Under the Radar

Jim Wasserman | May 23, 2022

RESEARCH SHOWS HOW subtle sales pitches, called nudges, can influence our buying. Think of tricks like putting the more expensive potato chips on eye-level grocery-store shelves. Over time, such nudges create spending habits. Those habits become ingrained, nonthinking ways of dealing with money.

A collection of such poor habits begun in childhood can result in a hard-to-alter lifestyle of poor saving and foolish spending. Even worse, nudging sends a stealth message, especially to children, that your worth isn’t so much who you are or even what you do, but what you have.

Today’s most effective pitches are “under the radar,” a marketing term that means they’re so subtle the consumer may not be consciously aware of them. Think product placement in a movie. It can work without us even noticing.

Over the past 30 years, the primary avenue for messaging has evolved from cable channels, to streaming services, to today’s popular social media and internet channels like YouTube. Social media and internet salespeople are now disguised as “influencers.”

These are media personalities, like Ryan Kaji, whom kids and young adults enjoy watching for entertainment. What viewers don’t realize is how often the influencer is selling. The casual off-hand mention of a product—which is actually scripted—or having guests wear a promoted brand are among the under-the-radar techniques that are used. Like children, adults can also be influenced, including their financial decisions.

Psychologists have recently identified the extra nudge of what they call a parasocial relationship. This is when a fan feels a bond born out of affection for a celebrity. The celebrity isn’t aware of that particular fan, so the relationship is one-way. But the viewer still feels an affinity, connection or even “friendship” with the celebrity that makes him or her open to consumption suggestions. Think of “Swifties,” Taylor Swift’s ardent followers. The celebrity expresses seemingly earnest appreciation for fan support—along with a nudge that fans should show that support through more consumption. Scripted authenticity is powerful.

The result is that young consumers—younger millennials plus the Gen Z generation born since 1997—are having lifelong financial habits and spending triggers molded without them even being aware of it. Marketers know it works better that way.

Researchers are now figuring out the tools of persuasion that can turn consumers into habitual spenders, thereby grooming them to serve the industries that feed off their dollars. It’s not all doom and gloom, however. There are countermeasures. For adults, being aware is the best defense.

For kids, many schools are initiating media and financial literacy programs. The best guardian of your children, however, is you. You can be the primary influencer in your children’s development, helping them to develop sound financial habits and sensible spending judgments.

You can turn back the one-sided parasocial influencers with actual two-way conversations. Watch what your children watch—together. Make it a family event. Don’t criticize. Instead, ask your children what they like about this person or that show, and why.

You can also introduce them to the idea that people are trying to secretly nudge them in one direction or another. Can your children figure out the trick? Tots to teens love to say, “I see what you’re doing.” Harness that. There are also media literacy organizations and personal finance education websites that will help you, along with articles on HumbleDollar.

Some parents say they don’t have the time or energy to constantly monitor the messaging to their child, or that they have more important priorities. Make no mistake: The marketers are counting on that.

Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He’s the author of a three-book series on how to teach elementary, middle and high school students about behavioral economics and media literacy. He’s also authored several educational children’s books. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. Together, they’re currently working on a book, “Your Third Life: Reflections on Finding Our Way by Taking the Long Route.” Check out Jim’s earlier articles.