“This is a massive hit for these U.S.-headquartered companies who serve a global economy,” said Eunice Shin, founder and CEO of brand consultancy The Elume Group. “It’s a massive increase in costs that they’re going to have to bear.”

While President Trump sees the tariffs as “medicine” to fix the U.S. economy, potentially bringing back manufacturing to the U.S. and prioritizing American-made goods, the first ripple effects of the tariffs will be economic pressure on companies that will likely lead them to cut their marketing spending. Marketers, already under pressure, will likely zero in on the effectiveness of their marketing spend to weather the storm.

Budget cuts and operational effects

“It’s fairly reasonable to believe that we’re going to see budget cuts as soon as Q2,” said Jay Pattisall, vp and principal analyst at Forrester. “Should the trade policies that are in place and the reactive trade policies from other countries stay the course, both of those forces will culminate and create a situation where budgets are cut as a result of that. How much, I think it depends on a number of factors.”

That said, companies are likely still focused on the operational effects before the marketing effects. As companies have been waiting to see what will happen with tariffs over the last few months, the plan for many companies to manage those tariffs has been to raise prices and now those companies are making that plan official, noted Kevin Simonson, CEO at ad agency adMixt.

The idea of companies moving their entire supply chain to the U.S. is far from simple, added Shin, as “those capabilities are no longer here” for much of the manufacturing happening overseas. “The operational and infrastructure investments to do that is too much to a point where it would absolutely cripple some companies,” said Shin. “So the current thought is that you keep it as it is, we’re going to have to pay these import tariffs and then those costs are going to be put back on the consumer.”

Once companies figure out the operation shifts they’ll need to make, whether that’s shifting manufacturing to a different country or other pivots they may have make, then companies will focus on where they can cut when it comes to marketing spend. “This always goes back to the fundamental mindset of do you view marketing as a cost center or a revenue driver,” said Simonson.

“The majority of companies will be in the position of having to raise the price of their goods, which is not something you want,” said Allen Adamson, brand consultant and co-founder of brand consultancy Metaforce.

When it comes to price changes, “marketers and CMOs always want to be upstream of these types of decisions within businesses,” said Dory Ellis Garfinkle, chief marketing officer of brand consultancy Siegel+Gale. “If you enter an organization as a marketer you’re simply informed about things that have been decided like pricing, product roll outs, timing, things like that. You are kind of only in a position to deliver. That’s not the best outcome for the customer experience or the brand or the ability to drive quality and consistency over time.”

Of course, the job for marketers isn’t just one of slicing and dicing ad spending to find efficiencies but navigating changing consumer sentiment as well as how they’ll need to shift marketing messaging.

Messaging the moment

While most marketers are still sorting out exactly what to do and say to consumers when it comes to the tariffs, there are first-movers in shifting advertising messaging to address the moment. Last week, Ford kicked off a new campaign, “From America, For America,” leaning into a nationalist message and offering “employee pricing” on its vehicles to appeal to consumers.

It’s unclear how common that American-made messaging approach will be among American-made brands. “There’s going to be a really delicate dance,” said Camila Caldas, senior strategist at Mother LA, of marketers sorting out positioning when it comes to American-made brands. “There are going to be companies that are American-made positioning themselves as a viable option for consumers in the wake of these tariffs.”

How companies do that will vary but marketers will have to figure out how to “maintain objectivity from the administration” as “leaning too hard into America first language, that might be considered by some to be politically charged and could be a huge point of alienation for them and their consumers,” added Caldas.

It’s also complicated for American-made brands — even if manufacturing is happening in the U.S. as there are often parts in the supply chain made outside of the U.S. As the Wall Street Journal broke down, Ford’s American-made trucks aren’t fully 100% American-made with parts from 24 different countries. “It’s not a clean story,” said Adamson.

When it comes to messaging the moment, most marketers are still in “wait and see” mode with hopes that the volatility when it comes to tariffs could swing the other way with delays or backtracking from the administration. Whether or not that comes to fruition isn’t something marketers can depend on but moving too quickly is a worry for them.

Should companies have to raise prices due to tariffs, few will likely call that out, according to brand consultants and agency execs, who say that marketers won’t want to call attention to higher prices. Instead, they will likely lean on messaging the quality of their products.

If there are messages around higher prices due to tariffs, those will likely be companies telling consumers that they’re taking the hit of the higher cost and passing on the savings to consumers with an “empathy play,” explained one creative agency exec who asked for anonymity.

With consumer sentiment already low due to the tariffs — it hit a four-year low in late March — marketers will not only have to figure out the right message amid the likelihood of increased costs passed onto the consumer but hope that those consumers keep spending.

Marketers will need to keep close tabs on who is purchasing their products in the coming months as the changing consumer sentiment could shift who a companies’ consumers are now. “Are you still talking to the same consumer at all?,” asked Siegel+Gale’s Ellis Garfinkle.

3 Questions with Chase’s global chief brand officer Leanne Fremar

There’s been a on-going debate of brand versus performance marketing with marketers trying to strike the right balance. Is that something you were thinking about with your new campaign, “Next Thing You Know,” which seems to be about the Chase brand rather than one product?

I would say we’re always doing both at a very high volume. One of the things that makes this particular piece of creative and campaign unique is that it’s talking about Chase in its entirety across many customers, segments and, internally, what we refer to as lines of business when we go to market across Chase. This was an opportunity for us to talk about all of the products and services that help people make the most of their money.

Is that something you’re thinking of doing more of as you’re plotting out the rest of this year? With this campaign, you’re using a country song and almost taking a music video approach to the spot.

We have a few big stories coming this year that I can’t talk about now. All of those amplify and bring energy to the brand halo of Chase but this one is unique in that way. … We’re doing it in a way that is a little more subtle than how we usually go to market with say Kevin Hart and our Freedom work where we’re very brand forward. Here we’re deliberately taking a back seat to moments in customers lives that have inspired us to make a piece like this.

How are you thinking about messaging now when it comes to the economic volatility of the market?

We’re always sensitive to what our customers and clients in small businesses are going through. If you look back to the beginning of the pandemic, we were helping customers navigate a lot of uncertainty. We are here to help customers navigate great times and also times of uncertainty. That’s the business that we’re in. I don’t think anything in our playbook has changed as a result of where we are right now except for that we have to continue to serve our customers and make sure that we are doing what they need us to do in these moments when they’re trying to navigate it.

By the numbers

Although streaming platforms are increasing their ad offerings, subscription fees still make up some two-thirds of streaming revenues, per eMarketer’s digital video forecast for Q1 2025. Subscription revenues now exceed advertising revenues for both streaming and traditional TV, with YouTube continuing to dominate the shift. — Antoinette Siu

• In 2024, traditional TV accounted for less than half of U.S. total video subscription revenues for the first time — with the share expected to decrease to around one-third by the end of 2028.
• Digital pay TV’s share of video subscription revenues is forecast to grow from 13.2% in 2025 to 15.4% in 2028.
• In 2027, digital sports viewers will exceed traditional TV sports viewers by 52 million.

Quote of the week

“If we start to slide into a recession, then marketers are going to have to be very focused on performance.”

— Bill Koenigsberg, CEO of Horizon Media, when asked about the tariff impact on media buying.

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