When I ran a Facebook ad recently for a nonprofit where I volunteer, I was surprised how specific you could get in targeting potential customers. If I wanted to advertise the event I was promoting to women between the ages of 24 and 26 in my city who were unmarried and educated, who watched “Girls,” owned a dog and liked designer purses — I could do that.
Being able to target ads to a specific market can help a seller reach the people who want or need their products and services. Unfortunately, that means buyers may also be encouraged to spend more than they should if they’re not mindful.
There are many ways that we spend money or time that we didn’t before social media — ad targeting is just one of the potential spending traps we can fall into. We may also feel pressure to keep up with the social media images of our peers. Add to that the aspirational nature of sites like Pinterest, and it’s safe to say that one can encounter many budget-breaking temptations by spending time on social media.
Your Inspiration Station
Pinterest might be the perfect place to score a killer recipe or instructions for a DIY project, but it is also the biggest tempter when it comes to making us spend. According to RichRelevance, an e-commerce consultant, Pinterest shoppers will spend an average of $170 per session — whereas Facebook shoppers only spend $95 per session and Twitter shoppers spend just $70 per session.
So while some people use the site to find fun DIY projects that are cheap or repurpose other items, they might not necessarily be coming out ahead, either. The downside comes if they choose to spend money on projects they hadn’t budgeted for. So the key to keeping your inspiration –- and aspirations — in check is to make a little room in your monthly budget for your projects… and then stick to it.
Keeping Up With the Joneses
Perhaps the most insidious ways social media influences our spending is through social pressure or suggestion. Did your friend just tweet, Instagram, Pin or share their delicious meal from that new brunch place? Now you’re craving those waffles and you have to go! Sure, a meal out here or there may not set you back too much. But what if your friends are sharing pictures of their new house, their kitchen renovation, or their new car — and you start to feel a nagging sense that you need those things, too? Things that break your budget, or aren’t even an item in your budget to begin with?
In the social media world, you aren’t just tempted to try to keep up with your neighbours or co-workers, but also the friends from high school you don’t see anymore, and the girl or guy you once met at a party. By expanding our networks, we expand our temptations — and maybe our sense of competition.
Another social medium luring us into the spend-more trap is viral content. Lately, I’m seeing more of my friends sharing funny article lists that are actually subtle ads for various products and how-to articles written by brands. Content marketing, a marketing strategy that uses videos and articles to reach consumers, has been growing as companies look for new ways to target potential shoppers and get them to share content online.
These subtle ads may persuade us to buy things we might not need or to spend more on a brand that we have a good association with. For example, I might decide to spend a few more dollars to buy a name-brand product rather than a generic brand because I liked their viral video. This might not seem like a big deal given that it’s just a few dollars. But it can add up, especially if it’s something that involves a larger financial decision. For example, say you’re in the market to buy a car and a particularly charming viral video persuaded you to make a more expensive choice.
What You Can Do
If you’re trying to cut back on your spending, or just don’t want those pesky laser-targeted ads, consider opting out from online behavioral an interest-based advertisements by registering your IP address with the Digital Advertising Alliance. It won’t make the advertisements go away, but it will make them less tailored to you. And while there are some ways to block ads on social networking sites, it’s ultimately better to be aware of the larger issue: There will always be ads, as will the temptation to spend beyond your means. It’s during these times that you need to remember to ask yourself:
- Is this a want or a need?
- Do I have it in my budget to spend on this?
- Can I plan for this expense by creating a savings goal?
- Is there a better way to spend this money (say, paying down your credit card debt)?
Staying conscious of your financial goals can help you overcome the urge to one-up your friends and followers. In fact, if you need a different kind of motivation, consider joining other social media groups focused on saving and paying down debt. Also start checking your credit regularly to see how much your debt is costing you. You can get a free credit report summary updated monthly on Credit.com, so you can keep an eye on a major factor of your financial health.