The second quarter update of Warc’s global advertising forecast study found that advertising spend is expected to grow by 6.2% globally in 2025 to $1.16tn – a downgrade of half a percentage point based on Warc’s March forecast.

Major advertising sectors such as retail and automotive are set to cut their ad spend this year, according to the study, which also found ‘muted’ ad spend growth for technology and consumer-packaged goods brands, compared with previous rates.

Retail is forecast to decrease its advertising spend by 6.1% this year compared with 2024, reflecting pending increased costs for retailers due to impending US trade tariffs. Tariffs are also impacting CPG companies, technology and electronics.  

Warc’s most recent projections are based on data aggregated from 100 markets – including macroeconomic data, media owner revenue, marketing expenses from advertisers, media consumption trends and media cost inflation – and use a neural network to project advertising investment patterns.

At a country level, Warc’s latest forecast suggests the US advertising market – the world’s largest – will grow 5.2% this year to $451.6bn – half the growth rate recorded in 2024 (+13.5%) and representing a 0.5 point downgrade from the March forecast.

Warc attributed the downgrade in the US to issues including tariff uncertainty, disrupted supply chains and lower consumer demand. 

James McDonald, director of data, intelligence and forecasting, Warc, and author of the research, said: “The latest downgrade is attributable to a reticence to commit ad budgets across key markets in the second quarter. This cooling is underpinned by tariff trepidation and ebbing business and consumer confidence, prompting advertisers to front-load budgets and reallocate spend geographically, particularly towards Canada, Australia, and Europe.

“Trade tensions are forcing major sectors to rethink their ad strategies. Automakers are cutting back amid rising costs and a pivot to performance media, while retailers tighten budgets as tariffs squeeze margins. Tech firms face growing uncertainty despite continued investment, and CPG brands are leaning into retail media as supply chains come under pressure. Across the board, agility is the new imperative.”