What price free stuff?
Gratis goods always come with strings attached, and could end up costing a fortune.
I love free stuff as much as the next person, but I’m under no illusions that it’s actually ‘free’.
If you’re not paying for something, you’re not the customer – you’re the product being sold. This is a bit creepy when you think about it. Scoring free drinks at the bar on ladies’ night? You’re not a customer; you’re a product on display, being used to attract men.
Television has been doing this since forever. They gave us free shows to watch, and then sold our eyeballs to advertisers. Most people were happy to make this trade-off, because the creep factor wasn’t so obvious. Sure, the morning cartoons ran ads for kids’ toys and Happy Meals, but the targeting was pretty broad.
Now we’ve crossed into a new era of mega-creepiness. Every day, we use services like Google and Facebook to search for information, message each other, post and store photos, write documents, and generally go about our online lives.
If Google is free to use, how on earth is it worth a stonking US$579 billion (NZ$806b)? How is Facebook worth US$392b, when none of us are paying Mr Zuckerberg a cent?
The answer, of course, is that we’re not the customers. We’re the product, and we’re being sold to marketers for megabucks.
The online giants know far more about you than any spy agency. Some of it you’ve volunteered, like your name, age, and phone number. But they also know where you are at any given point in time (‘‘location services’’), what websites you’re visiting, what products you’re buying, if you prefer rap or trance music, and probably whether you’re a scruncher or a folder.
Every time you ‘like’ something, post a comment, or upload a photo, it’s logged in the database and fed into the mighty algorithm. Instagram and WhatsApp are owned by Facebook, so they’re mining all your activity there, too.
It gets creepier. Facebook buys more info from brokers who collate data from government records, credit bureaus, subscription lists, and online shopping databases.
All of this is compiled and served up on a platter to advertisers, who can target incredibly specific demographics. An ad pops up, and your impulse buying instinct is triggered. Kaching! The sale data is collected and logged, and the wheel keeps turning.
There are ways to destroy your online dossier, but they’re arcane and time-consuming. It’s better to be proactive. Browsing in Incognito or Private mode helps, as does being careful about what you choose to share.
If you’re not paying for something with cash, you’re paying with your privacy. You might be happy to make that trade-off, but you better be aware of it.
Physical freebies also come with strings attached. I avoid the free samples in the supermarket, because I can’t return the empty toothpick to the plate and walk away from the salesperson without feeling a pang of guilt or embarrassment.
This is because doing so violates the rule of reciprocity, a hard-wired social norm from our tribal past. Naturally, marketers have learned how to exploit this. As soon as we get something for free, we feel an obligation. The instinct is so powerful that it works even when the ‘gift’ is uninvited, or it’s something we don’t enjoy.
I recently visited a tourist spot which makes a point of being ‘free’. Immediately I was handed a glass of juice by the generous landowner, and waved through the gates. After returning from the underwhelming ‘attraction’, I had to run the gauntlet past the still-smiling operator manning the donation box. Sure enough, I stuffed in far more than I would have paid if it was an openly commercial relationship.
Salespeople were exploiting the reciprocity rule long before social scientists came up with a name for it. Back in the day, United States saloons used to offer ‘free’ food to anyone who bought a 123rf drink. The meal was salty – ham, nuts, salted crackers – which meant the punters would always buy more beer. This was a genius double-barrelled sales strategy, using the patrons’ psychology and physiology against them.
It also led to a famous saying that’s never been more relevant today: There really ain’t no such thing as a free lunch.
Got a money question? Email Budget Buster at richard.meadows@thedeepdish.org, or hit him up on Twitter at @MeadowsRichard.