We humans are pretty poor at sizing up opportunities and weighing their costs, according to economists, behavioral scientists, historians, and pretty much everyone.
We don’t know what we don’t know, and sometimes what we think we know is just plain wrong.
Even worse, the sources we turn to when we are making a financial decision may mislead us.
As part of our new series ProtectYourWallet, the HelloWallet team is investigating the real cost of financial products and services, to help you make better decisions about your money.
How Banks are Like Snack Companies
The online marketplace for financial services and products serves up information much like a grocery store does. Goods are laid out and stocked in such a way to compel us to buy certain brands over others.
Eye-level shelf space goes to the highest bidder, with companies vying to put their potato chips front and center. The same is true online.
This week, our team uncovered just how much your clicks are worth to banks online, by looking at what they are paying for top placement in Google search results.
We are What We Search
When we enter our uncertainties, fears, and minor obsessions into Google’s search box we are expressing demand for information, and Google acts as middle man to the suppliers of information.
Companies who want our business jockey for better positioning in the ads section of a Google search through a bidding process. What they pay for a top spot can give us a sense of what our business is worth to them. For example, search terms like “free checking” costs a bank around $20 a click, and “IRA rollover” costs a whopping $27 a click to banks advertising these products and services.
In the image below you can see where the ads on the page are located, remember that the top spot can cost as much as $27 per click.
Remember, a bank may pay for better placement in addition to offering $50 to open a “free” checking account, and “free” IRA accounts. So, it begs the question: how do they then recoup these costs and make a profit?
We will explore risks to your finances as part of our ProtectYourWallet series, to help you overcome what John C. Bogle, founder of The Vanguard Group and fierce opponent of fees, calls the “siren song of the market.”
Spoiler alert: What we’re learning ‘Bogles’ the mind.