Social media advertising is big business. There are virtual unknowns like Liz Eswein, who joined Instagram back in 2010 and snagged the handle @NewYorkCity. She now has over 1.2 million followers and charges companies $15,000 per shot and $1 per like, which adds up pretty quickly since some of her posts get over 23,000 likes.
So why are companies willing to pay so much money for these posts? In a recent poll conducted on behalf of the AICPA, nearly 4 out of 10 respondents with social media accounts said that they shopped for similar products or experiences after seeing them on someone else’s account. Essentially, it’s the new wave of guerrilla marketing.
For example, when you follow someone like, I don’t know, say Dwayne “The Rock” Johnson, who constantly posts pictures from his “Project Rock” collection with Under Armour, it shouldn’t be a surprise that you end up wanting to buy a new duffle bag for the gym or a Rock Clock™ to wake you up in the morning with inspirational messages from Johnson himself.
So what does this mean for you and your social media consuming behavior? Really, it just means that you need to be aware of what a powerful effect it can have. When you see the picture perfect moments from someone’s vacation, don’t start planning something that’s way outside your budget. Be happy that your friends got some R&R, and stick to the financial plan you have in place.
And when you get caught in celebrity posts or the inescapable vortex of @richkidsofinstagram, don’t start Googling how much it costs to charter a jet for the weekend. Realize that those accounts are purely for entertainment and shouldn’t alter your own reality—you know the one where it’s not reasonable to take champagne showers and wear three gold watches at the same time.
We always need to be aware of why we make financial decisions. If we can identify the motive, then we can quickly determine whether or not it’s in our best interest. But we should be especially aware when social media is the primary influencer.
Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at josh@LeFleurFinancial.com.