Amid economic uncertainty and rising tariffs, U.S. advertisers are recalibrating their budgets, according to the IAB 2025 Outlook Study September Update. The Interactive Advertising Bureau lowered its 2025 ad spend forecast from +7.3% to +5.7%, reflecting a more cautious outlook for the second half of the year.
While first-half spending largely met expectations (+7.0%), tariff worries and broader macroeconomic pressures are forcing buyers to trim projected spend for the latter half of 2025 to +5.0%, resulting in a more conservative full-year view.
Tariffs Trigger Budget Shifts
The study surveyed over 200 brand and agency buyers, revealing that 91% are concerned about tariff impacts, with industries like auto, retail, and consumer electronics most affected. Rising import costs are prompting advertisers in these sectors to rethink media strategies while maintaining performance goals.
Other top concerns for buyers include macroeconomic headwinds (41%) and shifting consumer habits (40%), highlighting the need for agility in planning and execution.
“The marketplace reacts poorly to uncertainty. With tariff impacts rolling through the supply chain, marketers are focused on flexibility while driving short-term performance,” said David Cohen, CEO, IAB.
Performance-Driven Channels Lead the Way
Despite the overall slowdown, digital channels continue to outperform:
- Social Media: +14.3%
- Retail Media: +13.2%
- CTV: +11.4%
Customer acquisition remains the top priority (64% of buyers), while repeat purchase campaigns have gained urgency, rising 8 percentage points versus 2024. Chris Bruderle, IAB VP of Industry Insights, noted, “If consumers are pulling back, every advertising dollar has to earn a return—especially for auto, retail, and consumer electronics.”
Traditional Media Takes a Hit
Linear TV is now projected to decline -14.4%, down from -12.7% in January, while other traditional media is expected to fall -3.4%, more than double the earlier projection.
Still, buyers remain optimistic about digital’s ability to deliver measurable ROI. “Budgets may tighten, but confidence in digital media remains strong. This update should help the industry navigate the remainder of 2025 and plan for 2026,” Cohen added.
Implications for Advertisers
The shift underscores a continued pivot toward performance-driven, measurable channels as advertisers grapple with uncertainty. Digital media’s dominance, particularly social, CTV, and retail media, is likely to accelerate as marketers prioritize efficiency and ROI over broad reach.
