By Seb Joseph  •  May 8, 2025  •

Ivy Liu

And it’s hard to argue with him. At this stage even a rollback of tariffs might do more harm than good because what goes down could just as easily snap back up. The volatility itself has become the risk. 

“As of now, marketers appear to be in a phase of scenario planning, assessing the implications of possible changes to the flows of global commerce and as they sort these developments,” said IPG CEO Philippe Krakowsky. 

And there’s plenty to consider. Marketers are managing a confluence of pressure points – tariffs, inflation, shaky consumer sentiment – while trying to gauge just how much demand they can still drive. Many of the products they’re advertising are getting more expensive. After years of leaning on price hikes to protect margins, pricing power is stretched thin. And there’s only so much a brand message can do when shoppers are pulling back. 

Take Nestle. CEO Lauren Freixe put it plainly on last month’s earnings call: the company is trying to “cover costs while being mindful of the consumer capacity to absorb [them] in a competitive environment”. 

Simply put, ad spending is still happening, it’s just happening carefully. 

Procter & Gamble, another bellwether for ad spend, underscored the same caution. CFO Andre Shulton didn’t sugarcoat it. Ad budgets for the rest of the year are still very much in flux. 

“Investment levels specifically on media and advertising are flat in terms of percentage of sales,” Shutton told analysts on the company’s earnings call earlier this month. “But we have a very strong innovation pipeline in the balance of the year, which we intend to focus all investments on. What exactly is dollar spending? We’ll adjust as we see the plans unfold.”

Still, restraint isn’t retreat. So far, most companies aren’t slashing ad dollars – they’re keeping them flexible. In uncertain times, standing still can be just as strategic as making a move. But no one wants to fall behind either. Even in an economic fog, the fight for market share doesn’t stop. 

As WPP’s CEO Mark Read explained on the holdco’s earnings call: “Clients have learnt from covid and Ukraine that marketing is a cost in the short-term and an investment in the long-term and there’s no doubt that faced with pressures they balance those out.”

Little wonder then why CEOs are treating marketing, and by extension advertising, with more deference these days. Unilever CEO Hein Schumacher told analysts he spent part of the first quarter meeting with his top marketers to craft a new strategy for social media, dubbed the 4V model: variety of creators, volume, virality and velocity of content. In short: more creator-driven marketing, scaled fast and cheap.

“We want to really focus on that because the next stage in the transformation of Unilever is about creating a machine of demand creation both in marketing and sales.,” he said.

Even so, no one’s under the illusion that advertising alone can outpace the macroeconomic drag. The U.S. economy shrank in the first three months of the year, and consumer sentiment dropped to its lowest level since the 1990 recession. CMOs know the terrain is fragile. That’s why they’re choosing to move – but carefully. 

“The use of new technology to be able to do activities, which, in the analog world, were more expensive and took a longer time to happen, is something that we’re embedding more and more into the marketing equation,” said John Murphy, the chief financial officer at The Coca-Cola Company last month on the company’s earnings call. “The way in which we are planning our media using a much more sophisticated data set, et cetera, et cetera, is another opportunity to create the same, if not higher, impact more efficiently.”

Naturally, that shift is likely to benefit the media owners who offer the clearest returns – the ones with targeting, measurement and performance tools that help marketers prove every dollar still counts. In other words, platforms. 

Alphabet’s second quarter outlook said as much. 

“We’re obviously not immune to the macro environment, but we wouldn’t want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC-based retailers,” said Google’s chief business officer Philipp Schindler. 

Further down the stack, the outlook isn’t quite so steady.

Snapchat and Reddit offered cautiously optimistic forecasts for the remainder of the year but the tone was anything but exuberant. On the publishing side, Gannett fell short of expectations with $571.6 million in quarterly revenue, while Dotdash Meredith reported just 1% year-over-year growth in digital ad revenue – hardly the sign of a booming ad market. 

Put it all together and one thing is clear: yes, the economy is twisting under the weight of 100 days of Trump-era policy shocks — but based on the numbers, not much has structurally shifted just yet. Still, in boardrooms across the industry the mood is unmistakable. CEOs, CFOs and CMOs may not be seeing dramatic change in the data — but they’re definitely feeling it. 

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