That said, it’s not all doom and gloom. In fact despite the uncertainty, stagnation in key advertising economies like Japan and the U.K., along with declining job rates in the U.S., marketing spend appears to be holding up. 

“As of the second quarter, we are seeing a slow return to the spending levels we saw in the past year,” said Tom Swierczewski vp, media investment at agency Goodway Group. He echoed points made in recent weeks by holding company chiefs. Omnicom’s John Wren said it was “business as usual, for the most part” upon the agency group’s Q2 earnings release.

So, if top advertisers are cutting marketing investments, why the optimism?

What’s been going on?

Brand marketers at global conglomerates and small enterprises alike have been following the twists and turns of the tariff conversation since U.S. President Donald Trump took office in January. 

Starting in March, analysts made several corrections to ad spend growth forecasts. Madison & Wall, for example, downgraded its expectations to 3.6% annual growth, down from 4.5%. Downward adjustments from WARC, Dentsu and WPP Media followed, the latter principally due to lower projected ad spend in the U.S. Not great.

Most observers expected that if cuts in marketing investment were to be made, they’d show up in the third quarter of the year. But we’re more than a month in, and it seems executive caution hasn’t triggered an advertising recession after all. WPP Media still expects ad spend in the U.S. to grow 5.6% this year, well ahead of the country’s 2% GDP growth in the same period.

“We saw a slight pullback early on, right after the initial tariffs were announced, but since then we have actually seen budgets normalize as more clarity around policies is slowly provided,” said Taji Zaminasli, co-founder and managing partner at indie media shop AXM.

In other markets the weather’s sunnier. In total, ad spend across Europe, the Middle East and Africa is expected to grow 4.5% to $200.7 billion, per Dentsu. The IPA’s Bellwether report, a quarterly survey of top U.K. marketers’ spending intentions, found British advertisers reversing reductions in spending made earlier in the year. In July, the survey found 5.5% more marketers reporting a rise in ad budgets, compared to a 4.8% fall in marketers reporting budget increases in the previous quarter. And WARC increased its 2025 ad spend growth forecast 0.4% for the U.K. market, to 6.8% for the whole year.

All of which suggests marketers are confident that, though overall spending might be lower than previous years, they’re not peering over a cliff edge. “So far, what we’re seeing is a very healthy ad market,” said Madison & Wall analyst Brian Wieser. “Money is being spent despite current conditions.”

Aren’t tariffs affecting consumer spending?

Tariffs are the biggest variable affecting the advertising economy, for sure. Each deadline day has wrought havoc on the markets and, a recent estimate from Yale University’s Budget Lab suggested the tariffs, taken as a whole, could cost the average American household $2,400 in 2025. 

U.S. consumer spending is holding, for now. After-tax incomes grew 3% while consumer spending grew 0.3% between May and June and 1.4% in the entire second quarter, up from 0.5% in the first, according to the Commerce Department.

Per Wieser, that might be “the embers of the past contributing to current conditions”, and it might yet change as anxiety gives way to action. Consumer prices are beginning to rise, after all. Both domestic and international brands have copped to raising prices, including Adidas, Mondelez and P&G. Overall, consumer prices rose in Q2 at a 2.1% rate (2.5% excluding the food and energy categories), per Commerce Department data.

And if companies have to raise prices to protect profit margins, they might begin looking hungrily at other areas of the balance sheet. Black & Decker’s CFO Pat Hallinan, reflecting on the increases in price the brand had put in place in recent months, said the company had also observed a decline in sales volumes. The net result had been “a one for one offset price for volume trade off,” he told analysts; the firm recorded a 2% year-on-year fall in Q2 revenue. 

“The wider economy certainly has an impact on media spending. Market fluctuations cause advertisers to be more cautious with their investments,” said Goodway Group’s Swierczewski in an email. “We anticipate an overall slowdown in growth across some channels,” but he didn’t identify which channels.

So, where’s the upside?

As more brands find their hands forced on price, they’ll also have to think about how to communicate those changes and justify them to customers. “Some marketers make the argument that to defend against the rise of generics, you have to advertise to support your brand,” said Wieser.

After all, marketing done well does work. The $491 billion U.S. businesses collectively spent on advertising in 2024 directly stimulated $3.5 trillion in sales and $2.8 trillion in indirect sales, per a S&P Global Market Intelligence study published this week by The Advertising Coalition.

Every cent added to sticker prices gives marketers another reason to argue for budgets to remain intact. Or, as P&G CFO Andre Schulten put it on the firm’s earnings call: “Our job is to create our own tailwinds. Our job is to create category growth, and create an incentive for the consumer to return to the category and find value in our propositions every day.” 

That doesn’t guarantee backing for marketers or opportunities for agencies. But it is reason for muted optimism. “There is still risk from potential further escalation,” noted Zaminasli. “While we are fairly confident that the budgets we have will remain, we aren’t betting on incremental or opportunistic opportunities at this point in time.”

Wieser argued that having sight of the challenges facing consumer brands doesn’t mean they’ll cut back, just that they’re likely to stay nimble while investing. “CEOs have an awareness of challenges and risks and threats to growth, and they keep spending,” he said.