NEW YORK—Amid growing concerns about the health of the economy and the economic turbulence being tariffs, the IAB has significantly lowered its advertising forecasts for 2025, with linear TV now expected to decline by 14.4% for the year.
The newly released IAB’s “2025 Outlook Study September Update: A Snapshot of the Latest Ad Spend Trends, Opportunities, and Strategies for Growth” found that ad buyers expect to spend less in the second half of the year than originally projected, leading IAB to lower its 2025 U.S. ad spend projection 1.6 percentage points from 7.3% growth to 5.7% growth. While the ad spend in the first half held steady with IAB’s original forecast (7.0% growth), new worries about the economy, driven largely by tariffs, pushed the second-half projection down to a 5.0% growth rate, driving a lower full-year outlook, the group said.
The IAB 2025 Outlook Study September Update is based on a survey of over 200 buyers at brands and agencies to understand their growth strategies, anticipated spend by channel, and the challenges they foresee.
The IAB survey found that tariff concerns are driving real-time budget reshuffles. A staggering 91% of buyers have concerns about how tariffs will affect media spending, and for sectors like auto, retail, and consumer electronics, that concern is escalating into action.
These categories, which are heavily reliant on imported products/parts, are being pressured to balance rising costs with unrelenting demands to perform. According to the report, 62% to 69% of buyers expect these industries to be hit hardest, and many are already adjusting spend strategies.
Amid tariff concerns, buyers cite macroeconomic headwinds (41%) and changing consumer habits (40%) as their top two overall challenges for the rest of the year.
“The marketplace reacts poorly to uncertainty. With tariff impacts starting to roll through the supply chain, there is a lot of hesitance as to where the economy and consumer sentiment will go over the coming months,” said David Cohen, CEO, IAB. “Marketers are laser-focused on maintaining the utmost flexibility while driving short-term performance that delivers on their business goals.”
The IAB research also found that buyers are focused on performance, with customer acquisition being the top goal (64%) and increased urgency on driving repeat purchases (+8 percentage points vs. 2024).
Those priorities seem to have helped digital media while accelerating the ongoing shift of ad budgets from traditional TV to digital.
Even with the full-year ad spend forecast revised downward by 1.6 points to +5.7%, key digital channels are still expected to post double-digit growth, with IAB predicting social media spending will grow by 14.3%, retail media will see a 13.2% pop and CTV will increase by 11.4%.
“In our January report, we saw real concerns about the economy, and a shift toward performance-driven media. Now that shift is accelerating. If consumers are pulling back, that means every single dollar of ad spend has to earn a return — and that’s more important than ever for auto, retail, and consumer electronics advertisers,” said Chris Bruderle, vice president, industry insights & content strategy, IAB.
That is also driving a shift from traditional media. The IAB is now predicting that linear TV will decline -14.4% compared with IAB’s January projection of -12.7%. Other traditional media will decline more than twice as much as projected in January (-3.4%, compared with -1.5% earlier this year.)
“The silver lining in all of this is that the overall attitude of buyers remains positive. Budgets may tighten somewhat, but they’re confident that digital media can deliver the measurable results they need,” concluded Cohen. “This update to our projections should help the industry make the most of the remainder of 2025 while keeping an eye on 2026.”
The latest “2025 Outlook Study September Update: A Snapshot into Ad Spend, Opportunities, and Strategies for Growth” is available here.
