A downgrading of global ad spend
Expected global advertising spend has been downgraded. It is now forecasted to grow 6.2% this year to $1.16trn, a downgrade of half a percentage point from March due to growing market volatility, marketing firm WARC says in a new report. Key sectors such as retail (-6.1%) and automotive (-4.0%) are set to cut ad spend this year, while ad spend growth across technology and CPG (consumer packaged goods) brands is muted compared to previous rates.
The tech and electronics sector is expected to spend $90.3bn on advertising this year. This year-on-year rise of 5.5% represents a cut from a +6.2% forecast in March, and is a sharp slowdown from the 24.3% rise recorded last year.
“Tariffs are driving the sector to adjust go-to-market strategies, shifting investments toward less-affected regions or different product lines to buffer against hardware margin erosion”, the forecast says.
“Trade tensions are forcing major sectors to rethink their ad strategies. Automakers are cutting back amid rising costs and a pivot to performance media, while retailers tighten budgets as tariffs squeeze margins”, says WARC director James McDonald.
“Tech firms face growing uncertainty despite continued investment, and CPG brands are leaning into retail media as supply chains come under pressure. Across the board, agility is the new imperative.”
“AI propels Alphabet, Amazon and Meta to 54.7% market share outside of China”, according to the forecast.
Key findings:
- Growth forecasts for advertising spend have been downgraded further this year (-0.5pp to +6.2%) following an initial $20bn cut in March.
- Key sectors such as retail (-6.1%) and automotive (-4.0%) are expected to cut ad budgets in the wake of mounting tariff pressures on supply chains.
- Alphabet, Amazon and Meta are set to take a combined market share of 54.7% excluding China this year – equivalent to $524.4bn – rising to 56.2% in 2026.
- US ad market prospects cut by half a point to +5.2% as Chinese retailers such as Temu and Shein redirect spend to Canada, Australia and Europe.
- Global ad market growth is expected to accelerate to 6.5% next year, with a total of $1.23trn equivalent to almost $150 per capital.
- US ad market expected to post a +5.2% rise this year, less than half that recorded in 2024 (+13.5%) and has been cut by half a point since March.
- Canadian ad spend growth set to ease to 3.5% this year despite some Chinese advertisers redirecting spend from the US.
- The Chinese ad market continues to struggle with weak domestic demand; growth is set to slow to 7.2% this year.
- The UK, German, French and Japanese economies are all stalling and present a severe risk of stagflation over the forecast period.
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