Why Most Social Marketing is Decidedly Average and How to Fix It


When was the last time you were wowed by any type of social marketing? Whether it be an ad or an owned post, the vast majority of social marketing blends in with its surroundings or is just plain boring. You’d think the opposite would be true given that social channels offer brands an opportunity to show personality unlike anywhere else and affords the chance to interact with fans thereby compounding the impact. So why then is most social marketing decidedly average? I believe the reason is the fundamental human characteristic of ‘Loss Aversion’.

Side note: I majored in Economics and Psychology in college. Behavioral (psychology) and social (economics) science are increasingly linked via interdisciplinary study, but I did have a favorite topic that touched both fields of study regularly: Prospect Theory, the work of Daniel Kahneman and Amos Tversky (two psychologists who won the Nobel Prize for Economics in 2002 for this work and the related analysis of risk evaluation).

There is much to discuss (or even argue against) from Kahneman and Tversky’s findings, but one very simple and relevant conclusion they drew was “Loss Aversion”- the idea that we are more deeply affected by a loss than an equivalent gain. In fact, they noted that humans are 100-200% more affected by loss than they are by gain. In simple terms, this means I would need to win $200+ to have an equal emotional impact as losing $100. If we accept this as true, then the potential gain from an activity must far outweigh the potential losses for the activity to be worthwhile (from an expected utility perspective).

How is this relevant to social marketing? Well, ultimately social ads and social posts are made and designed by people, and it is human decision making that leads to something being created and shared. Yes, tools exist to multivariate test and optimize our marketing, but they still start from a human and are capped by creativity and… wait for it… evaluation of risk. Every post or ad is subject to the risk/reward analysis of an individual or group of people, so we can logically conclude that these humans experience what Kahneman and Tversky identified. Each social marketer must evaluate the risk and reward of each piece of marketing they create, and given human aversion to risk it is logical that most marketing ends up being unrisky. With the size of risk often being correlated to the size of the reward (in this case great social marketing), unrisky marketing, therefore, is usually quite average.

So how do we move past our human nature that drives us to average, unrisky marketing? First, let’s break down Kahneman and Tversky’s findings into an extremely simple equation.


Expected Utility = Perceived Potential Gain - Perceived Potential Risk


This equation shows us that to maximize expected utility we can either increase the potential gain or decrease the potential risk. Changing our perception of potential gain depends on business goals and with a required gain of 2x a loss (according to Kahneman and Tversky), it is difficult to swing that part of the equation enough to meaningfully outweigh risk. So for this post I am going to leave it alone (we will address it in subsequent posts).

Instead, let’s look at changing perceived risk. One way to change perceived risk is with predictive intelligence (analysis of patterns and historical data to guide decision making). Predictive intelligence can seem unattainably advanced. However, social media uniquely offers a layer of data that you can tap into that makes predictive intelligence accessible: the ability to uncover what is organically effective. In social media, your fans share on behalf of your brand (earned social) and with the right analytics tools, you can discover what is working and what’s not. You can then take the most effective earned sharing behavior and repackage it as your own social marketing. By understanding what content has worked organically via earned , you can meaningfully reduce the perceived potential risk and maximize the expected utility of your owned and paid efforts.

Marketers try to be as data driven as possible, but it is important to recognize that psychological limitations such as risk aversion will naturally influence our marketing. The result is often decidedly average social marketing. To overcome our risk aversion and tendency towards average marketing, we can use predictive intelligence from earned social to confidently know what will work in owned and paid campaigns. This will enable uninhibited and effective social marketing.

Written by Joey Kotkins

  • Evan Dunn

    This is awesome. Anyone who references Daniel Kahneman knows what they’re talking about.

    Also, could you darken your body font? Super hard to read. :-/ You will increase duration of page views, I promise.