Bracing for tariff landfall: Ad budgets could tighten but local for global will prevail – Brand Wagon News

What do brands do first when money is tight? More often than not, they prioritise cutting costs. And advertising and marketing expenses are often among the first casualties when a company implements cost rationalisation.

No wonder India’s `1.1 lakh crore ad industry is bracing for US President Donald Trump’s tariff plan to make landfall. The industry is led by large global networks with big-ticket US clients on their roster. “The tariffs will affect the costs of these American firms domestically and that can in turn impact their global advertising budgets,” says Prabhakar Mundkur, director, strategy and business development at Percept Ltd. Back home, “a 7-12% contraction of ad budgets in affected sectors is likely”, he warns, albeit in the short term.

Two ad-heavy sectors — auto and retail — appear a bit jittery. Together, they spend over ` 15,000 crore annually across formats like TV, print, digital, and outdoor. “If these sectors pull back, the ripple effect on India’s advertising industry will be immediate and wide,” says Sindhu Biswal, CEO and founder of Buzzlab. While overall, the impact on Indian original equipment manufacturers in the auto sector is expected to be minimal, luxury brands could bear the brunt of Trump tariffs. Tata Motors, for one, is expected to be hit by Trump’s tariff as the US market comprised 33 per cent of the volumes of its luxury car arm Jaguar Land Rover in the first nine months of FY25, and around 23 per cent of its revenue in FY24. “If automakers are hit by cost increases, marketing allowances might be the first to go,” says Aditya Jangid, managing director of AdCounty Media. The auto sector contributes a third of India’s annual ad revenues.

Retail brands, which are already battling both global and domestic inflation, might need a relook at their budgets and media plans. “This may trigger a shift in strategy — less emphasis on splashy campaigns and more on low-cost digital formats with clear returns,” Jangid adds. OOH spends might suffer, say experts. Digital marketing may also be affected as several firms that export products through online channels like Amazon will be impacted by the tariffs, adds Mukul Goyal, co-founder of Stratefix Consulting.

While Indian textiles, engineering goods, electronics, and gems and jewellery exporters are immediately impacted, they are not exactly big ad spenders. But, as Russhabh Thakkar, founder and CEO of Frodoh, points out, “disruption in one lane rewrites the whole highway”. For instance, electronics brands may redirect funds from international campaigns to domestic messaging, while FMCG brands may shift focus to performance marketing and regional content to maintain consumer connect at less cost.

And that’s really the good news amid the turmoil.

Many global network agencies had already started the process of leaning towards industries less impacted by global trade tensions. “They are also emphasising data-driven marketing strategies and exploring alternative industries less affected by the tariffs to sustain their operations,” says Yasin Hamidani, director at Media Care Brand Solutions.

So it’s not all caution and cuts. India’s internal demand remains robust, providing much-needed stability. The upcoming festive season, the Indian Premier League, and 2025 elections in Bihar are expected to drive considerable ad spend. Over the longer term, this moment may even serve as a pivot point for Indian advertising. “Expect a surge in brands embracing a proudly Indian identity, leading to hyper-local storytelling and regionalised marketing strategies,” says Krishna Iyer, director of marketing at MullenLowe Lintas Group. “Local for global will become more than a slogan,” adds Ayush Nambiar, chief strategist & director at Flags Communications.