercial benefit? If Ariely is right, then you need to understand very clearly where the boundaries lie between social and market norms.  As a PR, is it possible to apply both social and market norms to your relationship with a journalist? Ultimately, you are being paid by a client to achieve a certain commercial goal ie you’d think market norms would apply every time. Yet much of the talk around social media seems to be couched in warm, fuzzy terms like conversation, dialogue and engagement. PRs are forever talking up their special “relationships” with journalists. However, in a business context, surely market norms must apply at some point.

In another of Ariely’s experiments, people didn’t mind doing certain tasks for free – because it was seen as a social norm. The minute money was involved, market norms came into play – and people’s involvement and behaviour changed. On Twitter, can you switch from providing good info with no expectation of financial reward to pimping your own commercial interests?

Getting the balance right between social and market norms is thus going to be one of the trickiest challenges facing social media marketeers.