Traditional and Social Media Expected to See Greatest Tariff-Related Ad Spend Cuts

Advertising and consumer spending drive much of the US economy. But in the current century to date, two significant rounds of tariffs in 2002-2003 and 2018-2020 resulted in higher consumer prices and reduced ad spend.

A new report from the Interactive Advertising Bureau (IAB) finds that 94% of advertisers expect new tariffs to lead to reduced ad spending in 2025, and projects that spend in traditional and social media will see the largest cuts.

Ad spends on CTV, audio, search, podcasts and online video are projected to be least affected.

57% of ad execs surveyed said they are "extremely concerned" (57%) or "somewhat concerned" (37%) about tariffs having an adverse impact on ad spend in 2025.

Expected magnitude of ad spend reduction which is expected to peak in mid-2025:

• 6% - 10% (cited by 60% of respondents)
• 11% - 20% (22%)

Adjustments advertisers said they plan to employ in 2025 to address financial constraints imposed by new tariffs include:

• Reducing overall ad spend (45%)
• Increased focus on performance-based campaigns (35%)
• Shift to more measurable digital channels (29%)
• Adjust campaign messaging (28%)
• Negotiate for more flexibility (21%)

Separately, AdAge reports that US ad employment fell by 900 jobs in April - the fifth consecutive month of ad job losses. But there's increasing demand in digital marketing roles.