Marketers are increasingly hesitant amid a backdrop of economic uncertainty, driven by ongoing trade tensions, inflationary pressures, and the residual effects of prior interest rate hikes. This hesitation has translated into a pullback in ad spending as brands struggle to navigate a volatile landscape. The unpredictability of market conditions has made it difficult for advertisers to commit to long-term strategies, reflecting a broader sentiment of risk aversion within the industry.
New projections show a clear deceleration in ad spending growth. Brian Wieser of Madison and Wall revised his non-political ad growth forecast for the year down to 3.6%, compared to the 4.5% forecast made just months earlier. Though the current climate isn’t as grim as initially feared, several economic signals remain troubling, particularly in the latter half of the year, when the cumulative impact of President Trump’s policy decisions is expected to weigh more heavily on the market.
Ad Market Stabilizes as Pandemic Boost Fades and Long-Term Growth Normalizes Gradually
The first quarter of the year shows a 4.0% growth in ad spending, but this is misleading due to a strong base effect from 2023’s unusually high 10.5% growth in Q1. As the post-pandemic surge, stimulus-driven consumer spending, and digital boom recede, the ad market is settling into more modest territory. Recent corporate earnings calls echo this reality, with CEOs acknowledging a cooling market and setting cautious expectations for the year ahead.
Marketers Cut Back on Ads Amid Economic Uncertainty, Favoring Digital Channels With Measurable ROIDespite the downshift, advertising shows signs of long-term resilience. While quarterly growth figures are slowing — for example, Q4’s 6.0% growth pales against 2023’s 11.2% — the two-year trend remains relatively stable. Digital channels continue to lead growth, cushioning the overall industry. However, the ad market’s cooling trajectory highlights an overarching return to steady, sustainable growth after a period of excessive expansion.
Digital Platforms Surge as Marketers Prioritize Measurable ROI and Abandon Traditional Media Buys
Digital advertising remains the cornerstone of growth, with search and social media posting impressive annual gains of 15.8% and 17.4%, respectively. In contrast, traditional TV continues to lose ground, with ad revenues declining or stagnating. Streaming platforms like Amazon and Netflix are rapidly absorbing ad dollars, growing their national TV market share to 13% by 2024. Brands are increasingly prioritizing measurable, performance-driven digital platforms over legacy media buys.
Marketers are not simply cutting ad budgets — they’re reallocating them toward channels with clearer ROI. Commerce media, particularly platforms like Amazon and Walmart, are benefiting from this shift, offering a direct path from ad exposure to purchase. As economic uncertainty persists, advertisers are gravitating toward platforms with strong measurement capabilities and predictable returns. In this environment, agility and data-backed decision-making have become more critical than ever.
