Inflation caused a “portfolio lock”. Here’s how it affects your audience. | Story

Americans are facing a once-in-a-generation event — record inflation — on the heels of a global pandemic. The one-two punch causes what Horizon Media’s Why Group calls “wallet lockdown” that makes people feel limited again. A first point to remember from the group’s study: everyone is affected by inflation, but not everyone is affected in the same way. And that means how radio stations and other brands approach inflation should vary depending on their target audience.

To better understand the impact of inflation on consumer habits and the status of the American Dream, Horizon Media‘s Why Group surveyed its Finger on the Pulse panel of 930 adults aged 18 and older. He also extracted and analyzed online conversations, content and financial reports.

“In order to understand the impact of inflation on Americans, you have to understand that it’s actually not a one-time effect,” said Maxine Gurevich, senior vice president of cultural intelligence for Horizon Media’s Why group during a radio Advertising Bureau. webinar Wednesday. “There are actually three segments that feel inflation differently, and that’s really important because it’s going to change the way you think about inflation messaging and your trading strategy.”

The research identified three segments – the resilient, the vulnerable and the anxious – with major differences in their level of concern about inflation, based on their political affiliation, psychological and financial outlook.

The resilient: Representing 41% of Horizon Media’s sample, this group is described as “optimistic, prosperous and financially secure”, with most of their assets being home ownership (73%). “They’re really not changing their spending habits,” Gurevich said. They tend to be male with an average age of 40, are more diverse, are likely parents, tend to be Democrats, and have an average household income of $74,000. How to connect to this group: “Reward and thank them for their continued loyalty, but avoid tones that might dampen their optimism,” says Gurevich.

The Vulnerable: Representing 30% of the sample, this segment is not well-off, has recently suffered financial difficulties and is pessimistic about its situation. They under-index homeownership and have more than double the student loan debt than other groups. “They have the least assets,” says Gurevich. “So while they’re not facing high interest rates, just owning a house in general right now is an impossibility.” They are mostly millennials, singles, renters, and Democrats. They have a Hispanic bias with an average family income of $49,000. How to connect to this group: “Helping them feel more in control of their lives, financially, acknowledging their pain points and helping to incentivize special offers with additional rewards.”

The Anxious: Representing 29% of the sample, this group is financially well off with significant success to their credit. Their earning capacity is low as most are retired or close to retirement. “Because they have most of their assets and their wealth built up in the volatile stock market and home ownership, they’re more nervous, they’re more anxious,” Gurevich says. The Anxious are baby boomers with an average age of 68, white-biased, married or divorced, lean Republican, and have an average family income of $59,000. How to connect to this group: “Providing assurance in any form of warranties or testimonials, which helps them eliminate long-term doubts and establish value is going to be important for this group.”

For radio stations considering contests, rewards programs and other ways to help listeners cope with inflation, Gurevich said it’s okay to offer the same prize or rewards to the three groups. But the message must be different for each of the three groups. “You can offer the program to all segments, but it really depends on how you talk about this program to each segment. For example, it could have regional or local nuances. Maybe they are over-indexing in a particular segment. Want to do that research first to understand how this particular group is most affected by inflation? And then think about your message about it on a very local level.

In other report findings:

  • Lockdown COVID spending habits are now locked down. COVID lockdowns have shifted spending habits from outdoors to home. Inflation cements these habits.
  • Wallet locking is ubiquitous. Simple pleasures are sacrificed while pain points persist. Heightened price sensitivity causes nearly three-quarters of people (72%) to reduce spending, and they reduce wants rather than needs. This could have a negative effect on people’s overall outlook and related expenses if it persists.
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