Tuning in to the Super Bowl this weekend? Think twice before opening your wallet during commercial breaks.
In recent years, commercials for investment products have made waves during the big game (remember FTX’s infamous Larry David commercial?). But the companies behind them don’t pay millions of dollars for those commercials just to make you laugh. They want your money and have sneaky ways to get it.
Super Bowl ads are a perfect example of how advertisers regularly use subversive strategies on TV and social media to attract investment. Recognizing the factors that influence your investment decisions – and knowing how to resist those lures – can help you make smart choices with your money, regardless of whether the Chiefs or the 49ers win.
How advertisers influence your investments
Companies have long used a variety of tactics to attract your money, from building relationships, to exploiting your fears, to making you feel like you urgently need to buy something. The rise of social media has simply given advertisers a new way to reach customers.
Dan Egan, head of behavioral finance at Betterment, says the Internet has encouraged shorter attention spans, which in turn has changed many companies’ approach to marketing. They reduced the amount of information placed in commercials, favoring exciting images over education.
Advertisers have exploited our collectively short attention span by running punchy commercials, often at the expense of actually telling viewers about the product.
It’s reminiscent of Coinbase’s Super Bowl commercial from two years ago. That bouncy QR code got people’s attention — so many viewers scanned the code for free bitcoin that Coinbase briefly crashed — but it didn’t teach investors what cryptocurrencies are or hint at why it might be a good investment.
By presenting the recording directly to viewers and offering an incentive, the company eliminated barriers for viewers who wanted to become users of the platform. Would Coinbase have gotten a nearly 300% increase in signups if it had released a ton of jargon-filled crypto data on TV instead? Probably not.
Another common advertising approach focuses on evoking hype, fear, or other strong emotions that cause investors to act quickly. Cryptocurrency exchange FTX’s 2022 Super Bowl commercials, for example, played heavily on FOMO, or the fear of missing out, by having David’s characters reject disruptive technologies that later changed history.
The implicit message? FTX is the next big thing, so ignoring it would be a big mistake. (FTX later collapsed and its founder was convicted of fraud.)
Overall, Egan’s theory is that the social media landscape is causing “information overload” for investors. News cycles are moving dramatically faster than ever, and they are invading public perception.
While it might be smarter to invest for the long term, it’s become “almost strange to say, ‘I’m holding this thing for 20 years,'” he says.
The result of this is that it is easier to push investors into quick decisions. Creating a sense of urgency forces the consumer to think quickly: should you buy now before the investment takes off? Should you wait at the risk of missing out? Pushing investors to think and act quickly can help earn more dollars; consumers with more time to think pragmatically may hesitate or be dissuaded.
Perhaps the most obvious tactic advertisers use to influence investors is familiarity. The more a company can get in front of a consumer, the more likely it is to stay in that person’s mind. Egan says this is especially true in the crowded and complex world of investing.
“Many of the advertising investments are not about the quality of the product, the details or the audience,” he says. Instead, “it’s often about familiarity” because people who feel overwhelmed will inevitably choose to rely on what they know.
For a fund like Invesco’s QQQ ETF, advertised frequently during the NCAA’s March Madness basketball tournaments, familiarity could mean the difference between being selected by one investor for his 401(k) and being ignored for another.
All of these techniques are often combined with celebrity endorsements to further create goodwill with investors. But in recent years this tactic has come under criticism, especially in the cryptocurrency industry. (A handful of celebrities, including Kim Kardashian, Lindsey Lohan, and Floyd Mayweather, have been sued for posting undisclosed crypto ads that ended up costing investors.)
For his part, David expressed much regret for having supported FTX just months before its implosion. In an interview with the Associated Press, the comedian called himself “an idiot” for taking part in the commercial on the advice of pro-crypto friends. He also admitted to losing “a lot” of money this way, as he agreed to receive part of his payment in cryptocurrencies.
How investors can ignore the noise
It’s okay to enjoy Super Bowl commercials, but it’s also important to recognize that ads everywhere influence your choices as an investor, whether you realize it or not. Try not to let something you see at the big game or online derail your long-term investing vision (ideally developed with the help of a financial advisor).
If you want to become more resilient, Egan says you should remember your priorities and long-term financial goals before purchasing something: “Keeping purpose in mind when making decisions removes reactivity and helps you think more holistically,” he says .
To that end, you should schedule time to review your finances quarterly. By periodically assessing how you’re doing and whether you need to make changes to your investment strategy, you’re planning calmly, without leaving yourself open to the panic and rash decision-making that can occur when you check your portfolio sporadically.
Limiting time on social media is another way to build resistance to online information overload. Putting distance between you and the cascade of constant online financial news and data will lead to less responsiveness (and the potential to ruin any good long-term progress you’re making).
You can curate your news feed to pay more attention to what you want and eliminate other noise. So move deliberately.
“Pick an important topic – taxes, account types, diversification, rebalancing – and think about it for a while until you feel you can explain it to someone else with confidence,” Egan says.
Most importantly, don’t take what the advertisements or social media echo chambers say about an investment at face value. Egan suggests seeking alternative viewpoints to avoid herd mentality and get a full picture of the good or service before purchasing it, considering its true impact on your overall financial goals.
“Try asking ‘why might this be wrong?’ rather than ‘why am I right?’” she says.
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