Rich Girl Roundup: How Do Targeted Ads Influence Our Spending?

Katie: Welcome back, Rich Humans, to the Rich Girl Roundup weekly discussion of The Money with Katie Show. As always, I'm your host, Katie Gatti Tassin, and every Monday Henah and I are gonna talk about what we think is an interesting money discussion. But before we do that, here's a quick message from the sponsors of this segment. 

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Katie: All right, I'm excited for this week's upcoming main episode on Wednesday. It's about getting off what I call the “Hot Girl Hamster Wheel.” This is one of my pet subjects. I'm really honestly thrilled, too, about the guest that we were able to get for this episode, who has been dubbed “the woman the beauty industry fears.” So do not miss it. All right, onto the Roundup. Henah, how you doing? 

Henah: I'm good. I think this is the perfect question to go with this week's episode, and the irony is that we're filming this on Prime Day, which is… 

Katie: LOL. 

Henah: LOL. So I can read this question. It is from Jennifer R. She asked, “There's lots of talk about…”

Sam: Meow.

Katie: Oh, okay. Do you wanna weigh in, Sam? 

Henah: He has thoughts. He said, get me the Furminator. Okay. “There's lots of talk about economic decisions people make, but I rarely hear about how intense targeted marketing can be. In the eighties, young people had to go to a mall to spend money, usually. Now we are marketed the exact products we want and need relentlessly, and spending is two clicks away. Have there been any studies about this? And I truly think this is the bane of our generation in addition to low salaries, high housing costs, and high healthcare.” Oof. And Jennifer… 

Katie: This sounds so… 

Henah: You and I should be besties. 

Katie: Aside from the high housing costs, low wages, unaffordable education, we also have these ads…god, there's really an uphill battle here. 

Henah: Targeted marketing is just so ubiquitous. You can't really escape it. It's Instagram and Facebook targeted ads, it's influencers, it's email segmentation that's made just for you. What do you think, Katie, on the topic at large, before we get into any studies or the steps you've been taking to distance ourselves from too much marketing? 

Katie: Yeah. The first thing that came to mind when I read the question was that it's not just the volume that we're contending with, right? It's that the algorithms that follow us around the internet are probably even more intimately familiar with our desires than we are. So if you've ever looked something up online and then had it stalk you around your browser for the next two weeks in the banner ads…

Henah: Guilty. 

Katie: You know exactly what I'm talking about. I think it's the nature of the advertising itself, but also just that there's simply, and maybe this is just my perception, but it seems like there's just more out there to buy, and that consumables today are generally less expensive than they used to be. So clothes, shoes, TVs, all of these things have gone down in price compared to things like housing, healthcare, whatever. And so I think it can make it feel like a lower barrier to entry to get that immediate dopamine boost, too.

Henah: Yeah, I don't know if you saw the jokes that went around a couple years ago where people were like, “I want my husband to propose. So every day I just go over his phone when it's lying there and I'll be like ‘diamond ring, engagement ring’ to start serving him ads.” 

Katie: I thought it was that they would literally say the cut and the metal, like they would really prescriptively dictate to the phone so that it would…yeah, it's really funny.

Henah: But that's a great example of just how much stuff that follows us around. The FTC put together a paper, a brief, on the economics of targeted advertising, that I found. And their argument was also around just like the qualms about personal data and the GDPR situation that happened a couple years ago, where you're having to opt in and consent to people having your data on different websites. But I think ultimately it just means that these brands have more access to us as humans than ever before. So it feels more pervasive. It feels more like not only am I getting, isn't it like thousands of ads a day? 

Katie: The number that I saw was between 4,000 and 10,000 a day. So you're just getting pelted all day long with advertising messages. 

Henah: It's not even that they're just like random messages at this point. It's that they're all tailored exactly to what you think you'd want, which is just so hard to shy away from. I also found this really interesting study about how targeted marketing affects children, because they're often growing up with these like YouTube vloggers who are unboxing, and they're doing like, these are the toys that I really recommend and blah blah blah blah. But because children are not old enough to understand advertising best practices or literacy, they're also easily persuadable. And so children are growing up with just a totally different approach to being targeted all the time and they're way more susceptible to being like, Mom and Dad, I need this thing.

Katie: I have so many examples of this from when I was a kid and would see infomercials on TV and then it would become my life's purpose to obtain that thing. Do you remember the Conair Twista Braid? 

Henah: Yeah. 

Katie: I wanted one of those things so freaking badly because the infomercial was so…I mean, infomercials got me all the time as a kid, and then I would go begging my parents, but it's kind of gross when you think about it. It's not like I was watching the news or MTV; I was watching cartoons and Nickelodeon and Disney Channel, and those were the channels where I was seeing these advertisements. Obviously those advertisers are targeting me as a child. It is really scary to think about that next generation and how they're gonna be impacted now that it's 10 times worse. 

Henah: My husband worked for a popular chocolate and candy company, and he was telling me one day that they very purposely do not market to children. You will never see an ad for them on a late night TV show. There's another very popular candy company that has an entire theme park about candy and because of its high sugar levels, et cetera, et cetera, the company he worked for was very staunchly like, no, we don't advertise to children. It was just so indoctrinated into me as a child to be like, yeah, I wanna go to this theme park so I can have like 10 gallons of candy. It was something I'd never thought about before, is like the company's intention of advertising and using ad dollars for that. 

Katie: It's also really wild when you get into the underbelly of personal finance education in schools. I can't remember what I was listening to recently, where certain banks will pay to sponsor the financial literacy courses. That way, from a young age, a child is like…I don't know what banks do this, but we'll say Wells Fargo, 'cause we know generally they don't have the best reputation. It's like “sponsored by Wells Fargo.” So it's like they're trying to begin that consumer relationship with you so young. It's really pretty appalling. So let's talk about ways to deal with this. Do you have any favorite approaches? 

Henah: Yes. It kind of relates to a post you put on Instagram this week, Katie, about discipline. But I basically put additional steps between what is easiest and most convenient and what is actually best for my wallet and health. So for example, I don't have an Amazon Prime account, and I very intentionally do not do that for a number of reasons, 'cause I don't necessarily want to support Amazon. But it also helps me from trying to be like “Convenience! I need this in two hours or in two days.” And I also do the practice of leaving things in my cart for a very long time. You know this, Katie, where you've actually had to sit me down and be like, “It's okay to spend money.” But there are times where I'm like, I don't know, do I need this $50 whatever? I have a list on my phone and my computer of things that I've been thinking about but I haven't necessarily purchased but they're in my cart or they're saved somewhere, and then I occasionally go back and visit them. 

Katie: How do you decide when it's time to buy it? 

Henah: It's kind of a gut check. Like have I thought about it enough? I can think of a few examples. So basically there were, my family hates that I…I think they say they hate it, but I think they appreciate it. So for Christmas every year, I make a list of what I would prefer to get so that things are very easy for every different… 

Katie: Why am I not…it's like here's the size, the link, you can sort by price, the Airtable for Henah’s presents.

Henah: It's in a Google sheet, but that is exactly what it looks like, of size, price, link. You could use Rakuten to get this much back. I just…

Katie: Oh my god. 

Henah: I'm really fun to be friends with, I think. 

Katie: Your parents will still buy you presents for those things? 

Henah: My parents have just kind of been like, here's some cash, do what you want with it. And I'm like, yeah, I'd rather have cash. But like for our siblings or in-laws, like those kinds of relationships. My husband also, we just give each other a list. But anyway, so there are times where I've gone to look back at previous Christmas lists of things that I didn't get, and then being like, oh yeah, I never thought about that again after that season passed. And so I have this thing on my computer, my phone, where maybe once a month I just kind of open it to be like, is there anything that I'm still really thinking about? 

Katie: Yeah. What's on it right now?

Henah: Okay. Right now a spray, like a room cleaning spray from Home Court, Courteney Cox's cleaning line. 'Cause I've just heard it smells amazing. A new coffee maker, 'cause ours broke, and a new pet feeder because the one we have is really old. There are a couple other things, but basically like because those things are above a $50 price point… 

Katie: Oh, I was gonna ask if there's a threshold below which you would just buy something. 

Henah: I'd say probably $50. $20 if it's something really small, but I'm gonna use it day to day, but $50 is probably where I'm like, hmm, I'm just gonna think about this. Where I would say right now, the coffee maker I do still want because I think it's something I'll use every day, but the spray is kind of like a, maybe I'll ask for it as a gift, but I'm not thinking about it the way I was whenever I wrote this down.

Katie: Okay. 

Henah: So what about you? 

Katie: Well, I guess there's two things. I also have a list. Right now there's actually nothing on it, but I do typically, if I'm in kind of a spendy season where I find myself wanting things more often, and it does tend to come in waves, I do have a list that it's basically like “shit I want but don't need.” And then anytime I feel like I want something a little bit out of the ordinary, I will write it down there and then I will make myself wait a week. Or if it's something that's maybe a little bit bigger, I'll set a financial goal that has to be met before I would allow myself to buy it. That, I think, is a little more common, I would say, is that I'll be like, all right, I have to, my net worth has to be X before I'll do this.

Henah: What is your threshold, Katie? What is the minimum amount or maximum amount that you're willing to spend on something without thinking twice about it? 

Katie: It's not that there's like a minimum threshold. I think it's just anything that I would consider out of the ordinary. So there are things that I buy, spend money on every single month, like food and utilities and pet stuff. Usually the stuff that ends up on the list is more topical. It'll be like clothes or travel bags or things like that, where it's something that I know I don't actually need. It's partially a money thing, but it's also partially because I just don't like having a lot of stuff. It stresses me out. When I feel anxious, I will just start throwing things away or donating them.

And so it's partially like, I think this desire is gonna pass, but also it is a money thing. So no minimum threshold, more of like a category. And then I would say anything that is related to a financial goal, probably like over a thousand dollars. But that can be with pretty much no cap. You know, like the car was on my list for a couple years and had goals associated with it. And then once I met the goals I was like, cool, I've wanted it for years now, I feel comfortable buying it, what have you. But the thing that's been fascinating about that exercise and giving myself that week to have to think something over is that I would say three out of every four times, the desire passes.

Henah: That's what I found too. 

Katie: And usually that dopamine hit that I wanted in the moment, I can now think more clear-headed about whether or not it was just something that, it was kind of like that passing desire popped up. So just having the distance between the purchases has definitely been helpful. I also tend to have, I think you mentioned this a couple weeks ago in a Rich Girl Roundup, but that you have a plan for your bonus. I have kind of a flat plan that I use with, I would say, almost all of them. Sometimes things will come up where I don't have a choice. Like when Georgia needed surgery, that was a different story. But typically when I have unexpected income over and above my salary, I'll spend 10% and save the other 90%, but then I'll kind of spend that 10% on whatever I want, pretty much doesn't matter, purchases that I ordinarily probably would not buy.

Henah: You and my husband have actually sat me down to do the opposite approach, which is, what if you didn't save it and you actually spent it on something meaningful? And that has been an interesting mindset shift of, things that have been on your list for a long time, why don't you just finally get them? You brought up, kind of in line with this targeted marketing thing, right, is like we're always kind of told, oh, look at this new brow gel that came out that's like the hype right now, or you need to get this new blush, when we're so inundated with 5,000 reviews for, I'm thinking of like, what's that new Bobbi Brown, Jones Road… 

Katie: Oh, I don't even know. I'm fortunately out of the beauty algorithm now, so I don't see that stuff anymore. But when I used to, I spent a lot of money on makeup, that's for sure. 

Henah: You kind of see it everywhere and it just kind of takes over. Or like the other examples, that Dyson hair thing… 

Katie: Oh, I did get that. 

Henah: Yeah. Which if it's worth it for you, that's fantastic. 

Katie: It's not. Wouldn't recommend. 

Henah: Oh well, there you go. There is this sort of FOMO situation when you're being targeted from every direction of like, this is brand new and you must get it. It's gonna be the best. 

Katie: So can I say something then, on the inundation? Sometimes I think short of having the world's best ad blockers, if you're gonna be on the internet, you're gonna be exposed to this stuff. Even on TikTok, like I follow some TikTokers who will do beauty…they do “get ready with mes” where they're using the same products every time and it's like just the sheer exposure volume to things like that, depending on what filter bubble you're in. My husband is really anal about screen time. He literally got me a pillow for Christmas that says, “What's your screen time today?” So he basically bullies me into being on my phone less 'cause he's like, it's so bad for your brain, and he's right. But there's an element of this that is truly just, you wanna limit the amount of exposure you have to those inputs, to those advertisers. And for me, just having a screen time limit, my husband does an hour a day. He will be on his phone for less than 60 minutes a day, which is amazing. I'm lucky if I'm under three.

But that limit wasn't working for me psychologically. What did work is deciding, for the first two hours I'm awake and the two hours before I go to bed, no phone, unless it's for podcasting or the Notes app. 'Cause I'll have to jot things down sometimes. That has helped me a ton, just because it physically limits the amount of time that my brain is being inundated with that stuff. And so you think about reducing the surface area of temptation.

Henah: Ooh. 

Katie: It's probably just gonna naturally change your behavior. 

Henah: “The surface area of temptation.” 

Katie: Dude, I've had so much caffeine today. I'm on fire. 

Henah: That is good. 

Katie: Listen to these. I'm dropping bars over here. I keep my phone on grayscale now. Do you know about grayscale phone?

Henah: I saw that you put it in the newsletter and then I looked it up to be like, what is this? 

Katie: It's an accessibility thing, where you can go in and you can set it so that if you click your home button three times, it makes the whole thing grayscale. And I will tell you, I've been doing this for a couple of weeks, maybe months now. It is literally unbelievable how it reduces the phone addiction. But the second the color is back on, it is like Candyland on the screen, and I'm like, “Wow, it's so vibrant and I wanna click on everything!” When it's grayscale, it's just like, womp womp. You just naturally spend less time on it. So my plan has been really trying to just limit the amount of exposure to that kind of stuff that I'm even seeing. Because I think that that plays a really big role. And if you're just not even, if you're not looking at it, they can't target you with anything. 

Henah: That's true. I'm not so good at the screentime limit, but what I have done to kind of shield myself is I've also just unfollowed a lot of influencers or hid their stories. That is what has kind of set the pace. It doesn't make me feel FOMO if I don't see it. I can't miss what I can't see there. So I actually wrote a piece about my lack of trust in influencers. I can link it if people want, but that has helped me significantly, to be like, do you need this, or do you just feel like you've been told you need this?

Katie: Yeah. Well, that is all for this week's Rich Girl Roundup. We'll see you on Wednesday for a, I would say a relative continuation of this conversation, to talk about the price of beauty, the beauty industry, self-maintenance, and whether or not it's time for a budget detox. We'll see you then. 

Henah: See you then, and X out of that page that you have your card open on.