The growth of the global advertising market for 2025 is expected to drop by half a percentage point to +6.2% — a total of $1.16-trillion — according to advertising research organisation Warc’s global advertising spend outlook forecast update for 2025/2026.
This marks a further cut from an initial $20bn reduction in March.
The primary drivers behind this cooling are increasing tariff pressures on supply chains and a decline in business and consumer confidence. Advertisers are responding by front-loading budgets, and are reallocating spending geographically, particularly towards Canada, Australia and Europe.
Key sectors feeling the pinch include retail (-6.1%) and the automotive industry (-4.0%), which are both expected to cut ad budgets as margins tighten and manufacturing stalls. While technology and consumer packaged goods brands are still growing, their rates are muted compared with previous years. Warc conducted this study based on data from 100 markets, and says agility is the new imperative for advertisers navigating this volatile landscape.
Pure-play internet advertising, encompassing social media, retail media, online display and paid search, continues to grow. The sector accounted for 70.8% of all global ad spend in the first quarter of 2025, to reach $195.2bn. It is projected to hit $829.2bn (+9.8%) by the end of the year. It is expected to exceed $1-trillion, making up almost 80% of all advertising spend, by 2028.
A significant portion of this growth is concentrated in a few major players. Alphabet, Amazon and Meta are forecast to capture a combined market share of 54.7% outside China this year, totalling an aggregated $524.4bn. This share is expected to climb to 56.2% in 2026.
Search advertising is set to account for more than a fifth (21.5%) of the ad market this year, with spend rising +7.4% to $248.6bn. Google remains dominant within paid search and is forecast to take 85.8% of the market ($213.3bn). The integration of AI into the search journey is expected to disrupt ad revenue models, though Google's dominance, bolstered by small and medium-sized enterprises , is likely to persist in the near term.
Social media is poised to become the largest single advertising medium globally, accounting for a quarter (25.8%) of all ad spend this year, reaching $298.3bn (+12.0%). While a strong first quarter (+14.9%) was observed, growth is expected to slow as tariffs disproportionately affect Asian brands. Meta's ad business is forecast to grow +12.6% to $142.1bn this year, a cooling from its 2024 performance.
Retail media is projected to be the fastest-growing advertising medium this year, with an expected rise of +14.4% to $176.2bn, which represents a 15.2% share of the global ad market. Amazon's retail media ad business saw a +21.0% increase in Q1 to a third of the global retail media market. Warc forecasts Amazon's ad income to grow by +16.1% to $60.6bn this year, though it remains exposed to tariffs on its Chinese sellers.
Social media is poised to become the largest single advertising medium globally, accounting for a quarter (25.8%) of all ad spend this year
Global video advertising spend is forecast to drop by -2.6% in 2025 to $183.9bn, primarily driven by a continued decline in linear TV (-6.3%). This will be the first year that retail media commands a greater share of global ad spend than linear TV. Video-on-demand advertising is still growing and is expected to rise by +13.2% to $39.9bn, with Netflix's ad-supported tier seeing significant growth.
The automotive industry, despite a projected -4.0% cut in ad spend this year, is expected to rebound in 2026 with a +7.5% rise. This year's reduction reflects a shift in budgets from premium video formats towards digital platforms, with social ads surpassing linear TV for the first time in 2025.
Retailers face a more significant hit, with ad spend expected to fall by -6.1% to $166.1bn. This is largely due to impending US trade tariffs on key goods and raw materials, increasing costs for retailers that are heavily reliant on Chinese imports such as Amazon and Walmart. As a result, major Chinese retailers targeting US consumers, for example Temu and Shein, have reallocated advertising spend to other markets, including Canada, Australia and Europe.
The tech and electronics sector is also experiencing a slowdown, with expected ad spend growth of +5.5% this year, a sharp deceleration from the +24.3% rise in 2024. Tariffs are forcing this sector to adjust go-to-market strategies, shifting investments to less-affected regions or different product lines.
Consumer packaged goods companies are facing major disruption to their supply chains due to tariffs. While core consumer packaged goods sectors like soft drinks, toiletries and household goods are still expected to see growth, it will be significantly slower than in 2024. Overall, the sector is forecast to increase ad spend by +6.7% to $200.5bn. .
The US ad market, the largest worldwide, is expected to grow by +5.2% to $451.6bn this year, half the growth rate recorded in 2024 and a 0.5 percentage point downgrade from March. Headwinds include tariff uncertainty, disrupted supply chains, lower consumer demand and stagflation. Despite a strong first-quarter performance, boosted by Chinese brands’ front-loading spend, growth is expected to slow significantly throughout the year.
Chinese brands are increasingly redirecting ad spend to Canada to circumvent US market barriers. However, Canadian ad growth is still expected to slow to +3.2% this year due to deteriorating economic conditions. Digital platforms are projected to capture 77.6% of Canada's total ad market, driven by granular targeting capabilities and the rise of retail media.
China's ad market continues to struggle with weak domestic demand and significant structural shifts as consumers become more price-conscious. Projected US tariffs are expected to dull China's economic growth, leading to a downward revision of its 2025 advertising growth expectations to +7.2%.
In Europe, economies are also struggling. The UK ad market is forecast to grow +6.5%, largely driven by online ads, particularly social and search. However, Germany (+2.9%), France (+2.7%) and Japan (+3.3%) are all facing modest ad spend growth amid stalling economies and a severe risk of stagflation.
The big take-out: Concerns globally about trade tariffs, as well as declining business and consumer confidence, are driving down advertising spend forecasts.
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