Have you noticed your paycheck doesn’t go as far as it once did?
We’ve all noticed how the price of everything adds up so much faster than it used to. Not that long ago, I used to keep a small rainy-day fund, just in case things ever got really bad. But, I stopped putting my spare change, all my nickels and dimes that fell under the car seat, into that jar several months ago. The dollars just aren't going far enough, and now I don’t have any change left to spare.
Look at the price of gas. Look at the price of food. The price of everything is going up and is not stopping. Don’t even consider looking at the price of having an evening out or you will never want to leave the house.
We have to pinch our pennies right now, but why? Partially, it's fall-out from the pandemic. Economically, in addition to medically, the world is still going to be recovering for some time. Partially, it’s because of the price of oil. If it costs stores more to move their products from the manufacturers’ warehouse to the store shelves, they aren’t going to just eat that cost themselves. They are going to pass that added expense on to the consumer. In the end, profit to the company is everything.
But perhaps an unexpected reason why prices have recently inflated so dramatically is marketing.
Marketing has become so ubiquitous that we fail to even notice it anymore. But if we look just a little closely, we’ll realize we can’t escape it.
Why is the all-pervasiveness of marketing important to take note of? Because it breeds a sense of normalcy on the surface, while driving up costs without consumers realizing that they are essentially paying for the ads that they are fed.
To some degree, advertising has always influenced a product’s price since companies factor in advertising costs into the final cost price for the consumer. Before the internet, advertisers paid to place ads:
And while they still do this today, the internet is now the advertising King and Queen.
But here’s where the cost of advertising online differs. Marketers previously paid for a limited amount of space owned by a company. A magazine only has so many pages, and any half-hour TV show only has time for so many commercials. What the marketers were paying for was finite.
The internet is dynamic and therefore infinite. Yet internet companies charge advertisers top-dollar rates for a prized spot on search engine results placements. Analytics is the boss.
Want your ad to be at the top of search results? You pay the search engine. And of course, just like the stores that pass on to their customers the increased cost of keeping products on the shelf, companies pass on their increased cost of online advertising.
The bottomline? We pay more for the products that companies sell to us because it costs those companies more to advertise the products to us online. And since online ad space is unlimited, companies will keep charging customers more.
It’s a vicious cycle - and we, the consumers, are right in the center of it and paying the price.