Social Advertising Needs Econ 201

Roughly a decade ago, while in business school, I became enthralled by behavioral economics. Behavioral economics holds that rational economic models seldom prevail. Most people who lose a $10 bill on the way to the movies will still buy a movie ticket, whereas most people who lose their ticket (also of $10 in value) will not buy a new one. Reality gets in the way of models.

The experience taught me a good deal when it comes to trying to crack the code on social advertising. Good ad creative and branded content are the behavior economics layered on top of the math. Algorithmic and behavioral targeting for branding and awareness only make sense if great care is put into the creative that rides on top. You can model out that people behaving rationally should be willing to pay the same price for a cold beer regardless of venue, but they’ll happily pay $12 at a ritzy beach club and balk at paying the same price at a corner convenience store.

The key to social advertising is creative that people find engaging and want to share, just as a key component of any good economic theory is reality. If advertising before Ogilvy and Wunderman was all art, and advertising since has mostly been engineering, I think we’re entering an era of true “imagineering” in digital that finally combines art and science.

The current obsession in the industry is with audience-based targeting platforms. Programmatic and exchange-based ad buying are the equivalent of econometrics, or classical economics. Getting the best prices and optimizing effectively are important. They’re critical to making this industry work at scale. But great trading doesn’t matter unless the creative moves real humans with their subjective and unpredictable emotions to react, and in social advertising to share. It’s not worth debating which part is more important; the answer is both.

At BuzzFeed we spend a ton of time measuring and engineering for sharing. We don’t believe sharing just happens, that it’s like catching lightening in a bottle. We spend equal time thinking about what is great creative that people will relate to, experience novelty in, and want to share. We tracked 2 billion events across 225 million uniques of partner traffic in our Mongo databases in June, but we also applied the best of our creativity to hundreds of organic posts and branded content posts in conjunction with our agency and brand partners.

For social advertising to reach its true potential, it must be guided by math and moved by art. We need to trade like econometricians and do creative like behavioral economists.

Jon Steinberg is president of Buzzfeed, a viral content platform. Follow him on Twitter @jonsteinberg.

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