Ad spending forecasts rise as tariff fears fall
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Advertising analysts have revised their 2025 forecasts to reflect more optimism in the market, thanks to less trade policy volatility and more AI-fueled expansion.
Why it matters: Ad growth began to stabilize in 2024 after years of pandemic-driven volatility. Analysts were worried new trade policies would hamper spending, but so far, that hasn't been the case.
Zoom in: WPP Media, one of the world's largest ad-buying agencies, now says it expects the global advertising market to grow by 8.8% this year (excluding U.S. political advertising), up from 6% in June.
- Similarly, Brian Wieser — a top advertising industry analyst — raised his U.S. forecast for 2025, projecting 11% growth for 2025 (excluding political advertising), compared to 6% in June.
- WPP Media is so optimistic that is has increased its growth estimates for 2026, from the 6.1% it predicted in June to 7.1% now. In the U.S., Wieser believes the ad market will grow 8.9% next year, thanks in part to a boost in midterm political advertising spend.
What they're saying: "Although the U.S. administration unveiled punishing tariffs on almost all global markets in April, the effective tariff rates for many nations, after a flurry of negotiations, deals, dust-ups, and détentes, have been less catastrophic," WPP Media notes in the report.
- While consumer sentiment remains fragile and mild pressure from slowed economic growth and inflation persists, "the major policy swings of the past year ... have not yet produced meaningful economic headwinds despite the major risks these policy changes introduce," Wieser noted.
Zoom out: The growth of AI-driven advertising tools has also contributed to enormous growth in the sector over the past year, although most of that is being realized by large tech companies, not traditional media publishers.
- WPP Media's ad forecast, published biannually, finds that content advertising — or advertising against things like TV, radio and social media — continues to account for the biggest portion of overall global ad revenue (58%), but its share of revenue is shrinking as other ad categories driven by Big Tech firms continue to grow.
- Most notably, commerce and search-based advertising is expected to grow the fastest across all advertising sectors, fueled by the growth of companies like Amazon and AI firms like OpenAI.
Search advertising growth is also being fueled by new categories entering the space, including chatbot search, commerce search listings on platforms like Amazon and Walmart marketplaces, and social media searches on apps like TikTok.
What to watch: One of the biggest impacts AI is having on the ad sector's growth is that it's introducing new sellers and buyers into the market.
- Just as the rise of the internet created a slew of new companies in the 2000s that went on to become major advertising payers (Meta, Google, etc.), the AI boom is already driving hundreds of new platforms and enterprise software companies to spend more on ads to market their services.
