Did you know that there are over 3.2billion daily active social media users? Or that we spend an average of 2 hours and 22 minutes browsing through our favorite social media channels? When you take these stats into account, it’s easy to see just how powerful these platforms can be, and businesses have certainly caught onto that trend.
With 73% of all marketers believing that their social media marketing efforts have been somewhat or very effective for their business, studies are suggesting that social media could be one of the key influencers on how we spend our finances.
Studies also suggest that more and more of us are ruining our financial situations thanks to the influence of social media – or rather, how people use social media. With the tap of a screen or the press of a button, we can be sucked into a warped sense of reality filled with posts about holidays, new clothes and more. From there, it’s far too easy to be pulled into making that unneeded purchase – and here’s why.
Industry Integration
As we mentioned before, social media is a powerful platform for marketers across every industry, but there are a few, in particular, that benefit the most. In fact, they tend to integrate social media into their services directly. These are entertainment, trading, and retail:
- Entertainment – With studies suggesting that upwards of 63% of all social media posts are entertainment-focused, this is easily one of the biggest markets for social media. From video content to images, stories, advertisements and more, the entertainment industry benefits more from link sharing than any other industry. The ability to capture attention with a clip from a show or a quick play of a game can lead any social media user to convert more or less instantly after being enticed, more so than any other industry.
- Trading – While this one is a little more niche towards the financial markets, trading and investment has started to utilize social media in an entirely different way. While trading guides are already plentiful online, for those with no experience, social trading offers easy copying of industry leaders, access to the latest news and more, which is opening up the industry to a far wider audience than ever before. Even those with limited knowledge of the markets can get involved.
- Retail – Very rarely will you get the chance to scroll through your social feed without coming across a business selling something. Whether it’s an advertisement or an organic post, retail has jumped on the opportunities that social media presence more than any other industry. Brand visibility, word of mouth and the ability to make purchases straight from the social media apps have made e-commerce a standard marketing avenue for more businesses than ever before.
Social Influence
We’ve all heard the term ‘peer pressure’, but did you know that that’s precisely what the billions of social media users active daily are facing? Scrolling through Instagram or swiping through Facebook can mean we’re met with pictures, videos, posts and more, all about how our friends and family are spending their money.
Whether it’s a full album of pics from their latest holiday that incites wanderlust or the fantasy of the perfect life thanks to a perfectly framed and captioned Instagram post, we can all be drawn in and spend more than we can afford thanks to a spot of unrealized jealousy.
It’s reported that over 35% of people will spend more than they can comfortably afford in order to spend time with their friends, simply due to things seen on social media. That’s 48% of millennials and 41% of Gen Z spending because of social media influence.
We can all find ourselves comparing our lives to our friends’, making purchases we might never have even considered simply because we’ve seen it in a post. It doesn’t even have to be a direct friend, either – influencers online, whether a celebrity, YouTube star or simply someone famous in their industry, can each impact what we’re spending or investing, and when. A bit of ‘advice’ or a recommendation from these influential people can drive us to make an investment we’d never considered before, thus effecting our budgets and financial state even more.
The Fear Of Missing Out (FOMO) is also a driving force behind these kinds of impulse purchases and investments. Time and time again, we see sales online accompanied by ‘Limited Time Only!’ or ‘Get It Now!’ – businesses use these clever CTAs (call to actions) to entice readers and viewers into making a purchase or getting in touch, simply because they think they’ll miss out if they don’t.
However, while this is a more obvious form of FOMO marketing, the more subtle form comes through the influencers we mentioned before. The fear that we’ll miss out on all of the stylish, beautiful or fun things people seem to be buying and doing can be enough to drive us to make a purchase without having to be told or encouraged to do so.
How To Retain Control
If you believe you’re being influenced by social media, there are a number of things you could try in order to keep on track including having a budget, rewarding yourself and minimizing the amount of time you’re spending on social media in the first place:
Have A Budget
Make a budget, and stick to it – sounds simple, right? Well, we’re all guilty of spending outside of our assigned means from time to time, but having a budget specifically for ‘luxury’ purchases could be a great way to ensure you’re not overspending.
When we have a budget designed strictly to cater to bills and the less entertaining parts of life, it’s easy to step outside of that to spend on fun and frivolous purchases. When you set a budget specifically for those purchases, however, you’re more likely to actually stick to it.
Save What You Didn’t Spend
Every time you stop yourself from buying that impulse purchase, reward yourself by saving the money that you would’ve spent. This can be a great way to add to your savings account throughout the month and, over time, gain the money to make a bigger purchase that you’ve been looking to make. That holiday you’ve been craving could be closer than the 12 months saving period you’ve calculated, all because you’re adding a bit more to your account.
Minimize The Time You Spend On Social Media
If you want to avoid the influence of social media, cut the amount of time you spend on your usual platforms. Stop scrolling through Instagram during lunchtimes at work when you’re feeling down, cut the time spent on Facebook looking at what your friends and family have been up to and reduce the amount of holiday-based tweets you’re reading. When you reduce the amount of exposure to the influence of social media, you reduce the chances of this affecting your finances.
From influencer posts to the fear of missing out, social media can be a powerful force for businesses looking to sell but for individuals with limited budgets, it can often have a drastic effect. With proper budgeting and smart spending, however, this can be reduced.