Ben Young
Ben Young
May 14, 2021

Edition #326 – Inflation Edition

Inflation, creator marketplaces and lots of B2B stats this week.

One big thing

The big chat was on inflation this week, Robin Sloan did a brilliant summary you should all read. I thought I’d endeavor to look at our industry and de-mystify what it might mean.

“Aphoristic Econ 101 definition of inflation is “too many dollars chasing too few goods”, which is actually pretty useful.”

For us that means more competition on talent, advertising, resources. As Robin points out, its not like we live in a perpetual auction, with rates going/up/down all the time. 

But wait, on advertising we do. And if we peek Gupta Medias dashboard, which shares publicly the average CPM across their (tend towards) ecommerce Facebook spend. We see CPMs going from $2.25 in 2019 to $2.68 in 2021. The $1.44 in 2020, is well, hard to examine.

Even these snapshots are hard to examine, as the CPM is very volatile, swinging up and down, as compared to prior when it was flatter.

The other side of the inflation equation is too few goods. And this anecdotally seems very valid in some areas. With companies pulling back or consolidating, there tend to just be less products or services available in market. Yet more freelance talent available. 

The thing to watch out for is deflation, where consumers want to hold on to their purchasing power, so wait to buy products, even amongst falling prices, if they wait a bit longer, they’ll get a better deal. But the providers of those services end up closing, so others drop prices and so it goes on. 

Again these things don’t happen in real time or with the flip of a coin but as trends they can compound meaningfully over several years.

A more ideal outcome is modest inflation, small increase in prices.

Notable stories this week


Campaign of the week

  • 8 Family Trips that will instill a love for travel with your kids. Chase + Good Houskeeping. This certainly convinced me on San Diego!

Datapoints of note

That’s it for this week.