President Donald Trump’s tariff policies have created uncertainty in the advertising market, with forecasters now projecting multiple scenarios for how the rest of 2025 might unfold.

“Let me tell you how much fun it has been to be in the forecasting world over the last month and a half,” said our analyst Ethan Cramer-Flood on a recent episode of “Behind the Numbers.” The rapidly changing tariff situation has forced our analysts to develop scenario-based projections for the first time since the onset of the Covid-19 pandemic.

Three scenarios for ad spending in 2024

Tariffs mean uncertainty for advertisers, leading our analysts to develop three potential scenarios for total media and digital ad spending:

• Best-case scenario: If trade tensions ease quickly, total media ad spending could see a drop in growth from 2024, but healthy expansion nevertheless.
• Moderate-case scenario: If current conditions persist—with reduced tariffs for most countries except China—growth could slow.
• Worst-case scenario: If tariffs revert to the original "Liberation Day" levels, the US could see its first decline in total media ad spending since 2009.

How marketers are responding to uncertainty

Rapidly changing tariff policies have made planning difficult for marketers.

• 94% of US advertisers are concerned about tariff impacts, with nearly half planning to reduce their budgets, according to the IAB.
• Among those cutting back, 60% expect reductions of 6 to 10%, while 22% anticipate cuts of 11-20%.

"The freezing of decision-making and the absence of investment is part of the reason that I'm more convinced than ever that H2 will show these pretty bad effects," said Cramer-Flood. "The entire US business community is frozen in place."

Marketers are responding by shifting toward safer, more proven channels and platforms. “They’re going to clamp down more on experimental spending and reallocate more towards safer bets like search,” said our analyst Zach Goldner.

This trend is likely to benefit the largest digital advertising platforms. "You're also going to see them lean harder into the triopoly, which means Google, Meta and Amazon," said Goldner. "They already have over 60% share of the digital ad market. I think we could see that continuing to grow as well this year too."

That said, platforms heavily reliant on Chinese advertisers like Temu and Shein will face significant challenges.

Why aren’t we seeing tariffs take down consumer spending yet?

Despite growing economic anxiety, consumer spending has remained relatively strong so far. Retail sales increased 1.4% from February to March, according to Commerce Department data.

However, warning signs are emerging. The University of Michigan Consumer Sentiment Index fell to 52 points in April—a historic low. The Conference Board's consumer index has fallen for five straight months, reaching pandemic-era levels.

The full economic impact of tariffs won’t be clear until after they’ve been in place for a bit as retailers work through inventory stockpiled ahead of tariff implementation. And implementation itself has been inconsistent. “Liberation Day started on April 2nd, beginning of Q2...but many tariff impacts were actually pushed back except for that of China,” said Goldner.

Listen to the full episode.

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