A new WARC analysis of the global advertising market for Q2 2025 brings further downgraded growth forecasts, driven by escalating trade tensions, increasing uncertainty among advertisers, and shifts in consumer behavior. Global ad spend is now projected to grow by 6.2% in 2025, which is 0.5 percentage points lower than the previous forecast from March.
The retail and automotive sectors are recording significant cuts – retail by 6.1%, and the auto industry by 4.0%, seen as a direct consequence of increased tariffs and pressure on supply chains. On the other hand, advertising investments in technology and consumer packaged goods (CPG) are growing more slowly than before.
James McDonald, Director of Data, Intelligence & Forecasting at WARC, stated that ‘advertisers have become cautious in approving budgets for the second quarter’, as global spending flows shift from the U.S. to Canada, Australia, and Europe, especially among Chinese brands such as Temu and Shein. This reallocation of advertising budgets comes amid rising U.S. tariffs on Chinese imports.
Dominance of Digital Giants and the Rise of Retail Media
Digital giants Alphabet, Amazon, and Meta continue to strengthen their dominance in the market: this year, the three companies will control 54.7% of global ad spend outside of China, equivalent to $524.4 billion, with projections rising to 56.2% by 2026.
Digital channels, including paid search, social media, retail media, and online advertising, now account for more than 70% of total ad spend, with annual growth forecast at 9.8%.
- Search advertising is growing by 7.4% and accounts for 21.5% of the market.
- Social media, the leading individual medium, makes up 25.8% of all budgets.
- Retail media stands out as the fastest-growing channel (+14.4%).
Amazon leads retail media with a 33% share of the global retail media market, while Meta is investing in AI-powered solutions for creative generation and performance optimization, targeting small advertisers. Google, with projected revenue of $213.3 billion, holds nearly 86% of the paid search market.
Television Loses Ground: Retail Media Overtakes Linear TV for the First Time
Global spending on video advertising has fallen by 2.6%, down to $183.9 billion. The biggest drop comes from linear television (-6.3%), which still accounts for over three-quarters of the video market. Meanwhile, video-on-demand (VOD) advertising is growing (+13.2%), and Netflix is expected to double its ad revenue, thanks to stable demand for its ad-supported subscription tier.
It is particularly significant that retail media will, for the first time, surpass linear TV in global ad spend share.
Trade Tensions Disrupt Key Sectors
According to WARC‘s analysis, trade tensions have shaken key sectors, and the advertising market is not immune to broader economic currents. The impact has led to the automotive industry reducing ad spend by 4% in 2025, though a 7.5% recovery is expected in 2026. Furthermore, retail, with a budget of $166.1 billion, is seeing a 6.1% drop, especially affecting U.S. giants like Amazon and Walmart. The technology sector anticipates 5.5% growth (down from 24.3% in 2024), due to limited access to components, while the CPG sector expects a 6.7% increase, despite facing logistical challenges and tariffs of up to 145% on Chinese imports.
Regional Trends: U.S, China and Europe in Focus
The U.S. advertising market, still the largest in the world, now has a revised growth forecast of 5.2%, significantly down from 13.5% in 2024. Chinese brands are redirecting budgets from the U.S. to Canada, Australia, and Europe, while China’s own forecasts have also been downgraded to 7.2% growth (down from 8.3% in March).
In Europe, the UK market remains digitally dominant with 84.6% of advertising spend going online, while Germany and France show modest growth of 2.9% and 2.7%, respectively. Japan is forecast to grow 3.3%, but continues to face significant macroeconomic challenges.
In a Time of Higher Costs, Agility is Key
Amid rising costs, regulatory risks, and shifting consumption patterns, advertisers are increasingly seeking flexible models and more efficient budget allocation. As WARC highlights, ‘agility is becoming the new currency in the world of advertising’.
WARC’s forecast is based on data from 100 global markets and uses a proprietary neural network model, trained on over two million data points, to map advertising investment trends with high accuracy.
