Economic volatility in the US is causing fluctuations in an ad market tied to government policies which themselves appear to be changing on an ad hoc basis. In March, advisory and consultancy firm Madison and Wall lowered its full-year forecast to 3.6 percent growth (excluding political advertising) in anticipation of Donald Trump’s tariff upheaval. Now with early evidence of the impact of the tariffs, and a clearer view of how the US ad market performed during the first quarter of 2025, Brian Wieser’s firm has upwardly revised its outlook to 6 percent for both the second quarter and the full year.
But the consultancy warned that “significant downside risks” could still occur if the Trump administration’s policies are fully implemented, with a stagflationary environment still expected in the mid- to long-term.
Superficial health
The reasons for the positive revision stem from a solid first quarter for the US ad market, which saw robust growth of 9.7 percent. M&W says this performance was “much stronger than expected”, and not so much a sign of an economy in rude health as one shaped by tariff-imposed anomolies. Imports of goods (particularly from Switzerland, Ireland, Vietnam and Taiwan) spiked ahead of the feared imposition of tariffs which in turn inflated GDP, according to the report, with a suspected jump in pharmaceutical and semiconductor imports.
M&W also suggests advertisers could have frontloaded their spending ahead of the closure of the “de minimis” loophole, which allowed Chinese retailers Temu and Shein to ship cheap goods to the US without import fees. “Temu is one marketer who could very well have increased its spending by a billion dollars during the first quarter, or around a percentage point, for an example,” says the report.
These anomolies suggest the US economy was “superficially in good shape” during Q1, and M&W forecasts the longer-term effects of tariffs to make the economy less efficient, with supply chain disruption driving up costs and capital investment being restrained or diverted elsewhere. At the same time, Trump’s ongoing calls on the Federal Reserve to lower interest rates could also have damaging consequences. “All of this causes us to maintain a broader outlook that is somewhat pessimistic,” says M&W.
Pressure on retail media
In terms of individual media channels, digital advertising was up 14.9 percent in Q1, and is projected to grow by 9.9 percent during Q2 and 10.3 percent for the full year. But the aforementioned impact of higher tariffs are expected to cause a “significant deceleration” in retail media growth over the course of the year. M&W noted however that commerce platforms drive their sellers to compete for customers, which can in turn drive advertising growth.
TV meanwhile was broadly flat during Q1, with growth for national TV (including CTV) offsetting a 5.4 percent decline in the local TV market. But national TV is forecast to fall by 2.7 percent for the full year, due to unfavourable comparisons with last year’s Olympics, alongside ongoing losses of revenue share as more streaming companies split the TV advertising pot. CTV’s share of TV revenue rose from 27 percent in Q4 2024 to 29 percent in Q1 2025, and is on track for 10 percent growth for the full year. In total, TV (national, local and CTV combined) can expect a “low single digit level of ongoing declines.”
And publishing (including legacy print magazines, newspapers and digital publishers) fell by 3.4 percent in Q1, and is set for further declines of mid-single digit levels as news media remains off marketing plans. “Marketers continue to claim their support for original journalism, but the money they deploy towards the industry for advertising strongly suggests otherwise,” says M&W.
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