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Rising Inflation Reveals Cautionary Headwinds Moving Into 2022

 

Inflation hit a 30-year high this week as consumer prices continue to surge upward. The yearly U.S. inflation rate hit 6.2% and many economists are predicting inflation to exceed seven percent by year-end.

 

Worst of all, those increases don’t include food and energy prices which have double-digit increases. Your Thanksgiving turkey will cost you nearly 70% more this year and the gas in your car costs nearly 75% more as well to fill up your tank.

 

Who really knows when it will end?  America has never dealt with so many economic, political, and medical variables at the same time which make it difficult to accurately predict. All these factors plus COVID’s lingering effects make it impossible to believe any single ‘economist or politician’ espousing their opinions (or expert analysis).

 

Why is that?

 

Well, it’s important to note that economists primarily report on what’s happened in the past versus what ‘is likely to happen’ in the future. They are great at telling us ‘We are in a recession’ after analyzing 4-6 months of historical data. No crystal ball insight there! It’s no different than your favorite newspaper or TV sports columnist telling you about how the Dallas Cowboys won their game yesterday.

 

Essentially, I’m saying that economists are mostly reporters when it comes to inflation. Not all, but most are in our opinion.

 

However, there is some good news from an advertising perspective. Media costs will be ‘flat to mostly negative in 2022’ according to The PM Group’s Media Director, Bob Wills, due to lower demand from many business categories. In particular, severe cuts in automotive spending and many other retail categories will have media sellers sharpening their pencils to attract advertisers and media buyers.

 

Every 5-10 years we see a significant rollback in media prices due to a market factor that is unusually different from the traditional economic factors that affect media pricing. The recent pandemic, the 2008 housing market collapse, and 9/11 are all examples over the last twenty years of these pricing rollback occurrences,” stated Wills. “The rollbacks are usually temporary for a 6–18-month period,” Wills added.

 

 

About The PM Group: The PM Group was founded in 1988. For over 33 years, the agency has continued to grow and is San Antonio’s largest advertising agency. The PM Group’s client roster spans numerous industries including home services, automotive, CPG, entertainment and sports marketing, legal, business services, non-profits, real estate and fitness. For two consecutive years now, the Agency has set annual revenue records with the addition of six new clients and through the continued success of our existing clients. Additionally, the agency hosts their annual Charity Gala that to date has raised millions of dollars for local San Antonio area non-profit organizations in the last 15 years! In 2020 alone, the Agency donated over $1,050,000 to local non-profits. It is our way of giving back to the community that we so humbly serve.

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