Dive Brief:
- Global advertising growth is tracking higher this year than previously expected, now forecast to rise 10.4% to $1.32 trillion, but the updated outlook comes with a major caveat, according to new WARC research.
- The Gulf energy crisis stemming from the Iran war could shave nearly $50 billion off of that annual total, representing 4.2 percentage points of growth. A potential blow to 2026 ad-spending momentum comes as 2027 was already anticipated to be a slower year, with expectations of 8.2% growth.
- If the conflict stretches on, WARC foresees an additional $44 billion lopped off 2027’s prospects, putting two-year losses close to $100 billion. The firm outlined three potential scenarios to consider as uncertainty again clouds the industry and pressures consumer discretionary spending.
Dive Insight:
The global ad market has remained relatively resilient in the face of recent economic shocks like U.S.-imposed tariffs. That situation could change if the energy crisis tied to the Iran war is prolonged into a multiyear conflict — a scenario that would drag 2026’s growth prospects from a sunny 10.4% into mid-single digit territory. Those same external pressures may also compound an already expected slowdown in 2027 for channels like social media that have powered a substantial amount of digital advertising activity to date.
In WARC’s baseline, or best-case, scenario, the Gulf crisis is resolved quickly and shipping returns as normal to the Strait of Hormuz, a major oil-trading route. Oil prices hold to $100 per barrel for roughly six months before normalizing at the tail end of the year, limiting inflationary knock-on effects to consumers. In this outcome, only the travel and transportation category enacts a meaningful cut to advertising spending due to fuel prices, pulling back 3.5% versus 2025 and erasing about $1.3 billion in value. Meanwhile, automotive, food, leisure and entertainment and technology maintain a comparatively robust level of activity. The end result is an ad market that grows 1.3 percentage points more than WARC estimated in its prior December outlook.
In the second scenario, where oil prices are elevated for several years, 2026 advertising growth falls by 1.6 percentage points, or about $19 billion, while 2027 records $13.3 billion in losses. WARC drew comparisons to the 1991 Gulf War in this case and said that ad spending forecasts for the food business could be halved compared to the baseline because of supply chain disruption.
The report then winds things back several decades to envision a worst-case scenario that may echo the 1973 oil crisis, with plunging consumer confidence and flat, anemic or downward growth for major advertiser verticals.
“Even in a contained scenario, an oil shock of this nature acts like a tax on consumers – pushing up prices while eroding real spending power,” said James McDonald, director of data, intelligence and forecasting at WARC and the author of the report, in a statement. “In a more prolonged or severe disruption, we move into stagflation territory, where sectors like travel, automotive, food and consumer electronics take a direct hit from both rising costs and falling demand.”
Assuming the worst outcome comes to fruition, 2026 still notches 6.2% in advertising growth. More uneasiness sets in looking ahead to 2027, when social media spending is anticipated to cool in line with waning hype around artificial intelligence.
WARC, now working with Omdia on quarterly social spending analysis by platform, said that Instagram’s annual rate of advertising growth will fall below 20% for the first time in 2027, to 15.5%, after rising nearly 27% to $101.6 billion this year. TikTok, a competitor, will remain above the 20% growth marker, but will see its rate of annual advertising growth drop more than 16 percentage points between 2025 and 2027.
Informa, which owns a controlling stake in Informa TechTarget, the publisher behind Marketing Dive, is also invested in WARC and Omdia. Informa has no influence over Marketing Dive’s coverage.
