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November 08 2010

16:49

Can Social Sharing Survive the Rise of Rewards-Based Campaigns?

Left alone in a room, a group of people were given a complicated seven-piece puzzle, known as a Soma cube, and told to assemble the pieces into specific designs. One group was offered a monetary reward for each correctly assembled puzzle; another group was offered nothing. They worked at the puzzles until being told they could stop. And then the experiment really began.

Edward Deci, the research psychologist behind the study, told the subjects to read a collection of magazines while he recorded his findings. Instead of tabulating the puzzle data, he observed the subsequent behavior of both groups. The group promised payment tended to quit assembling the puzzles, picking up the magazines instead. The group offered nothing was more likely to keep trying.

"When money was used as an external reward, intrinsic motivation tended to decrease," Deci wrote of the experiment. (Click this link to read the full paper, "The Effects of Externally Mediated Rewards on Intrinsic Motivation," as a PDF.)

Deci's psychological experiment precedes the invention of Facebook by 24 years and Twitter by more than a quarter of a century. But it's even more relevant today as the influx of rewards-based campaigns by brands -- such as coupons, free giveaways, discounts -- changes the nature of sharing on social media. Facebook just announced "Deals," a feature that allows brands to offer a reward to consumers willing to share their location. Major brands have signed up for the service, including Starbucks and McDonald's.

Social media "rewards our intrinsic desires for membership and sharing as well," writes Clay Shirky in "Cognitive Surplus." If a substantial body of research on human motivation says people aren't really motivated by monetary reward, why are brands taking this approach?

Rewards-Based Sharing

In part, because it works. Consumers who "like" brands on Facebook have been inundated with monetary rewards and free food. Chipotle's Halloween social media Screen shot 2010-11-04 at 4.22.40 PM.pngcampaign included free Booritos and a chance at $7,500 in cash prizes to people willing to dress up like a "horrifying processed food product."

Consumer products behemoth Procter & Gamble recently launched Future Friendly, a campaign that offers as much as $200 in annual rewards per household for recycling, green blogging and sharing with friends.

Granted, sharing content online in social media platforms is not exactly the same as putting together a complicated puzzle, but if the core of Deci's theory of human motivation holds true in the fragmented and chaotic environment of the social web, it raises an important question: Can sharing for sharing's sake survive in an ecosystem that increasingly turns every sharing exchange into monetary reward?

It's telling that a recent report proves what common sense tells us: The motivation to "like" a brand on Facebook is most often driven by monetary gain, with 40 percent saying they become fans to receive discounts and promotions. Yet only a small percentage of consumers (17 percent) say they're more likely to buy a brand after becoming a "fan" on Facebook, according to the same survey.

Of course, there's a longstanding gulf between what consumers say they do in self-reported quantitative studies, like the one cited above, and what consumers actually do in the real world. And, in most cases, it remains impractical to link transactional sales data to a person's "fan" status on Facebook.

This gulf isn't really new. Mass advertising can't make a clean connection with sales, either. But it's far easier to see results in the social media space -- fan growth, wall posts, sharing and tweets. Even if fan numbers don't prove deep loyalty to a brand, it's a metric nonetheless. Although with "Deals," this long coveted link might be easier to make.

Social Media Spend On The Rise

A consumer deciding to "like" a brand on Facebook isn't much different from the old-school way of signaling brand affinity by, say, wearing a Coca-Cola T-shirt.
Screen shot 2010-11-04 at 4.24.37 PM.pngIt's just now there's something given in return for effectively wearing a logo T-shirt online, be it a coupon for a box of onion rings from White Castle or a $1 off coupon from Tide. And that's one reason the deluge of rewards-based social media campaigns isn't going to stop.

Consider that in 2010, a mere 5.9 percent of marketing budgets was spent on social media. By 2015, this should explode to 17.7 percent, according to a recent survey of CMOs by Duke University's Fuqua School of Business.

Facebook has survived the rash of branded pages and reward-driven ad campaigns. It continues to add users at an astonishing clip. But is there a line when the commercialization of the human impulse to share becomes just too crass?

In announcing the launch of "Deals," on its blog, Facebook noted that "today's mobile phones allow people to connect on the go and to share interesting moments as they happen all around them." Could Facebook users' walls end up full of brags about freebies? Indeed, how many of us haven't shared the details of a bargain with friends, colleagues and family. This too is a very real human impulse. The question is whether this flood of ads and rewards changes irrevocably the essential nature and ecosystem of social media today.

Meanwhile there's a fledgling movement to take back the social web and create new environments brands can't co-opt. Diaspora, an alternative platform that touts itself as the privacy-aware, personally controlled, do-it-all open-source social network, is the antithesis of Facebook.

As Diaspora's founders try to build an alternative social network, Twitter is quickly adding advertisers and expects to have more than 100 by the end of the year. The micro-blogging site, which has just started publishing ads in users' streams to execute a moneymaking corporate strategy, will now be commercialized just like Facebook.

Twitter has arguably thrived by tapping into the intrinsic human motivation to share ideas, musings and interesting links. Could the flood of ads -- and, undoubtedly, rewards and coupons will be part of this -- unwittingly suppress the human desire that's driven its success?

Mya Frazier is director of trends and insights at Engauge, one of the nation's largest independent advertising agencies. As the advertising correspondent for MediaShift, she chronicles the impact of digital, mobile and social marketing trends on content, culture and commerce. A former business journalist, she has been a staff writer at Advertising Age, the Cleveland Plain Dealer and American City Business Journals. Her work has also appeared in the Economist, New York Times and Next American City. You can follow her on Twitter @myafrazier or at myafrazier.tumblr.com.

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June 01 2010

14:00

Parsing Panera: Could a name-your-own-price model work for news?

The former CEO of Panera Bread recently announced an intriguing experiment: The chain’s store in Clayton, Missouri is doing away with prices. The Clayton franchise, now run as a nonprofit restaurant and renamed the “Saint Louis Bread Company Cares Cafe,” offers the same products as typical Panera stores, the same baked goods and soups and salads. Instead of assigning a monetary value to the products, though, the store leaves it to customers to decide what they’ll pay. “Take what you need, leave your fair share,” reads a sign above the store’s counter.

Name-your-own-price schemes like this aren’t new; often, they don’t work. (“If you use a PWYW scheme too liberally, you are courting financial disaster,” the economist Stephen Dubner points out. “Just imagine if Tiffany & Co. held a PWYW day on all diamond jewelry.”) But sometimes — under the right circumstances — the approach can be quite effective. At One World Everybody Eats, a community kitchen in Salt Lake City, Denise Cerreta runs an analog service to the Panera experiment: Instead of pricing the meals One World serves, she asks customers to pay what they can — and, she told me, “to pay it forward when they can.” She’s doing something right, it seems: One World’s been in business for seven years.

Which brings me to the question you’ve seen coming, but one I’ll come out and ask anyway, as a thought experiment if nothing more: Could the Panera payment model work for news?

Request, not demand

First of all, there’s plenty of evidence to suggest that it couldn’t. Carta, the German public-affairs publication, is currently the highest-grossing participant on the donation-facilitator site Kachingle. Carta’s current yield from Kachingler donations is $198.27 — from a total of 65 people. Oof. Membership drives both journalistic and otherwise tend to suggest specific notation amounts for a reason: We like prices. Or, more specifically, we’re conditioned to expect them.

But what if our expectations changed? What if news outlets built into their online interfaces a more structured, and systematic, request for content compensation? Take, again, One World. One of the reasons Cerreta’s effort works is that, at the cafe, consumer behavior is monitored: The kitchen has built into its physical layout what Cerreta calls a “point of accountability” — a point at which, moving through the consumption-to-satisfaction continuum, consumers know that this is the moment they’re expected to compensate the kitchen for what they’ve (literally) consumed. In One World’s case, the accountability point is a simple donation box. One that is situated — explicitly, purposely, unavoidably — in public.

And that makes a big — and perhaps all the — difference. (Recall the “Big Brother Eyes” experiment from a few years ago.) Which means that, when the accountability is negotiated in private — when there is only, as in the case of online news, the glare of the computer screen to cast light on our shoulders’ angels and devils — our willingness to drop dollars in the donation box certainly becomes a more open question. But, then, what if we took a looser approach to publicness — what if we translated Cerreta’s physical accountability point to the ephemeral interactions of the web? Even if we citizens need a little push to behave in private with as much civic sensibility as we would in public, there’s nothing to say that news outlets can’t provide — or, at least, experiment with providing — that push. It would simply be a matter of building the push into the structure, and patterns, of consumption. Of creating, to modify Cass Sunstein’s phrase, an architecture of accountability.

Step one would be re-framing the terms of the transaction when it comes to compensating news providers for the content they provide: from fee (obligatory, and therefore purely economic) to donation (optional, and therefore suggestive of social good). It’s a semantic shift, certainly; but it could be a psychological one, as well.

Take the work of Edward Deci. In a series of experiments in the 1970s, the social psychologist examined the behavior of two groups of subjects: One was asked to solve a puzzle; the other was told it would be paid for solving the same puzzle. Those who worked for what Deci called the “intrinsic” reward of solving the puzzle — the simple satisfaction of a job well done — were, he found, more successful in finding solutions than those who were paid. Payment functioned, ironically, as a disincentive.

Deci was studying the motivation to work, rather than the motivation to pay; still, his overall finding (officially, that “contingent monetary rewards actually reduced intrinsic task motivation”) is illustrative. Introducing the concreteness of payment into an otherwise more ephemeral exchange can sometimes discourage action, rather than encouraging it; assigning monetary value to goods and experiences has a way of confining — and even negating — their broader value. Pricing is practical, of course, and, for the most part, entirely necessary. Still, we prefer to think of ourselves as motivated by something other than — something more than — rote obligation. And price tags, general necessity notwithstanding, tend to rob us of our altruism.

Accountability and urgency

What Deci’s findings suggest for news is that, paradoxically, “It’d be nice if you paid” could actually be more incentivizing for consumers than the more blunt, and more transactional, “You have to pay.” Paywalls are one thing; pay doors, if you will — come on in! have a bite! pay what you think is fair! — are another. Permeability suggests trust; expectations of good behavior have a way of encouraging good behavior. Broken windows, in reverse.

Again, though, publicness (read: public accountability) is key; roughly the same number of people who want to be good citizens want to be recognized for being good citizens. Every year, I receive a series of emails from my college (usually featuring a slick little slideshow: “Campus in the Fall,” “Campus in the Spring,” “Campus in the Summer, with Children and Puppies and Rainbows”) asking for contributions to its Annual Giving drive. And it usually takes several of those emails before I actually make my donation. It’s not that I don’t want, or for that matter intend, to give back; it’s just that the give-back ask lacks urgency. The payment isn’t a demand; it’s a request. It doesn’t have to be paid now; it can be paid whenever. And that decelerates the dynamic of the transaction.

One of the most recent emails I received, though, tapped into something other than nostalgia: It featured a long list of donors from my class — ostensibly, as a way of thanking them for their contributions by way of public acknowledgment…but also, of course, as a way of highlighting those who hadn’t yet contributed. The loud, empty space between ‘Ganson’ and ‘Geannette,’ I have to say, made for an excellent disincentive against future dallying. Suddenly, the urgency was implicit.

The Alumni Giving staff, in other words, built into their donation request a point of accountability. Not a virtual cash register, a “pay now, or you won’t get the goods you want” approach — an impossibility for donation-seekers who sell not goods but potential good — but a more subtle (and, yet, just as impactful) message: “pay now, or everyone will know you haven’t paid.” Social capital is an economic good as much as a civic one; the AG donation-seekers wove that fact into their email so implicitly that their request suddenly bore the semblance of demand. By highlighting the social, rather than the monetary, aspect of their appeal, they conveyed the fact that they meant business. Literally.

Leveraging the social economy

When it comes to the problem of monetization, we sometimes to fall into the trap of equating “pay model” with “pay wall.” We assume that news is a straight commodity, and that the cash register model is therefore the only viable option for monetizing it. (“We’re not NPR, after all.”) But the commodity-focused approach ignores the social aspects of media economics. Particularly online, with the web’s built-in mechanisms of mutuality, news is a social good as much as (and perhaps even more than) a product to be bought and sold. It is also an experience good — something that needs to be consumed before its value can be accurately determined. A tip-based model — which combines reward for a job well done with the social prestige of being generous enough to leave a tip in the first place — actually makes more sense than a paywall, which is necessarily predictive in nature.

Cerreta’s name-your-own-price experiment, and my Alumni Giving’s public-accountability approach — not to mention the experience of, yes, many a public media membership drive — suggest the raw potential of a request-oriented, rather than a demand-oriented, approach to the pay-for-news problem. They hint at what might happen when we bring a little humanity to paid content’s practical, yet wholly impersonal, business proposition. Most of us, after all, are much happier to make donations than to pay bills. Even if the checks we write are for the same amount.

That’s not to say that reframing the terms of transaction is a broad answer to the seeping problem of content monetization; “no silver bullets” has become a common refrain for a good reason. (Plus, as Laura Walker, president and CEO of WNYC, told me in a conversation about PWYW’s scalability, “I think there is a much stronger pull toward supporting an organization that is not supported by advertising — that is not there to deliver an audience to advertisers — but is there because of a mission. I think that’s why people value us.”) It is to say, though, that it may be worth widening the scope of consideration when it comes to how we think about payment structures in the first place. The many experiments we’re seeing with social media right now — HuffPo’s implementation of recognition for committed community members, Gawker’s star commenter system, Spot.us’s and Kickstarter’s public donor lists, Foursquare’s merit-badge framework — leverage users’ cultural connection to the news — and their desire to be recognized for, essentially, good citizenship within the cultures news systems create.

What would happen if those same motivations were employed in the service of monetizing online news? What would happen if we shift our focus from transactions to exchanges? Kachingle may not have revolutionized online payment structures; then again, its digital tip jar is a rare presence on websites. But what if The New York Times — or The Washington Post, or The Huffington Post — had its own kind of Kachingle? What if it also had a badge-like way of praising, publicly, the people who had financially supported its services? What if, instead of erecting a paywall, it built its site on an architecture of altruism?

It’d be an experiment, certainly. An experiment that well might fail. Still, though: I’d love to see what would happen if we broaden our notion of what a viable pay model could be.

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