Economic uncertainty is accelerating the shift toward performance-driven marketing
We’re seeing what happens when uncertainty meets the need for accountability, marketing shifts. Right now, macroeconomic pressures are real. Tariffs aren’t hypothetical anymore; they’re policy. As that reality sets in, marketing budgets react fast. Companies aren’t looking to “spend” anymore; they’re looking to “perform.” That means media spend needs to justify itself, not just in broad visibility, but in concrete returns.
The Interactive Advertising Bureau (IAB) recently captured this shift with clarity. They surveyed over 200 media buyers, and over 90% said tariffs are directly shaping their budget decisions. Most are dialing back in areas that build long-term brand recognition and pushing hard into digital platforms that give immediate, measurable outcomes. These shifts are rational. In difficult economic environments, nobody wants to bet on vague outcomes.
The way forward, then, is precise: spend where the output is traceable. We’re talking digital channels like social media and retail media. These are areas where engagement, conversions, and purchases can be linked back to the dollar. IAB’s forecast reflects that. Social media is set to grow 14.3% in 2025, retail media by 13.2%, and connected TV by 11.4%. Budgets are moving to where the metrics are sharp. That’s smart, especially when consumer buying power is under pressure.
This kind of performance-first strategy isn’t new, but the urgency is higher. Chris Bruderle, Vice President of Industry Insights and Content Strategy at IAB, put it simply: “If consumers are pulling back, that means every single dollar of ad spend has to earn a return.” He’s right. Economic caution changes the way leaders think about velocity and value. There’s no room for vanity metrics or vague sentiment alignment. Right now, marketing is precision-focused.
For CEOs and other top execs, this shift isn’t just about moving budget. It’s a call to reassess how you measure success in campaigns. Fine-tune your teams and technologies to optimize for performance, but always with both eyes open. Conditions will normalize again, branding will reclaim its value. But for the near term, performance marketing isn’t optional; it’s smart business.
Despite momentum in digital performance channels, inherent challenges in measurement and fragmentation remain prominent
Digital is growing fast, but it’s not perfect. There’s a reason why smart executives aren’t getting overly confident about digital performance. It promises measurability, but the results are only as strong as the system measuring them. Platforms like connected TV and commerce media are gaining attention because they offer immediate reach and data feedback. Still, they’re running into real operational limits: fragmentation across platforms and inconsistent measurement standards.
The IAB, monitoring this closely, already revised its outlook for connected TV downward by 2.4 percentage points. Same goes for commerce media, they also made a 2.4-point cut. That’s not just a small adjustment. It reflects growing frustration from marketers who can’t always verify or compare performance data across multiple tools and networks. In fragmented ecosystems, attribution becomes complicated. You may know something worked, but can’t prove how much or why. That weakens confidence and leads to hesitation, even in otherwise promising channels.
For leadership teams, this is where strategic focus is needed. Growth is still happening: social media is projected at 14.3% growth, retail media at 13.2%, and even with the downward revision, connected TV sits at 11.4%. But sustaining that momentum requires investment in both tech infrastructure and internal measurement capabilities. Companies that build strong analytics foundations, cross-channel dashboards, clean attribution models, high-quality integration, will outperform those just relying on platform defaults.
It’s important to stay aware of the limits in existing performance tools. Relying solely on platform-level reporting invites blind spots. The C-suite should ensure teams aren’t just gathering numbers, they should be making decisions based on data they trust. As commerce media and connected TV mature, the pressure is on vendors to simplify and unify metrics. But companies can’t wait. Build internal capability now to validate performance independently and adjust fast when the data doesn’t add up.
This isn’t about skepticism, it’s about sanity. The opportunity in performance media is big, growth numbers show that, but the ability to navigate complexity will define who wins. A strong product or campaign backed by poor measurement is a missed opportunity. Executives who invest now in transparency and control will be better equipped to translate marketing dollars into real business outcomes.
Exclusive reliance on performance-based strategies could jeopardize long-term brand health despite providing short-term gains
Performance marketing delivers fast, measurable outcomes. That’s what makes it attractive, especially when the economy is tight and budgets are under pressure. The returns are visible. Conversions, clicks, revenue, easy to track. That clarity helps justify short-term decisions. But it doesn’t tell the full story. Brand growth, loyalty, and emotional connection don’t show up in dashboards the same way, and they take time to build.
For years, marketers have relied on a balance between brand investment and performance output. That balance is now slipping heavily in favor of performance. It’s understandable. A volatile economy demands clear returns. But brands that go all-in on tactical wins risk hollowing out the strategic value they’ve built over time. When you stop building awareness, loyalty starts to erode. When you’re missing from top-of-funnel conversations, competitors fill that space. The cost of regaining lost ground escalates later.
The IAB alludes to this tension in its ongoing analysis. Their data shows a rush toward channels that offer short-term results, social, retail media, connected TV. Growth forecasts confirm the trend. But they also note that historically, these shifts toward performance-heavy strategies have been reactions to temporary economic pressures. And when companies overcorrect, they often return later to reinvest in brand campaigns. Because long-term ROI requires more than conversion metrics, it requires emotional relevance, trust, and recall.
C-suite leaders should take this seriously. Right now, the market is rewarding efficiency. That’s sensible. But building a brand is a long game. Customers need to remember you exist when they’re not ready to transact. They need familiarity before click-through. Cut that out of your strategy, and you’re narrowing the customer journey to only moments of intent, ignoring everything that brings people to that point.
The path forward is about precision and timing. You don’t have to abandon performance marketing, it’s necessary in this landscape. But you can’t let it dominate every decision either. Separate short-term pressure from long-term value. Build systems that allow your teams to shift dynamically without disconnecting from foundational brand investments. The companies that do both well aren’t just reducing downside, they’re expanding their future upside.
Key executive takeaways
- Economic pressure is realigning ad spend: Leaders should prioritize performance-driven channels like social media and retail media as economic uncertainty and tariff-related budget constraints drive a shift away from brand-focused investments.
- Digital growth is hitting operational friction: Executives must strengthen internal measurement capabilities and push for unified metrics across platforms, as fragmentation and inconsistent attribution are eroding confidence in key growth areas like connected TV and commerce media.
- Over-indexing on short-term ROI risks brand equity: Balanced marketing strategies are essential, leaders should maintain brand investment to protect long-term growth while optimizing performance spend for near-term results.
