Social media has changed the way we spend our time. With more and more people spending hours on Facebook, Instagram or Twitter each day, they have less time to dedicate to other activities. Companies are now trying new ways of attracting customers – whether that be through social media or some other means.
A few examples include giving out freebies to consumers who follow their company on Instagram, launching a Facebook page where people can ask questions and get feedback from employees (also known as “Facebook Fridays”), or posting pictures of products that are trending in the news.
7 Ways Social Media Influences our Spending Habits
Targeted Ads with User Data Mining
With social media companies like Facebook, Instagram, or Twitter selling our personal data to advertisers, they are able to tailor ads only to the people most likely to purchase them. If they know you watch cooking shows on Netflix they will serve you ads for the latest cookbook that is hitting store shelves.
Taking advantage of your browsing habits online is one way that companies can gain insight into who their next target audience might be, and what kind of products they may need. By keeping track of these different browsing behaviors, businesses can create targeted ads based on all your past purchases or activities online.
Seamless Shopping Experience
Just this year Facebook allowed users the option to buy items directly from its platform. Not having to close your browser window to go to another site can make the online shopping experience more streamlined.
This type of social media integration has allowed retailers extremely easy access into buyers’ lives and marks a shift in how ads are targeted.
As more businesses adapt their strategies to fit this new form of marketing, consumers will find it easier than ever before to purchase products through one simple click.
Social media platforms currently allow for easy tracking of user data, which is necessary for generating insight on potential customers – but some people worry that this information might be used against them.
FOMO [Fear of Missing Out]
With these new developments in advertising strategies, it’s no wonder that companies want you to look at their products or follow them on social media. For some people, the thought of missing out on exclusive deals or never seeing their favorite influencers’ posts can create a feeling that they need to spend money just to stay relevant in society.
The idea that people should spend more than they can afford is relatively new, which has led some to believe it could be responsible for increased levels of credit card debt and bankruptcy rates.
Social media gives marketers an opportunity not only to sell products but also ideals like prestige or status, making it even harder for consumers to make smart spending choices. This fear of missing out (FOMO) could cause shoppers to impulse buy items because they don’t want other people thinking they missed an opportunity.
Triggers Impulse Spending
The difference between impulse and planned spending is that the first can happen on a whim. While having an impulsive moment might seem harmless, it could lead to more unnecessary purchases throughout the week.
But why does FOMO make us spend like this? Many people believe that social media posts containing hashtags like #WednesdayWisdom or #ThrowbackThursday are urging consumers to act impulsively; allowing marketers to drive up revenue with little effort. Since FOMO makes consumers fear missing out on trends, they will often fall into this trap of buying something because it makes them appear “cool.”
Another way marketers target impulsive spending is through what’s called “retail therapy.” This phrase describes how media users may use their buying habits to cope with negative emotions like stress, loneliness, or depression.
As a result, marketers can sell products they believe will make people feel good about themselves in an attempt to turn the product into therapy.
Allowing social media users to become influencers has given them clout over their followers in terms of what is “cool” or socially acceptable. This type of advertising makes it appear that everyone is buying these products, which creates pressure for consumers who want to keep up with their peers’ expectations.
With social media giving you quick access to others’ lives, it becomes hard not to compare yourself against others when you browse profiles. While there are some positive aspects that come from this form of advertising, content creators and marketers also know that these posts work as a way to influence people into buying products.
For example, if influencers post about a new clothing line on Instagram and then you see those items everywhere you go around town, eventually, your desire to keep up with what’s popular will convince you to spend some of your hard-earned money on those clothes too.
A company could tell an influential social media user they can receive a free product in exchange for creating content on the company’s behalf to use as a further advertisement.
Raises Fraud Concerns
While this might not be the case for all social media users, there are some concerns over how these types of ads could raise red flags for fraud or criminal activity.
This year Facebook has come under fire for selling ads to foreign buyers attempting to influence U.S. politics and social issues, which led the company to release a report detailing how they plan to improve transparency in political ads.
Since many social media users don’t know how their data is actually being used, there could be unfair advantages given only to companies that spend more money on advertising, according to InsideSources
Social media has changed the way we spend our hard-earned income by allowing advertisers access into our lives through targeted ads or influencer posts with user data mining. As long as spending remains a part of society, marketers will continue finding innovative ways to get consumers’ attention and make them want items they previously never thought of.