Social Media and young spending

Ads are everywhere — on the street, on tv and now on the smartphones of millions of teenagers across the country — proving to be influential to their spending habits. 

Ad spending in social media marketing from companies worldwide amounted to around US$102 million in 2020, according to Statista. They also report this number is expected to have an annual growth of seven per cent resulting in a market volume of around US$125 million by 2023. Recent studies are showing this is having a particular effect on the Millenial and Gen Z generations.

According to Schwab’s 2019 Modern Wealth Survey, 49 per cent of Millennials reported spending their money on a product or experience because of something they saw on social media. Gen Zs are right behind this number with 44 per cent of the generation admitting to the same habit. The numbers include both the influence of their peers and company advertisements and show a sign of how effective social media advertising is becoming.

Emma Bacon, 19, a first year biology student at Queens University said she has bought several items through Instagram ads including makeup and clothes.

“It’s instant gratification. You don’t have time to think through a purchase when it’s so accessible,” said Bacon.

Payten Cervini, 18, is a business student at Ryerson University and said she has purchased health juices through Instagram ads.

“By showing us products we don’t have it puts want in our subconscious,” said Cervini.

With social media ad spending set to grow in the years ahead, it remains to be seen how spending habits of younger generations are affected.