As brands and advertisers navigate the uncertainties surrounding President Donald Trump‘s new tariffs, there is a growing demand for more flexible advertising agreements. This flexibility would allow companies to quickly adjust their budgets or refocus their marketing strategies in response to the new duties, as revealed by sources involved in recent discussions between media firms and advertisers.
President Trump recently announced a minimum 10% tariff on all imports into the U.S., with significantly higher rates imposed on numerous countries, particularly China and Vietnam. The lack of detailed information and mixed signals from the White House have sparked conversations among marketing executives and media leaders about the need for flexibility in their advertising strategies.
Jonathan Gudai, CEO of Adomni—an AI-driven programmatic advertising platform—commented, “During this uncertain period, we’re witnessing a notable shift toward more adaptable, performance-based advertising models that allow brands to modify their spending swiftly as circumstances evolve.” The trend of programmatic ad buying has gained traction, with AI technology frequently integrated into the process.
Economic instability typically prompts companies to reduce their advertising and marketing expenditures. This potential downturn in the ad market highlights the broader implications of tariffs on businesses that may not directly face increased product costs.
According to Kate Scott-Dawkins, global president of business intelligence at GroupM, the WPP media investment group, tariffs are not the only concern reshaping advertisers’ budgets. She remarked, “While we had a positive outlook for U.S. ad spending growth in December, we will likely revise that down in June due to a combination of factors—rising inflation, layoffs, unemployment, and the effects of tariffs. All of these factors collectively will lead to a decrease in our expectations for the year.”
GroupM projects a 7% growth in the U.S. ad market for 2025, following an estimated $379 billion in ad revenues for 2024, excluding political advertising, based on a recent report.
Media companies are facing this uncertainty just as they begin to recover from reduced advertising budgets during the pandemic. For many media platforms, particularly streaming services and those with live sports rights, advertising has started to stabilize. However, traditional television networks continue to struggle with declining ad revenues as consumers move away from standard cable packages, with digital platforms and streaming services claiming a growing share of advertising dollars.
Certain advertising sectors, such as the automotive industry, have not experienced a rebound, leaving companies uncertain about how tariffs might affect their advertising budgets. Frequent dialogues with chief marketing officers at automotive firms have underscored this concern, especially with Trump announcing 25% tariffs on foreign automobile and parts.
This tariff announcement arrives just weeks ahead of the annual Upfront presentations where media companies make their sales pitches to advertisers.
Jonathan Miller, CEO of Integrated Media, a digital media investment firm, noted, “The general sentiment regarding Upfronts and the ad landscape is one of caution. There’s a greater demand for flexibility, and while it may not be perceived as recessionary, companies are being more conservative, leading to a slight dip in overall growth that is noticeable.”
Gudai from Adomni pointed out that traditional TV advertising may be particularly vulnerable to budget cuts, but brands will also have to adapt their strategies to compete for customers who may face rising prices.
“Tariffs could have a dual effect—raising costs, thereby tightening advertising budgets, while simultaneously increasing the necessity for targeted advertising as brands compete on more than just price,” Gudai explained.
Although media executives are willing to offer flexibility, they are also emphasizing that advertising during challenging economic times can bolster brand awareness and support long-term business growth. Some brands, especially those without physical storefronts, may find it prudent to maintain their ad spending. Scott-Dawkins noted that investing in TV advertising can still be advantageous, as it remains one of the most effective ways to reach consumers.
“In times when every dollar is scrutinized, brands need to do more than just sell—they must build connections. Purpose-driven marketing has become essential for earning trust and forming lasting relationships,” stated Andre Banks, founder and CEO of NewWorld, a marketing and strategy consultancy. “During uncertain periods, consumers tend to favor companies that have authentic values. Advertisers who recognize this opportunity will not only endure the downturn but will also emerge stronger once it passes.”
Brands and advertisers are increasingly seeking flexible terms in their agreements as uncertainty looms regarding the impact of President Donald Trump’s newly announced tariffs on their businesses. Recent discussions among media executives and advertisers have centered on how to allow companies to adjust their marketing strategies and budgets swiftly in response to fluctuations caused by these tariffs. Trump’s decision to impose a minimum 10% tariff on all imports, with significantly higher tariffs on certain countries like China and Vietnam, has prompted this shift. The lack of specific information and contradictory messages from the White House have led to heightened concerns, causing a push for flexibility in advertising agreements.
Jonathan Gudai, CEO of Adomni, notes a significant trend towards performance-based advertising models that enable brands to quickly adapt their spending based on changing economic conditions. This approach aligns with the growing importance of programmatic advertising, facilitated by digital platforms and artificial intelligence tools, which are becoming integral to media buying. Typically, during economic instability, companies tend to reduce their advertising and marketing budgets, which reflects how tariffs can indirectly affect the advertising market even for businesses not facing direct product cost increases.
Beyond tariffs, various factors are causing advertisers to reassess their spending strategies. Kate Scott-Dawkins, the global president of business intelligence for GroupM, indicates that previously optimistic forecasts for U.S. ad spending growth are now likely to be adjusted downward due to inflation, layoffs, and unemployment, combined with the uncertainty created by tariffs. GroupM’s forecasts predict a 7% growth rate in U.S. advertising spending by 2025, anticipating $379 billion in revenue for 2024, without considering political advertising.
Media companies had started to stabilize after suffering during pandemic-induced advertising budget cuts, particularly for streaming platforms and those with live sports rights. However, traditional TV networks continue to experience declining ad revenues as viewers move away from cable subscriptions, with the digital and streaming markets capturing a larger share of ad budgets. Certain sectors, such as the automotive industry, remain cautious about their recovery and how tariffs may influence future spending decisions.
As the advertising industry approaches the Upfront presentations—where media companies showcase their annual offerings—a sentiment of caution permeates discussions about overall advertising spending. Jonathan Miller, CEO of Integrated Media, notes increased demands for flexibility within advertising agreements, indicating a prevailing sense of hesitance that may slightly dampen overall market growth.
While many media executives are willing to accommodate demands for flexibility, they also emphasize the long-term benefits of maintaining advertising during challenging economic periods. This is especially crucial for brands that lack alternative channels to reach potential customers effectively. Scott-Dawkins points out that for some businesses, investing in TV advertising remains worthwhile, as television continues to be a powerful medium for consumer outreach.
Andre Banks, founder and CEO of NewWorld, highlights that in today’s market, where every marketing dollar is scrutinized, brands must go beyond mere selling. They need to forge connections with consumers. Emphasizing purpose-driven marketing is essential, as consumers are more likely to support companies that advocate for meaningful values during uncertain times. Ultimately, advertisers that understand this shift towards authenticity and connection stand to not only endure economic downturns but also emerge stronger in the long run.
