Digital advertising across sectors is suffering from the uncertain, impact-filled effects of tariffs
Digital ad budgets are getting hit. Not across the board, but in key industries like automotive, the impact is hard and clear. The uncertainty around tariffs, especially those introduced in a stop-start fashion with global trading partners, has made it difficult for businesses to plan, let alone scale long-term campaigns. That chaos directly disrupts advertising models which rely on consistency and predictability.
In automotive, the effect is most visible. There was an early surge in ad spend right after the Trump administration’s tariff announcements. Companies scrambled, stockpiling inventory, trying to get ahead of expected cost hikes. But that momentum didn’t last. In the second half of the season, demand cooled rapidly. Oscar Orozco at eMarketer, who leads forecasting, noticed a sharp pivot in how auto companies are approaching advertising now, they’re doubling down on performance marketing. Basic goal: if you’re going to spend, you need to see measurable returns, now. Not in six months.
Performance marketing is efficient. It’s data-driven. You track what works. But it doesn’t build brand loyalty with the same lift as traditional campaigns. For the auto industry, that’s a trade-off. You protect short-term sales, but you risk hollowing out longer-term brand value. And that’s a warning for any executive in these sectors: if you’re only focused on last-click attribution, you’re missing the bigger game.
What businesses need now is control. Not just reacting to tariffs and cost pressures, but proactively adjusting strategy. Build for now, and for what’s next. The tools exist, but the mindset has to shift from linear planning to dynamic optimization.
Oscar Orozco nailed it in the report. We’re seeing abrupt directional changes in marketing, shaped not by consumer demand, but by geopolitical policy. That’s a signal. Leaders who adapt fast, who structure budgets around clarity, flexibility and verifiable ROI, will widen the gap between themselves and those playing catch-up.
Retail businesses are actively trimming large-scale campaigns
Retail ad strategy is shifting, aggressively. Executives are no longer spending on broad, untrackable campaigns. Tariffs have inflated costs across global supply chains, and consumers are reacting with hesitation. This impacts how retailers allocate their marketing dollars. They’re eliminating campaigns that don’t tie directly to short-term sales and are reinvesting in highly measurable, performance-driven channels.
This isn’t happening in isolation. Retail spans everything from home goods and electronics to bars and restaurants. The impact of tariffs isn’t consistent across these categories. Home goods, for example, are more directly disrupted, because they rely heavily on imported materials subject to tariffs. Hospitality and food service are less affected. But consumer behavior doesn’t stop at category boundaries, when wallets tighten, all retail spending feels the pressure.
Oscar Orozco, the forecasting director at eMarketer, laid this out clearly. Retailers are looking for certainty where they can find it. They’re pulling back on top-line branding and creatively pushing remaining spend into platforms and channels that show fast, verifiable returns. You can’t blame them, during high-stakes periods like the holiday season, sales lift matters more than impressions.
This is also accelerating growth in one segment of the retail ecosystem: retail media networks. These are the internal ad systems of large retailers, think Amazon, Walmart, Target. They’re built to directly influence purchases at the point of sale. According to eMarketer, ad spending on these networks is predicted to grow almost 19% in 2025, reaching around $60 billion. That’s not a marginal trend, that’s scale.
If you run part of a retail organization right now, you need to consider two actions: reduce exposure to non-measurable ad spending, and expand your control over in-house ad infrastructure. Relying on external platforms without actionable data puts your margins at risk. Performance marketing isn’t just a stopgap, it’s becoming core business infrastructure. Use it, improve it, and keep measuring. The stakes are high, and margin protection must be precise.
The consumer packaged goods (CPG) sector is poised for stronger-than-anticipated growth
CPG companies are stepping up their digital ad investments. That’s not what many expected, especially with global supply chain disruptions and increased material costs driven by tariffs. But the data shows a different picture. eMarketer now forecasts digital ad spending in CPG to reach $55 billion in 2024, a 7.9% increase, well above the previous 6.1% projection. This growth is being led by sustained strength in food and beverage categories, where consumer demand has stayed consistent even under inflationary pressure.
That doesn’t mean the entire CPG sector is moving forward at the same pace. Cosmetics and other discretionary segments are slowing spend. But categories that deal in essentials, like grocery staples and household items, are holding the line and pushing more marketing budget into digital, specifically mobile and social platforms.
Oscar Orozco of eMarketer pointed out that CPG businesses are making trade-offs. Tariffs on imported inputs such as aluminum and basic raw materials have pushed costs higher. At the same time, price sensitivity among consumers is growing. Brands are forced to decide where to spend and where to hold. When the demand is strong, especially in food and drink, companies are choosing to double down on digital advertising that can produce tight, measurable outcomes.
Executives focused on digital transformation need to understand this pivot. Thirty-five percent of CPG digital spend in 2025 is expected to go toward social networks. These platforms offer targeting precision, mobile-first access, and real-time performance data. In a cost-constrained environment, making full use of these tools is not optional, it’s essential.
What’s happening in CPG right now is a controlled shift. There’s pressure from input costs, pressure from inflation, and pressure from shifting consumer priorities. The companies that are gaining ground are the ones reallocating spend decisively, using data to direct investments exactly where response rates are highest. That’s how you scale profit under constraint.
The travel, tourism, and media sectors are experiencing diverse impacts
Travel and tourism are pulling back. Not because of lack of ambition, because of changes in spending behavior. As consumers feel the pressure of inflation and economic uncertainty, non-essential categories like vacation travel and leisure experiences are among the first to see demand slow. That impacts how those industries approach advertising. Broad awareness campaigns are no longer prioritized. Instead, firms are streamlining budgets, focusing on acquisition-driven strategies that only spend when results are immediately visible.
Compare that to media and entertainment, especially streaming. Here, digital ad investments are holding and even growing. Not because conditions are easy, but because competition is intense and consumer attention is still a valuable currency. Platforms like Netflix, Disney, and Warner Bros. Discovery are in a pressure environment, but they’re responding by maintaining aggressive ad targeting strategies to keep users onboard.
There’s a big milestone ahead. According to eMarketer, digital ad spending in media and entertainment will surpass $30 billion for the first time. That’s driven by sustained competition for subscribers and viewer retention. But inflation hasn’t been neutral here either. With consumers reconsidering how many streaming platforms they’ll pay for each month, companies are forced to be surgical, targeting the right viewer, with the right message, at the right moment.
Executives overseeing budget allocations in these sectors should be noting two things. First, marketing strategies must scale with immediate value delivery, especially in travel, where spend efficiency directly affects recovery speed. Second, in entertainment, maintaining reach will depend more on how sharply content is positioned through digital channels, not just how often it’s promoted.
These sectors aren’t experiencing collapse. They’re being recalibrated by broader economic signals. The real advantage will go to teams that adjust at the speed of consumer sentiment, driving spend where conversion is highest, holding when uncertainty outweighs return. That’s not just tactical. It’s structural.
Key takeaways for leaders
- Auto ad budgets shift as demand slows: Automotive brands are pulling back on broad campaigns and reallocating to performance-driven strategies due to weakening demand and rising cost pressures. Leaders should optimize for short-term returns without abandoning long-term brand equity.
- Retail cuts big campaigns to protect margins: Retailers are aggressively scaling back large, unmeasurable campaigns in response to consumer caution and rising costs. Executives should concentrate spend on channels that directly impact sales, such as retail media networks.
- CPG reallocates spend toward digital growth: Despite input cost inflation, strong demand in food and beverage is driving higher-than-expected digital ad growth. Leaders should double down on mobile and social media investments, with 35% of CPG’s digital spend headed to social in 2025.
- Travel contracts, media holds steady: Discretionary spending declines are reducing travel ad budgets, while competitive pressure is keeping media and entertainment spend stable. Decision-makers should align spend with evolving consumer behavior, prioritizing conversion-focused campaigns where volatility is high.
