One hour equals 50¢. Is social media fuelling your shopping addiction?

Did you know that every time you open social media, thousands of companies are bidding for your attention? Literally.

They are bidding in auctions to pay for eyeball time, paying per view for you to see their product, with its slick marketing campaign and shiny wrapping.

For every one hour of scrolling on social media, companies can spend up to 50¢ just on you. It may not sound like much, but that adds up to nearly $6 billion being spent on social media advertising each year. That’s almost 10 per cent of what our nation spends on defence.

To ensure they aren’t accidentally marketing aged care to teenagers or schoolies tickets to pensioners, the tech companies improve their marketing effectiveness by making it their business to know about you.

This is how they actually make money. Every like, search, click and purchase becomes another clue about what you might buy next.

Companies are bidding in auctions to pay for eyeball time, paying per view for you to see their product, with its slick marketing campaign and shiny wrapping.

When I checked the “Your algorithm” page on Instagram, it correctly knew that I like AFL, live music, and investing (shocker). And no surprise, I frequently get advertisements for nearby concerts and investment products.

According to Australia Post research, Australians spent a record $82.6 billion online in 2025, up 14 per cent on the previous year. The average household bought from 16 different retailers, more than double the number a decade ago.

In Australia Post’s accompanying consumer survey, 60 per cent of shoppers said they use social media to discover products, and one in two had bought something after seeing it there. Among Gen Z, 69 per cent use social media for product discovery.

Plus, with widespread buy now, pay later (BNPL) offerings, like Afterpay and Zip, there are more sneaky incentives than ever to try and get us to spend our money online. A large US study from Harvard University estimates that BNPL use increased total spending by about $US60 ($86) a week.

I don’t actually have a problem with using social media for shopping, especially if it saves you time. If I need a new pair of $25 sunglasses, a quick purchase of something that’s good enough is better than agonising over 20 different products for several hours.

The big problem is buying things that you don’t need.

Social media marketing can be very effective at convincing us to spend money on products that we wouldn’t have considered otherwise. And once bought, these items may quickly become clutter relegated to the back of the wardrobe.

So, what can you do about this?

Improve your spending habits

First, try and work out the size of the problem. Go through your last few months of bank statements and see how much you actually spent on online purchases. As I have written before, AI may be able to help you save time completing this exercise.

Next, stop the impulse buying. If you ever feel the need to buy something from social media, save the link and set a reminder for two days’ time. If you still want it when the reminder goes off, you can have it.

Common sense applies here, of course. Purchases over a few hundred dollars may warrant more than two days.

If you are still struggling with impulse buying, remove your saved cards from your devices and websites.

Research finds a cashless effect, where people tend to spend more when they do not hand over physical cash. So, forcing yourself to enter the card details every time you make a purchase adds a little friction and may make the purchase feel a bit more real.

And avoid using BNPL services, especially for impulse purchases. If you can’t afford it today, you probably shouldn’t be buying it.

Level up your social media privacy settings

On the social media side of things, you can reduce tracking and limit how precisely ads are targeted, although you cannot stop either entirely. The controls differ across platforms, but looking for “ad preferences” or “ad settings” and disabling as much as you can is a good first step. iPhone users can turn off app-tracking permissions under Settings > Privacy & Security> Tracking.

If you’re still struggling with your shopping habits after completing all these steps, it might be worth deleting the apps for a while.

Tech companies spend enormous amounts of time and money developing algorithms to keep us scrolling and make advertising more effective. It’s about time we put up our defences to protect ourselves, and our wallets.

Max Yong is a teaching fellow in personal finance at Harvard University. He previously taught personal finance at Melbourne University.

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