Trump’s Tariffs Are Bad News For Anyone Who Relies On Ad Revenue

The Trump tariffs are official – and the impact on ad spend could be even more grim and wide-ranging than expected.

On Wednesday, President Trump announced 10% baseline tariffs on just about every country, including a few uninhabited islands. Certain countries, including China, Vietnam, Taiwan and the EU got slapped with even higher tariffs.

The tariff rollout was long anticipated. Trump campaigned on igniting trade wars with US allies and competitors alike. And following Trump’s election, forecasters had already revised their 2025 projections for US ad spend down in anticipation of tariffs causing brands to pull back on marketing expenditures.

Madison and Wall now expects US ad spend to grow by only 3.6% this year, down from its original projection of 4.5%. MAGNA dropped its projection from 7.3% growth for US ad spend to 6.3%. Both pegged tariff-induced uncertainty as the reason for their revisions.

In other words, forecasters expected tariffs would impact their advertising growth projections. They baked it into their numbers. But that was before we knew exactly how steep some of these tariffs would be – and now that we do, it doesn’t bode well for anyone that depends on ad revenue.

“Everyone gets hit: That should be your base assumption,” Brian Wieser, CEO and principal at Madison and Wall, told AdExchanger. “[And] it can get a lot worse.”

Worse, not better

Madison and Wall revised its projections in March, not long after the initial wave of tariffs imposed by Trump on China, Canada and Mexico in February.

“We characterized [the revised 3.6% growth rate] as a base case with a lot of downside possibilities,” Wieser said. “The base case assumption was that we’d have no economic growth and higher inflation.”

Given this new round of tariffs, “that still seems like a reasonable base case,” Wieser said, but he added that there’s now “an incrementally higher chance of an actual recession in addition to higher inflation.”

That means the base case is a bear case. “I can see downside cases from what we published in March, but I don’t see upside cases right now,” Wieser said.

Yet there’s always the possibility that these tariffs are just a negotiating tactic, he said, and Trump could remove them if certain other concessions are made. For example, the TikTok ownership situation remains a bargaining chip in any negotiations with China.

But the possibility of tariff reversals represents its own kind of uncertainty, Wieser added. And besides, even if Trump walks back some of the tariffs, the damage is already largely done.

“You can remove the Canadian tariffs tomorrow,” Wieser said, “but no Canadian business is going to plan on investing against the United States for decades.”

Winners and losers

CMOs, meanwhile, will be on the front lines in dealing with tariff-induced chaos.

Considering the worsening economic conditions already spurred by the tariffs – with the Dow Jones down 1,600 points Thursday and the S&P 500 down to its worst levels since 2020 – CMOs face some tough decisions as they react to changes in consumer spending.

But given the wide-ranging nature of these tariffs, “singling out individual industries as winners or losers isn’t possible at this stage,” said Ewan McIntyre, VP analyst and chief of research at Gartner.

Take service providers. They’re not subject to tariffs, which only affect the sale of physical goods. But that doesn’t mean marketing for clients that sell services won’t be affected by broader trends, McIntyre said.

Meanwhile, we might actually see “Made in America” appliance manufacturers like General Electric and Speed Queen ramp up their marketing, according to Marilois Snowman, CEO at independent media planning and buying agency Mediastruction. But discount retailers that sell a high volume of foreign-manufactured goods are in for a rough time, she added.

Plus, automakers are already showing signs of inventory constraints similar to those they experienced during the COVID pandemic, Snowman said. Stellantis, for instance, has already reportedly halted production at plants in Mexico and Canada. “That will certainly mean a pullback in auto advertising, which is a huge category,” she said.

It also seems obvious that manufacturers that depend on international supply chains will look for savings by curtailing marketing budgets, McIntyre said. But, he added, “There are too many unknowns with regards to the potential duration of US tariffs, the reaction from markets outside the US and their second- and third-order impacts.”

Still, there are some early indicators of changing consumer behavior that CMOs can incorporate into their strategies, according to McIntyre: “What we do know is that consumer confidence is low and buying cycles have extended for many higher-price items.”

CMOs will also have to contend with CFOs who are eager to cut marketing budgets. According to a recent Gartner poll, 62% of CFOs said they expect to cut expenses as of Q2 2025. Marketing budgets are often among the first to get cut, McIntyre said.

However, based on conversations Gartner has had with many CMOs since the start of the year, they’re doing their best to preserve their budgets. Good luck to them.

“The simple fact is,” McIntyre said, “it’s easier to cut ad spend than it is to walk away from contracts with agencies and mar tech vendors.”

Mid-market brands “have already been on edge and cautious about ad spending,” Snowman said.

“How much consumers will tolerate potential increased costs – and what happens with borrowing costs – will determine what happens with ad budgets in the next couple of quarters,” she said.

Publisher impacts

What seems clear is that CMOs will have to do more – or at least try to do the same – with less.

Which behooves marketers to “take an entirely fresh look at their channel plans” as they reevaluate how to spend their shrinking budgets, said McIntyre, adding that the strategies many brands built for 2025 “have been rendered invalid.”

As a rule of thumb, marketers tend to pull back on brand building and focus more on performance channels in times of economic uncertainty. That shift from branding to performance will likely be accelerated in the coming months, although it’s really just a continuation of existing trends, Wieser said.

“Generally,” McIntyre said, “channels with weak alignment to demonstrable business goals will be at risk if brands face significant budget cuts.”

Search, therefore, could be a big winner, he said, based on current indicators and past periods of disruption. Search advertising was the highest-ranked channel in Gartner’s 2024 CMO Spend Survey.

“Despite increased CPCs and the threat of AI,” McIntyre said, “search is still regarded as the equivalent of investing in gold in times of volatility.”

Still, the major US-based search businesses – Google, Amazon and Microsoft – could face retaliation from foreign regulators, Snowman said. The same goes for Meta and other social platforms.

So, to put it plainly: No one is really safe from the far-reaching consequences of this emerging global trade war.