The part few people realize is that your first preference is vitally important to large and small parties alike for one reason - they get paid for it.
As per the Electoral Act of 2002, each candidate gets $1.20 for each first preference vote they receive, so long as they receive at least 4% of the first preference votes in their electorate. Oh, and that's an indexed figure, so by now it's probably more like $1.40.
So if you've ever wondered what your vote is really worth, now you know - a dollar forty.
Big fuckin' deal, I hear you think. (LiveJournal telepathy is one of my superpowers.) Who gives a shit about $1.40? Well, no-one. What politicians give a shit about is the sum of all those $1.40 payments - and most importantly, whether they qualify for the payment in the first place. Because while there may be several million voters in Victoria (to pick a state entirely not at random), the electorates are much smaller, and the 4% margin between getting paid and getting squat becomes pretty slim.
A quick trip to the Victorian Electoral Commission's website shows that there are 88 Lower House districts in the state, each with about 37,000 voters. That means that a candidate who gets less than about 1480 first preference votes misses out on the gravy train - hell, they even lose the deposit they had to put down when they were nominated. But if they hit the magic 4% number by even a single vote, they get their deposit back and get about $2070, and it keeps going up from there.
Again, so what? Small potatoes. But it's small potatoes that add up, across the state, to a giant fucking mountain of potatoes, enough to keep you fat and chipfilled for years - or more importantly, enough to pay for your party's expenses until the next election. The Big Two want the money, yes, but don't desperately need it - they have plenty of other funding options out there. But for marginal parties, this is their lifeblood, and it all matters. A party doesn't have to win - it just needs enough votes to stay viable. Witness, for instance, the Greens in Northcote 2002, who came a distant second to the ALP, but got more than $10,000 for their trouble - not a massive amount, no, but enough to make a meaningful difference.
Want a better example? One Nation. They only took one seat in their first Queensland outing, but made enough money from first preference votes around the state to become a major presence in the following years, until internal squabbling, innate stupidity and the machinations of Tony Abbott shafted them. They didn't have to win, they just had to make it over the 4% line in enough places; the rest is history.
And that example, I think, shows the major reason why the Labor and Liberal parties are so deadset against the 'protest vote', so quick to persuade you that you have to vote for one of the Big Two. It's not that they need your $1.40 - but they don't want anyone else to get it. If the minor parties don't get enough first preference dollars, they won't have enough funding to stay viable until the next election, and will stop being any kind of threat to the Old Boy's Club, who can get back to the serious business of sniping at each other while swapping policies back and forth. Entrenched power structures hate the idea of competition, and that's what first preference entitlements allow - they let you keep making your protest, election after election, rather than picking between clones preaching from the same bible of economic rationalism.
No matter the swing in your electorate, your first preference counts - counts like money in the bank. Spend it wisely.