The WARC Podcast Trump’s tariffs set to slash ad spend by $20 billion
Apr 8, 2025
James McDonald, Director of Data, Intelligence, and Forecasting at WARC, shares insightful analysis on the future of advertising amidst economic upheaval. He discusses how tariffs are projected to slash ad spending by $20 billion and dives into the impact of rising interest rates on tech advertising budgets. The evolving landscape of retail media, especially TikTok's role, is explored, along with the contrasting challenges facing the US and Chinese ad markets. Brands are reminded to adapt strategies to navigate this volatile environment.
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Trade Wars Impact Ad Spend
- The 2025 global ad market growth forecast has been reduced by $20 billion due to trade wars.
- This slowdown is driven by brands' hesitancy to commit ad budgets amidst volatile trading conditions.
Forecasting Model
- WARC uses a machine learning model to forecast ad market trends, incorporating ad spend, macroeconomic indicators, media consumption, and costs.
- Three forecast scenarios were generated, with the most severe (20% tariffs) now seeming likely.
Automotive Ad Spend Decline
- Automotive advertising budgets are declining due to tariffs, impacting both traditional TV and performance formats.
- This is compounded by microchip manufacturing issues affecting both automotive and tech sectors.