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, paid 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.

Younger consumers are more tolerant of online ads but don't trust them much

New research results just released by Forrester suggest that consumers are becoming more tolerant of digital ads, led by Gen Z and Millennials, 34% of whom said in a survey that they are willing to tolerate ads while streaming video via smartphone vs. only 19% of older consumers.

Similarly, nearly half of younger consumers surveyed said that sponsored digital content holds their attention, vs 18% of older survey respondents.

But on the other hand, 34% of Gen Z and Millennials said they plan to upgrade their streaming subscriptions to ad-free levels, vs. 18% of older consumers.

Another variable in the mix is social media consumption, which averages 7.3 hours a week for Gen Z and Millennials vs. 4.6 hours for older consumers. That makes younger consumers the better market.

TikTok's algorithmic For You feed - which makes it difficult to distinguish sponsored content from genuine user-generated content - is credited with making users more tolerant of ongoing exposure to ads. Facebook, Instagram and YouTube have all now adopted similar formats based on short-form videos.

Ongoing exposure to ads is enhancing tolerance: increasingly, consumers of all ages - 56% of Gen Z and Millennials, 35% of older consumers - say today that they find online content from brands to be "interesting" .

Marketers like the results they're getting from paid digital media: 2/3 of decisionmakers surveyed said they plan to increase ad spend there.

However: although 90% of consumers say they are viewing ads on social media, only 37% say they pay attention to the messages received. And the level of trust is even lower: only 22% of Gen Z and Millennials and 12% of older consumers surveyed said they trust social media advertising. Figures for trust in sponsored posts aren't a lot better: 33% and 18% respectively.

Will Gen Z and Millennials retain their receptiveness to digital ads as they grow older, or will they become less liberal, more cynical? Watch this space.

Google cracking down on fake and paid positive Maps reviews

Google has published guidelines explaining how businesses creating or buying fake positive reviews on Maps will be penalized.

Fake or "incentivized" reviews will be removed, and actions will be taken against businesses using them, including but not necessarily limited to:

• New Business Profile reviews and ratings blocked for X amount of time
• Existing Business Profile reviews and ratings blocked for X amount of time
• "Shame badge" displayed on Business profile stating that fake/paid reviews have been removed

Types of prohibited and restricted review content that are subject to removal and penalties include:

• Content not based on a "real experience"
• Content not accurately representing the specific location or product
• Content posted as the result of an incentive offered by the business, such as payment, discounts, free goods/services
• Content posted from multiple accounts with intent to manipulate the rating of the business
• Content posted using an electronic or other device that mimics genuine engagement, manipulates data or results, or otherwise creates confusion

Per Google, merchants may not:

• Solicit or encourage the posting of content not representing a genuine experience
• Offer incentives for posting a positive review or removing/altering a negative review
• Discourage the posting of negative reviews
• Selectively solicit positive reviews from customers
• Post content on a competitor's profile that undermines the reputation of that business or its products

Google will notify businesses of penalties, which can be appealed.

Comment: Based on personal experience with other of Google's various appeals processes, I strongly recommend that you avoid getting penalized.

Go here for more on Search Engine Optimization for Google

Social media falling behind Google in sending traffic to publisher sites

A new report from social analytics platform Chartbeat shows that social media's share of traffic sent to news sites has dropped by a third - from 6% in January 2023 to 4% now. Traffic from Facebook is down by more than 40%.

In the same timeframe, traffic from Google Search has held steady at around a 17% share, the share of external traffic (from sites that are neither search nor social) has increased from 16% to 20%, and the traffic share of Google Discover - which offers personalized content recommendations in Google's mobile apps - has increased by 13%.

Panelists at the Online News Association's annual conference last week said that although a really strong SEO game generally translates into success with Google Search, they are still experimenting to see what works in Google Discover. Google recommends using "page titles that capture the essence of the content" but discourages "catering to morbid curiosity, titillation or outrage."

Who besides news publishers is benefiting from Google Discover? Watch for updates.

AI involvement lessens trust by double-digit percentages

Global market researchers Ipsos report in their latest Consumer Tracker report that Americans trust advertising, internet search and social media significantly less if created or enhanced using artificial intelligence (AI).

Consider in the way of a baseline reading that things American say they distrust least are:

• Friends (Fewer than 5% distrust.)
• Family (5%)
• Science and technology (8%)

And things they say the distrust most:

• Vote counting in US elections (30%)
• Federal Reserve (25%)
• Professional sports officiating (24%)

Politically, Democrats trust elections and the Federal Reserve significantly more than do Republicans.

Things survey respondents said they would most distrust more if created by AI:

• Social media influencers (+39%)
• Product/service reviews (+31%)
• Television advertising (+30%)
• Internet search results (+28%)

Also, across age groups, 58% to 69% of respondents said they prefer the following items to be created by humans, vs. 12%-18% who said they's prefer AI-created content:

• Online news
• Online marketing collateral
• News pictures
• Artistic photos or illustrations
• Movies, streamed or in theaters
• Videos for personal use

Persons aged 18-34 most liked AI-created content (19%-26% preferred), but that's still a minority vs. human-created.

Comments:

• Note that when AI is involved, distrust dominates over trust universally - often by 2 to 1.
• And respondents said they are 3X as likely to lose rather than gain trust if they find out you're using AI to create content.

Can consumers spot AI content? If not now, will they learn to do this? How soon, and what will happen then? Watch this space.