Search Engines reveal drive for making money, indifference to savings
January 25, 2012
Search Engines reveal drive for making money, indifference to savings
In December of 2011 a two part piece appeared on NPR.org which examined the question of why Americans are bad at saving money. You can find part I here and part II here. One of the interesting statistics was that 50% of Americans could not come up with $2000 if they needed it in 30 days. This startling number represents a problem with savings, but is the issue that Americans are poor savers or is it that American culture does not promote good saving habits?
There is certainly enough evidence to demonstrate that the United States savings rate has been steadily declining for decades. According to a report on the average U.S. savings rate, produced by the Federal Reserve Bank of St. Louis, the rate of savings in the United States hovered between 8% and 10% since the late 1950s. After a high water mark of nearly 12% in 1981, however, at the time of the economic meltdown of 2008 that average rate of savings was down to about 2%. In less than three decades something happened across the landscape of American fiscal culture that somehow eliminated the average American’s ability or desire to save money.
Consider two sources that, while not necessarily scientific, provide some insight into America’s regard for money. This first chart is from Google Insights for Search, and compares the volume of search traffic across Google for the terms “how to save money” vs. “how to make money”. The former is significantly outperformed by the latter, meaning that Americans use Google more frequently to search for ways to make more money than for hints on how to save money.
These results are reinforced by examining daily exchanges across Twitter. Using a tool called trendistic we see in the chart below a ratio similar to Google Insights. The term “make money” is included in about .04% of all twitter traffic each week (which represents approximately 100,000 tweets per day), while the term “save money” clocks in at less than .01% per week (representing less than 15,000 tweets per day). Again these results would seem to suggest that the idea of saving money is nowhere near as appealing as making money.
What is responsible for the slow erosion of the habitual savings habits that have been in place since after the great depression?
If you turn, once again, to Google Insights for Search, you can find many examples on your own. For example, add two search terms into insights, the first being “apple ipad” and the second being “save money,” and set the time for all of 2011. There will be significantly more Americans searching for the slick tablet than there are searching for help on saving money. Go ahead and try this with most other popular products; they’ll likely win every single time. Even more interesting, these searches understandably peak when a new version of the device is announced or during the holiday season, but searches for saving money have no seasonal peaks; that traffic is flat all year long.
What has driven this pattern of behavior across our country? How did we transform from a country that mindfully placed 8% to 10% of our income aside to one that cannot even gather together $2000 in an emergency?
Much of it likely lies in culture; the desire to consume. From the dawn of radio to the advent of social networks the speed and reach of media has consistently and exponentially grown. Advertising, too, has evolved and has continuously improved the ability to generate ‘must have’ sentiment across an eager consuming public.
Advertising creates need and desire, and then serves to fill that need with product. There is a scene in an episode of AMC’s hit television show Mad Men that captures the essence of the objective of advertising beautifully. In this scene Don Draper pitches his firm’s idea for advertising Kodak’s newly developed wheel device for the slide projector. He discusses two elements of advertising that are essential. (1) Create an itch and slide your product in to relive the itch, and (2) establish a deeper emotional bond between consumer and product.
Nearly every living American today has been weaned on a steady diet of advertising; a constant and continuous flow of suggested need that is incredibly hard to escape. It digs deep into the essence of who we are as individuals. The culture wasn’t changed overnight, but the need to consume has been effectively taught to us as a nation since the dawn of mass media. We’re hit with it from every angle with words that resonate with us.
You’ve probably heard most of these: “It’s the most amazing iPhone yet.” “What you want is what you get.” “Just do it.” “Think small.” “Think different.” “Happiness is a cigar called Hamlet.” “I’m loving it.” “Good to the last drop.” “It’s everywhere you want to be.” “Because I’m worth it.” “Everything in life is somewhere else. And you get there in a car.”
What are these really saying? They’re asking, begging, almost commanding you to enjoy yourself, to let go, to indulge, and (ultimately) to be happy. And getting to that state of happiness starts (and ends) with their product.
It took decades and several generations to get to this level of advertising pandemonium. It’s a type of seduction that has weaved its way into the fabric of our culture. It drives us to spend, spend, spend our way to happiness; not to responsibly save. It’s not something that can be easily undone, and there are no easy answers or ways to reverse it. But the single most important thing we can do is actually pretty simple. We have to be conscious of its existence.
What do you think? Are we media obsessed, or is this hippie-speak and paranoia? Do you feel impervious to advertising’s lures? Let us know in the comments below!
This article was co-authored with Dean Vagnozzi, who is the founder and CEO of A Better Financial Plan. His approach to saving money has helped many of his clients do their part to create a culture of saving and live a tax free retirement.
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