Warc has released a Q1 update for its global spend outlook for the year 2025. The update states a downgraded advertising spend this year. With that, advertising is expected to grow at 6.7% (versus the 7.6%) to reach USD 1.15 trillion, a downgrade of USD 19.8 billion.

The growth forecast for 2026 has also been changed to 6.3% - versus the 7% prediction earlier stated.

According to Warc this is due to 'prolonged stagflation' and 'outright recession'  exacerbated by new trade tariffs set to bite from H2 2025. Automakers, retailers and tech brands are most exposed.

The automotive industry spent USD 54.8 billion last year of which more than one in five (22.5%) dollars went to premium video formats – predominantly spots. Budgets are shifting away from linear TV and towards digital platforms, however, with more than half (51.1%) of automotive spend worldwide now going to search and social media.

The tech and electronics sector spent USD 84.3 billion on advertising last year, a bounceback of 25.0% following two years of decline (due to rising interest rates affecting tech startups) which was propelled by increased demand for microchips from AI and more fluid supply chains. 

Warc forecasts a 6.2% ad spend growth in this sector to USD 89.5 billion, a downgrade from the +13.9% forecast in November in large part reflective of new tariffs targeted at semiconductors. Both the OECD (+5.8%) and severe (+4.9%) scenarios point to a further cooling in growth.

Social media companies are expected to net USD 286.2 billion in advertising revenue this year, up 12.1% from last year and equivalent to a quarter (24.8%) of global advertising spend. Within this, TikTok (+23.6%), Instagram (+17.0%) and Facebook (+8.6%) are expected to see gains, as a long tail of advertisers leverage new generative AI tools to target consumers.

James McDonald, director - data, intelligence and forecasting, Warc, and author of this report, said, “The global ad market faces mounting uncertainty as trade tariffs, economic stagnation, and tightening regulation disrupt key sectors – leading us to cut growth prospects by USD 20 billion over the next two years. Automakers, retailers, and tech brands in particular are now reigning in ad spend amid rising manufacturing costs and mounting supply chain pressures.

He added, “Despite the growing volatility, digital advertising remains strong, led by three companies – Alphabet, Amazon and Meta – on course to control over half of the market in 2029. Regulatory scrutiny and uncertainty around TikTok’s future in the US further compound risks to growth, however, advertisers must be nimble in order to seize initiative in this shifting landscape.”