You need to keep track of historic inflation and expected inflation so you don’t agree to billboard lease inflators in excess of inflation.  Same thing applies to the renewal of ad contracts.   You need to get at least some increase in price on every ad renewal or inflation will be eat into your profits.

Inflation has averaged 2.1%/year for the past 10 years and only 1.36%/year for the past 5 years.

Here’s an interesting chart from the St Louis Fed computing expected annual inflation for the next 10 years based on treasury bond prices.   The Treasury bond market implies that inflation will average 2.08%/year for the next 10 years.

Insider’s take:  Keep your annual lease inflators to less than 2%/year or you’ll have costs which are rising faster than your ability to increase revenue.  Same goes for ad contract renewals.  You want to get what the market will bear but at least 2%/year to keep up with inflation.

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