#United States #New York #economic trends #IAB #Ad Spend

IAB Adjusts 2025 Advertising Outlook Amid Economic Pressures

In a recent update to its 2025 Outlook Study, the Interactive Advertising Bureau (IAB) has revised its projections for U.S. advertising spending, reflecting increased macroeconomic concerns and shifting consumer behaviors. The adjustment comes as a response to rising tariffs and other economic headwinds that are creating uncertainty among advertisers.

According to the report, ad spending expectations for the second half of the year have been lowered by 1.6 percentage points, dropping from a previously anticipated growth rate of 7.3% to 5.7%. This change follows a steady first half where IAB's original forecast of 7.0% was met. However, sentiment has shifted significantly due to ongoing tariff issues that are particularly affecting high-dependency industries like auto, retail, and consumer electronics. Buyers are now projecting a 5.0% growth for the second half of 2025, which further contributes to a conservative full-year outlook.

Economic Sentiment Influencing Advertising Budgets

The findings are based on a survey conducted with over 200 ad buyers representing various brands and agencies. This survey sought insights into their growth strategies, anticipated expenditures by channel, and the challenges they anticipate facing. One of the most significant findings highlights that a staggering 91% of advertisers express concern about how tariffs will impact their media spending. Industries that heavily rely on imported goods, including automotive and electronics, are reportedly bracing for tighter budgets as they navigate this unpredictable landscape.

More than half of the respondents (between 62% to 69%) believe that these sectors will be the most adversely affected, resulting in rapid adjustments to their spending strategies. In addition to tariff fears, the two primary challenges outlined by advertisers include general macroeconomic conditions (41%) and evolving consumer habits (40%).

A Shift Towards Digital Media

Despite the downturn in growth projections, certain digital channels are expected to showcase impressive performance. Social media advertising is anticipated to grow by 14.3%, followed by retail media at 13.2%, and Connected TV (CTV) at 11.4%.

Chris Bruderle, IAB’s VP of Industry Insights and Content Strategy, noted a marked acceleration in the shift towards performance-driven media. As consumers tighten their spending, advertisers face heightened urgency to ensure every advertising dollar generates a return on investment. In this climate, the need to demonstrate clear performance through digital channels is more crucial than ever - especially for sectors undergoing strife due to external economic pressures.

On the flip side, traditional media's outlook remains grim. Linear TV is expected to decline by 14.4% compared with earlier projections of -12.7%, while other conventional advertising platforms are set to face a decrease greater than previously expected, moving from -1.5% to about -3.4%.

Positive Outlook Among Advertisers Despite Challenges

Even with the tightening budgets, there is a silver lining; many advertisers are maintaining a positive attitude about the potential of digital platforms to deliver measurable outcomes. David Cohen, CEO of IAB, emphasized that the current climate drives confidence in how digital media can provide essential results. He believes that even though advertisers are pulling back on spending, there remains a strong belief that digital channels can adapt and meet their objectives as they plan for the remainder of 2025 and beyond.

The full report, the 2025 Outlook Study September Update, provides a comprehensive look into the changing landscape of advertising, highlighting opportunities and strategies for growth amid economic difficulties.

For more insights on the current advertising landscape and its implications for the future, industry stakeholders can access the full study here.

About IAB

The Interactive Advertising Bureau (IAB) is a leading organization in empowering the media and marketing industries to thrive in the digital economy. With a membership exceeding 700 companies, including major media firms, brands, and agencies, IAB is at the forefront of evolving digital advertising practices. The organization actively conducts research and offers educational resources to promote the value of interactive advertising in contemporary marketing strategies.