By Seb Joseph  •  March 13, 2026  •

Ivy Liu

Madison and Wall’s latest update has made that tension visible: the firm raised its 2026 U.S. ad forecast from 6.6% to 8.1% (excluding political advertising) but noted that the economic assumptions underneath it were written before the conflict in the Middle East started. 

How much the conflict ultimately reverberates through ad spending remains to be seen. But it has arrived early enough, and with enough force, to put even the most cautious optimism on notice. As Luke Stillman, the firm’s managing director, put it, the accumulation of uncertainties around geopolitics, inflation, labour and tariffs “will eventually impact growth” – with the second half of the year the most exposed.

Because the economic consequences of a crisis don’t land in ad budgets immediately. They travel – through oil prices, through supply chains, through corporate margins and through consumer wallets – and that journey is rarely linear. It is, however, manageable since marketers have more flexibility than they’ve had in previous cycles. So much of their spend now sits in channels that can be turned up or down at short notice that the wait-and-see posture is easier to hold than it’s ever been. But waiting isn’t the same as being insulated. Eventually has a habit of arriving. 

“Short-term, I think advertisers keep their spending although some may change their allocation to more short-term,” said Ian Whittaker, a market analyst and founder of Liberty Sky Advisors. “A factor that is being overlooked here is that, so far, American and allied casualties have been astonishingly light for this sort of conflict. It’s harder to advertise if the body count is high.” 

It’s a brutal calculus. But it is the one the industry is quietly running. Wars that stay distant – geographically and emotionally from the markets that matter most to global advertisers – tend to be absorbed faster than those that aren’t. The machine keeps moving. The ads keep running. And the world, rightly or wrongly, keeps spending. Look at what happened when Russia invaded Ukraine in 2022. 

The IAB’s chief economist Daniel Knapp summed it up: “In the first year, we saw the market collapse by high double digits. But then a new normal emerged. In the second year of the war, ad spend started to climb again, particularly on performance channels. Lives went on. People wanted to continue. Brands wanted to inform consumers that they were still there, still available. A state of war doesn’t suddenly stop the advertising machine or consumer markets. The Ukraine example is the best demonstration of that in the modern world.”

True as that may be, history rhymes more than it repeats. Not least because the background music is always on shuffle. 

Unlike four years ago, the U.S. shopper was already showing signs of strain before the first strike on Iran. Pepsi cutting prices is a tell: the company had spent years passing cost increases through to shoppers, and the fact that it’s now reversing suggests people have hit their limit. A stretched consumer is a harder sell, and a CFO watching volumes will reach for the ad budget faster when the next set of numbers lands.

And it’s not just the American shopper who’s under pressure. China – the world’s second largest ad market and therefore a cornerstone of spending – has just announced its lowest GDP growth forecast in 35 years. When Chinese consumer demand slows, multinational advertisers follow. Budgets that were earmarked for reaching Chinese shoppers get pulled, platforms that depend on Chinese advertiser demand feel it in their revenue lines, and the ripple runs through agency forecasts and holding company numbers on both sides of the Pacific.