By Seb Joseph  •  March 18, 2025  •

Ivy Liu

The data reflects their hesitation. U.S. ad spending, once projected to grow at a modest clip, is now expected to contract more than previously forecasted. According to Brian Wieser, principal at Madison and Wall, the latest forecast, published today (March 18), places non-political ad spending growth at 3.6% for the year, a notable step down from the 4.5% growth forecast just a few months ago.

“When we made that original forecast back in December there was a pretty negative tone and there were a lot of risks to the downside, albeit with some possibilities to the upside,” said Wieser. “Now, while everything isn’t looking as bad as we feared, a lot is and some things are looking even worse.”

Translation: not “as bad as we feared” remains, in many ways, quite bad. Especially in the second half of the year when the slowdown is expected to take hold, once the full weight of President Donald Trump’s recent policy maneuvers settle in. The first quarter will post 4.0% growth compared to last year, though crucially, that figure comes with an asterisk. It’s being measured against an unusually strong first quarter from the previous year when ad spending surged by 10.5%.

Similar distortions are likely in the months ahead. Comparisons to last year’s figures will reflect a market that, for much of 2023, grew at an unsustainable rate. But that growth, Wieser warned, was a temporary condition. As the factors that had been propping up ad spending — pent up pandemic-era demand, stimulus-fueled consumerism and an overheated digital economy — begin to fade, the numbers will inevitably soften. The most recent earnings season bore that reality out, with CEOs across industries, striking a cautious tone, reflecting on a challenging fourth quarter and offering vague reassurance about the year ahead.

Yet, as Wieser noted, context matters. A 6.0% growth rate in the fourth quarter may appear anemic, but when stacked against Q4 2023’s 11.2% surge, the two-year trend is remarkably stable. The third quarter painted a similar picture: a 9.4% gain, cleanly building upon the previous year’s 7.9% growth. The lesson being that even in a cooling market, advertising remains a fundamentally resilient business.

The problem, of course, is the looming possibility of more persistent negative trends.

“Going into such an uncertain environment with marketers who are more and more short term oriented in how they commit to or refrain from committing to budgets that you’re going to see easing up of ad dollars,” said Wieser.

There’s a broader truth at play — one that predates this particular economic cycle. The events of the past three years have merely accelerated what was already an inevitability: advertising’s return to slow, steady growth after a period of uncharacteristic exuberance. Yes, the industry remains robust, with spending consolidating in key areas and digital channels continuing their steady march forward. But the days of double-digit growth spurts, fueled by the unchecked expansion of programmatic and social media, have ended. The only real surprise is how abruptly the shift arrived. President Trump’s policies were the accelerant.

“An optimist would say that the actions we’ve seen over the past week will be moderated by better judgement, or by the courts or the reaction from the stock markets,” said Wieser. “However, those are willfully optimistic perspectives. I see no evidence to support that view.”

And yet, some constants remain. If advertising has a gravitational center, it is digital media, which continued its upward trajectory through the fourth quarter. By last year’s end, digital platforms had grown 14.2% (including political spending) or 10.9% (excluding it). Search remained a steady force, rising 13.3% for the quarter and 15.8% for the year, while social media continued its strong trajectory by 17.5% in the fourth quarter and 17.4% for the year.

The same can’t be said for TV.

Excluding political ad dollars, television ad revenue slipped 0.9% in the fourth quarter and eked out just 1.7% growth for the year. Any optimism about the modest stability in these numbers was quickly overshadowed by the larger reality: Traditional broadcasters continue to steadily lose growth to the very platforms siphoning ad dollars away from them. Amazon, Netflix and their streaming peers surged ahead, growing by 24% in the fourth quarter and 31% for the year, now accounting for 13% of all national TV ad spending in 2024.

“Successful brands won’t just cut ad spend; they’ll adapt spending towards safer bets — proven strategies and digital media, rather than traditional media buys like TV (which will see significant cuts) due to their lasting resilience,” said Dan Meehan, CEO at ad tech firm PadSquad. “Another avenue that will be tapped into is digital channels with strong(er) measurement capabilities to ensure investments are paying off.”

That recalibration could spell big gains for certain pockets of the market. Commerce media, led primarily by Amazon but also bolstered by Walmart and other retail media players, maintained its momentum with revenues up 14.8% in the fourth quarter and 17.2% for the year. In a market where ad dollars are increasingly scrutinized, platforms that offer clear paths to purchase remain the safest bet.

But in a moment where economic policy feels more like a moving target than a foundation, uncertainty has a way of compounding itself. And when the red pens come out, advertising budgets are among the first to bear the weight of corporate caution.

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