Dive Brief:
- Following the election of Donald Trump as president, The Wall Street Journal reports advertising industry executives are predicting a slowdown in spending next year.
- One immediate concern is if cars from Mexico are hit with Trump’s promised 35% tariff, which could directly impact advertisers’ bottom line as the automotive sector spends the most in U.S. ad dollars.
- Both Publicis Groupe CEO Maurice Levy and WPP’s GroupM global CEO Kelly Clark told the publication they see a pause in ad spending, particularly in Q1 as the industry figures out what sort of impact Trump will have on industry.
Dive Insight:
Investment tends to shy away from uncertainty and the ad industry is no different. The new president-elect could potentially bring the country into new territory, as it remains unclear how much support he will have from a large swath of the population. Comments made by Trump during the campaign about international trade, immigration and taxes also have business leaders concerned.
Overall executives are expecting a short-term effect rather than a long-lasting cooling of ad spending, but across the board the major ad industry players are planning on lowered expectations, per The Wall Street Journal. The two factors the industry will be most closely watching include how many of Trump’s various campaign promises actually come to pass and how the economy performs as the halls of U.S. begin the transfer in January.
The UK’s “Brexit” vote also led to concerns in the industry, but hasn’t had a clear impact on ad spending although WPP had a Q3 slowdown that CEO Martin Sorrell characterized as the “first signs of Brexit anxiety.”
While marketers consider a pullback on ad spending, there are some important takeaways from the election that suggest possible other routes for driving consumer engagement, such as social media engagement and the use of influencers.
