- Automotive and retail are leading a digital ad spending retreat as a result of tariffs, in line with a brand new eMarketer report. The researcher downgraded its full-year digital ad spending forecast for the U.S. by two percentage points, foreseeing 9.5% growth 12 months over 12 months to $338.27 billion.
- The auto sector is experiencing probably the most severe impact from the Trump administration’s trade policy, which has included steep levies on imported parts and vehicles. The industry’s spending on digital ads is anticipated to grow just 2.2% in 2025, well below eMarketer’s estimates last 12 months that foresaw growth of greater than 11%.
- Retail prospects have also dimmed, with the category expected to grow spending 7.4% to $92.64 billion. While other categories are more insulated from tariffs, with some even bucking downward trends, the findings offer an ominous signal ahead of the important thing holiday shopping period.
The extent of tariffs’ impact on U.S. promoting has been hard to pin down, partially as a result of the on-again, off-again implementation of levies on global trading partners. EMarketer’s latest report provides a clearer view into which businesses are getting hit the toughest, with particularly bleak outlooks for automotive and retail. The report also identifies a bigger push into performance marketing channels that may be easier to tie to business results but do little to construct long-term brand affinity.
The research looks past the push in marketing and sales activity that occurred immediately following the Trump administration’s announcement of sweeping tariffs, when firms stockpiled inventory and emphasized value ahead of expected price hikes. In auto’s case, demand has “cooled sharply” within the second half, with more brands ramping up a give attention to performance marketing, in line with Oscar Orozco, forecasting director at eMarketer.
EMarketer tracks retail as a broader category, encompassing every little thing from home goods (heavily affected by tariffs) to bars and restaurants (much less so). That said, retail also represents a broad swath of discretionary spending, making it vulnerable as consumers feel a pinch on their wallets. The report sets a dismal atmosphere heading into an uncertain holiday period that may be make-or-break for retailers.
“Overall, retail is responding to cost inflation and consumer caution by pulling back aggressively on large campaigns, while concentrating remaining dollars in highly measurable, sales-focused channels,” said Orozco.
Aligning with the broader shift toward performance marketing, retail media networks were described by Orozco as a “clear winner” from tariff-driven changes, with ad spending expected to extend 18.7% in 2025 to almost $60 billion.
Travel and tourism are one other victim of the pullback in discretionary spending while media and entertainment are experiencing more modest bumps within the road. Digital ad spending for the latter category is anticipated to surpass $30 billion for the primary time as platforms like Netflix, Disney and Warner Bros. Discovery battle it out for viewers who may cull the variety of services to which they subscribe.
Meanwhile, CPG is primed to see higher levels of digital ad growth than eMarketer anticipated in 2024, before tariffs were put into motion. The category will increase spending 7.9% to $55 billion versus the 6.1% growth predicted last 12 months. That’s to not say that tariffs aren’t stirring up disruption: While segments like food and alcohol will show “relative strength,” other areas like cosmetics are pumping the brakes on spending.
“The CPG sector is facing heavy tariff headwinds, as global supply chain disruptions and duties on inputs such as aluminum and raw materials have driven costs sharply higher,” said Orozco. “While consumer demand stays resilient in core food and beverage segments, inflation and price sensitivity are weighing on volumes, forcing CPG firms to make trade-offs in spending.”
EMarketer said mobile will command the lion’s share of CPG budgets in 2025 as the category increasingly relies on social media to focus on consumers, with 35% of the industry’s total digital spend heading for social networks by the top of the 12 months.
Read the complete article here
