Brands and advertisers seek flexible terms, since they face uncertainty about how the new rates of President Donald Trump will affect their businesses.
The impulse for more indulgent agreements, in which companies could pivot the budgets quickly or change their focus on different types of marketing as they react to tasks, it has been the focus of conversations between media companies and advertisers in recent weeks, according to people close to discussions.
President Donald Trump announced that he would put a minimum tariffs of 10% in all imports to the United States, with much more pronounced tariffs in dozens of countries, including China and Vietnam. The shortage of details in recent weeks, and sometimes contrasting messages from the White House have fed conversations about flexibility between marketing directors and media executives, people said.
“In this period of uncertainty, we are seeing a significant change towards more flexible advertising models and based on the performance that allow brands to quickly adjust if the conditions change,” said Jonathan Gudai, CEO of Adomni, an artificial intelligence programmatic advertising platform. Buy ads programmatically, or through digital platforms, has assumed an increasingly large part of advertisement spending, and the use of AI tools are Now often part of the process.
In instability in the economy often means that companies retain spending on advertising and marketing. The possible blow to the advertising market underlines the domino effect of tariffs on companies that will not deal directly with high costs in products.
Tariffs are not the only factor that makes advertisers to rethink their budgets, said Kate Scott-Dawkins, Group Groupm Business Intelligence President, WPP media investment group.
“We were quite optimistic in our December forecast in [ad spending] Growth for the US. From the growing inflation more dismissals and unemployment plus the impact of tariffs. I think it will be all those things together that lead to a reduction in our expectations for the year. “
Group forecast spending on the United States advertising market will grow by 7% in 2025, after a total of $ 379 billion in advertising revenues in 2024, excluding political advertising, according to a recent report.
For media companies, uncertainty also occurs shortly after they supported hardening advertising budgets during pandemic apogee.
In some aspects, advertising has stabilized for many media companies since pandemic, especially for transmission platforms and those with live sports rights. But traditional television networks still face lower advertising as consumers move away from the standard package of cable channels, and digital platforms and transmission increase a most part of advertising budgets.
However, some advertising categories, such as cars, have not recovered, and companies are not sure what tariffs will mean for spending, people said. They added that conversations with the main marketing officers of car manufacturers have been frequent. Trump has announced 25% of tariffs on cars and some car parts not made in the United States.
Tariffs also arrive weeks before presentations in advance, when media companies make advertisers.
“Everything I hear about the subfants and the general state of commerce in the advertising world is that it is cautious,” said Jonathan Miller, CEO of Integrated Media, who specializes in investments in digital media. “There are many more flexibility demands, and although it is not recessive, there is a slight retention … which means that a couple of percentage points of general growth. Sufficient.”
Adomni Gudai added that traditional television will be one of the most vulnerable areas to advertising budget cuts, but brands will also have to expand their approach when it comes to competing for customers who could face higher prices in goods.
“Tariffs potentially create a double impact: greater costs that can squeeze advertising budgets, but also a greater need for specific advertising as brands compete in factors beyond the price,” Gudai said.
While media executives are open to offer flexibility, they have also reminded brands that advertising during difficult economic times can create brand awareness and help companies in the long term, people said.
It is better that some brands also serve not to cut the spending on advertisements, especially if they do not have brick and mortar stores or out of marketing to face potential customers. Scott-Dawkins said for some companies that it is still worth spending on television advertising points, since it is still considered the most effective way to reach consumers.
“When every dollar is low scrutiny, brands have to do more than sell, they have to connect. The purpose marketing is no longer a” pleasant to have “; it is how brands gain confidence and build lasting relationships,” said Andre Banks, founder and CEO of Newworld, a marketing and strategy consulting. “In uncertain times, consumers gravitate towards companies that represent something real. Advertisers who recognize this will be those who not only survive the recession, but are stronger on the other side.”
