Do you know how social media platforms can influence you to spend impulsively? 

Is there an association between social media usage and spending? Research shows there is. For example, one study found that social networks such as Facebook and Instagram can motivate impulsive buying behaviours.[1]

But what are these social media networks doing to influence our spending?

1. Advertising

Sites like Facebook and Instagram have evolved from social networking platforms to powerful advertising tools. Everytime you login to your social media account, you will be exposed to countless marketing messages from brands. Sometimes we don’t even realise these are advertising messages as they are designed to blend in with the rest of your feed. Targeted posts are effective at getting us to spend because they’re typically shown to you based on your demographics, interests and behaviours.

2. Fear of missing out

Social media creates a tendency among users to compare their lifestyles to those of others. This comparison can trigger a fear of missing out (known as FOMO), leading us to make purchases in order to keep up with the Joneses. Regular social media usage can create an urge to buy clothing, accessories or even motor vehicles.

3. Encouraging imitation

Images of products or aspirational lifestyles posted on social media by people we respect or admire might influence us to spend unnecessarily or indulgently. This happens when we look to them for cues or guidance when we don’t know how to act and simply copy what they’re doing. Psychologists call this social proofing.[2]

Brands often use this to their advantage by incentivizing social media influencers to feature their products in their social media posts.

4. Seamless shopping experience

Social media platforms can also encourage spending by providing a seamless shopping experience. For example, Facebook enables retailers to sell on the platform itself, and Instagram has now enabled in-platform shopping experiences. Users can make purchases directly inside of the Instagram app. This makes it extremely easy to spend. Other platforms like Pinterest have also made it very simple for users to shop inside the platform.

Making smart choices

Social media can help us make better choices by exposing us to more products and services and enabling us to learn about other people’s experiences using them. But it can also influence us to spend unnecessarily or impulsively.

By setting financial goals, you can make smart choices with your money. Your professional financial adviser can help you get started by creating a plan and budget to help you secure your financial future.

Notes

[1] Aragoncillo, L, 2018, ‘Impulse buying behaviour: an online-offline comparative and the impact of social media’, Spanish Journal of Marketing, accessible at: https://www.emeraldinsight.com/doi/full/10.1108/SJME-03-2018-007.

[2] Psychology Notes HQ, August 2015, ‘What is the Social Proof Theory?’, accessible at: https://www.psychologynoteshq.com/social-proof.

Download PDF Articlehub_2019_9_Four ways social media affects our spending
Download White Label Version Articlehub_2019_9_Four ways social media affects our spending