Brands and advertisers are seeking flexible terms as they face uncertainty about how impending U.S. tariffs will affect their businesses.
The push for more lenient agreements, in which companies could pivot budgets quickly or shift their focus to different types of marketing depending on how the tariffs shake out, has been the focus of conversations between media companies and advertisers in recent weeks, according to people close to the discussions.
President Donald Trump will announce the details of the new tariffs on imported goods to the U.S. later on Wednesday. The scarcity of specifics in recent weeks, and sometimes contrasting messages coming from the White House, have fueled conversations about flexibility between chief marketing officers and media executives, the people said.
“In this period of uncertainty, we’re seeing a significant shift toward more flexible, performance-based advertising models that allow brands to adjust spending quickly if conditions change,” said Jonathan Gudai, CEO of Adomni, an artificial intelligence-powered programmatic video-everywhere advertising platform. Buying ads programmatically, or through digital platforms, has taken up an increasingly large part of ad spending, and using AI tools are now often part of the process.
Unsteadiness in the economy often mean companies pull back on spending for advertising and marketing. The potential hit to the ad market underscores the ripple effect of tariffs on companies that won’t directly contend with heightened costs on products.
Tariffs aren’t the only factor causing advertisers to rethink their budgets, said Kate Scott-Dawkins, global president of business intelligence of GroupM, WPP’s media investment group.
“We were pretty bullish in our December forecast on [ad spending] growth for the U.S. I think we’ll probably end up curbing that in the June forecast, based on the confluence of impacts,” said Scott-Dawkins. “From the rising inflation plus layoffs and unemployment plus the impact of tariffs. I think it’ll be all those things together that lead to a reduction in our expectations for the year.”
GroupM forecast spending in the U.S. ad market to grow 7% in 2025, after totaling $379 billion in ad revenue in 2024, excluding political advertising, according to a recent report.
For media companies, the uncertainty also comes soon after they contended with tightened ad budgets during the height of the pandemic.
In some regards, advertising has stabilized for many media companies since the pandemic — especially for streaming platforms and those with live sports rights. But traditional TV networks still face lower advertising revenue as consumers shift away from the standard bundle of cable channels, and digital platforms and streaming gobble up a larger share of ad budgets.
Some advertising categories such as autos haven’t rebounded, however, and companies are unsure what tariffs will mean for spending, the people said. Conversations with chief marketing officers at automakers have been frequent, they added. Trump has announced 25% tariffs on cars and some auto parts not made in the U.S.
The tariffs also come weeks before Upfront presentations, when media companies make their annual pitch to advertisers.
“Everything I hear about Upfronts and the state of overall trading in the ad world is that it’s cautious,” said Jonathan Miller, CEO of Integrated Media, which specializes in digital media investments. “There’s much more demands for flexibility, and while it’s not recessionary, there’s a slight holding back…meaning a couple of percentage points of overall growth. Enough that is felt.”
Gudai of Adomni added that traditional TV will be one of the areas most vulnerable to ad budget cuts, but brands will also have to broaden their focus when it comes to competing for customers who could face higher prices on goods.
“Tariffs potentially create a dual impact — increased costs that may squeeze advertising budgets, but also greater need for targeted advertising as brands compete on factors beyond price,” Gudai said.
While media executives are open to offering flexibility, they’ve also been reminding brands that advertising during tough economic times can build brand awareness and help businesses long term, the people said.
Some brands are better served not cutting back on ad spending, too, especially if they don’t have brick-and-mortar stores or ways outside of marketing to get in front of potential customers. Scott-Dawkins said for some companies it’s still worth spending on TV ad spots since it’s still considered the most effective way to reach consumers.
“When every dollar is under scrutiny, brands have to do more than just sell—they have to connect. Purpose-driven marketing isn’t a ‘nice to have’ anymore; it’s how brands earn trust and build lasting relationships,” said Andre Banks, founder and CEO of NewWorld, a marketing and strategy consultancy. “In uncertain times, consumers gravitate toward companies that stand for something real. Advertisers who recognize this will be the ones who don’t just survive the downturn but come out stronger on the other side.”
