Inflation In Advertising: Three Ways to Successful Advertising

Inflation is just one of many economic factors that can significantly impact businesses in all sectors. Advertising spends are one area that has been hard hit by inflation. 


Ramzi Chamat / 8 Ways Media
2023-03-29 11:59:00

You may have noticed increased advertising expenses if you are a business owner. This is not a bluff. A recent report from Merkle, a top marketing agency, shows the effects of inflation on advertising spend.

Businesses are suffering from rising advertising costs

The Merkle report shows that advertising costs for all channels (digital, traditional, programmatic) have increased on average by 30%. Some channels see even greater increases. Advertising costs have risen due to increased demand and high production costs.

Advertising strategies and Their Impact

Businesses have had to rethink their advertising strategies due to rising advertising costs. According to the report, many businesses now prioritize their advertising spend and focus on channels that offer the best return on investment. Print advertising has seen its ad spending drop, though it is still very popular.

As businesses look for cost-effective ways of reaching their target audience, digital advertising is becoming more popular. Particularly, social media advertising has experienced significant growth because it targets younger consumers who are more active on social media platforms. Businesses can also use programmatic advertising to target their audience more precisely, which allows them to spend less on advertising.

Advertising strategies are based on data

This report highlights the importance data plays in advertising strategies. Businesses need to make data-driven decisions regarding their advertising spend. Businesses can use data analysis to better allocate their advertising budget. This includes deciding which channels will provide the highest return on investment.

Small businesses: The impact

Rising advertising costs have hit small businesses hard as they often have limited budgets. Small businesses find competing with larger companies for advertising space increasingly difficult. This has led to a decrease in their advertising budget. This could significantly impact small business growth prospects as advertising is crucial for attracting new clients and driving sales.

Small businesses turn to other advertising channels, such as email marketing and social media influencers, to overcome this problem. These channels are often cheaper than traditional advertising, allowing small businesses to reach their target market without spending much.

Consumer prices on the rise

Consumer prices have also been affected by the rise in advertising costs. Some businesses are forced to pass higher costs on to customers. This is especially true in retail, where there is increased competition from online sellers. This is causing a rise in consumer prices as retailers find it more difficult to maintain profit margins.

But not all businesses pass on increased costs to customers. Businesses may absorb increased costs and reduce profit margins to maintain prices. This can be especially effective in highly competitive markets where businesses must keep prices low to attract customers.

Three ways to successful advertising in these inflationary times

Nearly half (48%) of Americans say that inflation is their biggest concern. Consumers are feeling the pinch and don't expect it will change.

We have three key points to share with brands looking to market in these difficult economic times.

Advertising addressing inflation concerns specifically grabs the attention

Brands must offer convincing solutions to inflation that go beyond the surface level

Humour about inflation is funny, but it carries risks for some consumers

To succeed, it is not enough to be a valued brand. You need to keep your customers informed

Advertising conveys positive emotions and reassurance.

1. Specific concerns are what grab our attention

We surveyed consumers about the role of advertising and brands during economic uncertainty in September. 74% said they are interested in brands that can help them with the inflation crisis. 71% of respondents would like more advertisements featuring genuine value or price deals with no catch.

Mint Mobile's "Record Deflation" case study features Ryan Reynolds, actor and entrepreneur. He delivers a clear message to the audience with a simple message. He said, "We're cutting our costs in half." We found that this strategy impacted the audience, and it performed well in our evaluation. This resulted in strong brand awareness and behaviour change. It was funny and informative, and viewers liked it.

Mint Mobile's ad addresses the needs of consumers and is also a success because it offers a simple, convincing solution. This is the second key lesson.

2. Inflation solutions from brands must be persuasive

Nearly two-thirds of consumers (62%) want more advertisements featuring brands that address inflation. Mint Mobile has shown that brands do not need to avoid discussing economic uncertainty. Instead, they should find a way for consumers to solve their problems.

Brands should actively communicate their value proposition to consumers and solve inflation. It is not enough to simply add an affordability claim in an ad. Consumers want to feel they are getting the best deal for their money.

3. Humour can be a way to connect, but it comes with risks for some consumers

Looking at the current economic climate, 50% would prefer to see more humour in advertising to make an otherwise difficult economy more bearable. Only 13% would prefer less. 46% want to escape reality for a while, while 13% prefer less. Consumers are polarized, despite half of them being open to lighter advertising. Humour is a riskier option when addressing sensitive topics like economic distress.

Some consumers may not be able to understand humour. A major online retailer recently used humour to address current economic issues and tell people how shopping with them will save money. Although some viewers were offended by the celebrity's dry humour and sarcastic tone, mothers were the target audience. They liked the ad because it was relatable and entertaining.


Businesses in all sectors are affected by inflation's effect on their advertising spending. Many businesses have decreased advertising spending due to increased advertising costs. They now prioritize their advertising budgets and invest more in channels offering the best return.

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