Dive Brief:

• Global ad spending expectations for this year and next have been slashed by $19.8 billion due to higher macroeconomic uncertainty, according to an updated forecast from WARC.  
• The outlook was changed due to fears of stagflation and recession, with the implementation of tariffs poised to deliver a sharp blow to sectors including automotive, retail and technology in the second half of 2025. At the same time, major digital ad platforms are facing regularity uncertainty in both the U.S. and EU.
• WARC’s downgraded report, which reduces 2025 growth expectations by nearly a full percentage point, still sees the global ad market ticking up 6.7% to $1.15 trillion this year. The Ascential-owned firm joins a number of industry watchers whose tone is turning more pessimistic amid a mounting trade war.   

Dive Insight:

WARC is in the company of other ad spending trackers, including Madison and Wall and Magna, that have in recent days shifted their growth outlooks downward in response to trade war volatility. The researcher modeled out three scenarios, with the most severe one foreseeing 6.4% growth in ad spending in 2025 compared to the 6.7% growth baseline. 

Market uncertainty has been exacerbated by President Donald Trump’s chaotic approach to tariffs, which on Wednesday hit the automotive category with stronger force. Trump has repeatedly promised April 2 will be a “liberation day” when the U.S. will enact a broad range of reciprocal tariffs on global trading partners. 

Industries experiencing fallout from these policies are likely to peel back on marketing plans while the president has not ruled out a recession resulting from his economic agenda that would rattle a wider swath of businesses. Lower macro ad spending can be a leading indicator of a recession taking hold while consumer confidence has become increasingly grim. By category, WARC sees auto ad spending declining 7.4% this year while retail will be down 5.3%. Technology and electronics taken together are expected to halve their ad growth due to trade barriers that will affect manufacturing. 

Compounding the potential for pullbacks are regulatory challenges to large digital ad platforms such as Google, Meta, Amazon and Apple, according to WARC. Google last year was ruled to have an illegal monopoly on search, with proposed remedies including a spin-off of the Chrome web browser, a change that would carry industry-rattling implications for marketers. 

TikTok, which commands a much smaller share of ad spend but is nevertheless a significant driver of investment and cultural influence, is threatened with a ban on April 5 if it does not find a U.S. backer or if Trump does not again extend the deadline for figuring out an alternative ownership structure for the ByteDance-owned video app. Social media ad revenues are projected to increase 12.1% year over year to $286.2 billion, representing a quarter of global spend, per WARC.

“Despite the growing volatility, digital advertising remains strong, led by three companies — Alphabet, Amazon and Meta — on course to control over half of the market in 2029,” said James McDonald, director of data, intelligence and forecasting at WARC, in a statement attached to the report. “Regulatory scrutiny and uncertainty around TikTok’s future in the US further compound risks to growth, however, advertisers must be nimble in order to seize initiative in this shifting landscape.”