Tariffs are cutting into digital promoting: The IAB has revised its 2025 U.S. ad spend outlook downward, trimming projected growth from 7.3% to five.7%. The cut reflects rising concern over tariffs and broader economic headwinds, with second-half growth now forecast at just 5.0%.
Marketers are reacting in real time: 91% of buyers say tariffs are affecting budget decisions, forcing brands to prioritize flexibility and short-term performance. Sectors depending on imported goods—automotive, retail and consumer electronics—are expected to feel essentially the most pressure as they juggle higher costs and heightened performance demands.
“The marketplace reacts poorly to uncertainty,” IAB CEO David Cohen said in a statement. “Marketers are laser-focused on maintaining the utmost flexibility while driving short-term performance that delivers on their business goals.”
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Beyond tariffs, buyers cite macroeconomic headwinds (41%) and changing consumer habits (40%) as their top two overall challenges for the remainder of the yr.
Customer acquisition stays the highest priority (64%), while the push for repeat purchases has grown by five points since January. Social (+14.3%), retail media (+13.2%) and CTV (+11.4%) are all still heading in the right direction for double-digit growth. Meanwhile, linear TV continues to slip, with spending now expected to fall 14.4% this yr. Other traditional channels are projected to say no by 3.4%—greater than double the forecast for January.
Other predictions
IAB’s numbers aren’t an outlier. eMarketer downgraded U.S. digital ad growth to 9.5%—two percentage points below its prior estimates—citing pressure from tariff-sensitive sectors such as retail and auto.
The U.S. headwinds are excellent news for other nations. WARC increased its global forecast to 7.4%, describing it as a “pre-tariff windfall” that disproportionately benefited digital platforms. Dentsu stays bullish on digital world-wide, forecasting 7.9% growth globally, with retail media up 13.9% and programmatic and search continuing to expand.
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These forecasts reveal two dynamics:
- Overall growth is moderating, but digital stays the driving force behind momentum.
- Variability across sectors and geographies is increasing, with greater volatility arising from trade policy, consumer sentiment, and platform evolution.
Despite the tightening, sentiment isn’t all bleak. Buyers remain optimistic about digital’s ability to deliver measurable returns, underscoring the broader shift: in a trust-and-results economy, every ad dollar has to prove its price.
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