Advertisers have become wary over fears of tariffs, pulling back on planned spending as they wait to see how the economy will react to President Trump’s plans.
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The Trump administration’s on-again, off-again tarrif wars have prompted more than just consumer concerns about inflation and tk. They have also stoked tariff worries among advertisers, which is creating a volatile media economy.
This in itself is not unexpected—after all, any economic doubt tends to make advertisers jumpy. They are generally risk-averse, from where they advertise to the ads themselves, and tend to retreat at the hint of controversy or uncertainty.
These concerns are reshaping the outlook for the second half of the year. New projections from the Interactive Advertising Bureau (IAB) indicate that U.S. digital ad spending will continue to grow but at a slower rate than it had originally projected, 5.7% versus an earlier projection of 7.3%.
The IAB 2025 Outlook Study September Update, based on a survey of over 200 buyers at brands and agencies, found that a staggering 91% of buyers have concerns about the effect of tariffs on media spending. The IAB says the auto, retail and consumer electronics ad segments are seeing those worries move to action.
Changes may include moving money from traditional media, much of which is bought on a longer timeline and can be harder to adjust on the fly, to digital. Of course, this historical cycle that has played out during past times of economic worry could be a boon to the IAB.
The IAB projects linear TV will decline 14.4%, sharper than its original prediction of 12.7%. Other traditional media will decline by an average 3.4%, more than twice as much as the IAB projected in January.
“In periods of economic uncertainty, flexibility is no longer a luxury, but a necessity,” says IAB CEO David Cohen. “Digital has been built on a foundation of agility and optimization since its inception. Digital allows advertisers to adjust spend in real time based on actual business performance. As tariff pressures and other macroeconomic uncertainties weigh on business decisions, advertisers are increasingly turning to digital channels that can adapt and perform. That’s why, even as budgets begin to tighten, we still are seeing double-digit growth in channels like retail media, social, and CTV.” Indeed, the IAB projects all three will grow by at least 11%.
In the final quarter of the year, advertisers will focus on short-term performance and shuffle budgets to reflect their current feeling on tariff reactions, the IAB predicts.
Tariff Worries Present A Double-Edged Sword For Advertisers
Tariffs stand to impact advertisers in two ways. First, for some, they are facing their own issues with the bottom line as parts for projects become more expensive and, in some cases, scarce. Second, advertisers fear customers will pull back on their own spending in response to the tariff volatility.
So far, that has not played out in the numbers, as the most recent consumer spending report, from August, showed a 0.4% increase in consumer spending—not atypical in a month when people often take vacations.
Still, advertisers are not convinced that will continue for the remainder of the year. To offset this uncertainty, buyers told the IAB they are taking actions including reducing overall spending, focusing more on performance campaigns, shifting spending to channels with better measurement, and negotiating flexibility and/or cancellation options into their plans during the end of the year.
Source: https://www.forbes.com/sites/tonifitzgerald/2025/10/03/tariff-worries-spark-advertisers-to-pull-back-on-2025-ad-spending/
