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Brands Seek Flexibility Amid Tariff Uncertainty

As the U.S. prepares for the announcement of new tariffs on imported goods, brands and advertisers are increasingly advocating for more flexible agreements. This push stems from concerns about the potential impact of these tariffs on their operations and marketing strategies.

Recent discussions between media companies and advertisers reveal a trend toward arrangements that allow for quick adjustments in budgets and marketing focus based on how tariffs develop. Sources involved in these conversations share that flexibility is a key concern among chief marketing officers and media executives alike.

On Wednesday, President Donald Trump is expected to unveil specific details regarding the new tariffs, which have been accompanied by a mix of vague messages from the White House. This ambiguity has heightened the urgency for brands to seek adaptable advertising strategies. “In this period of uncertainty, we’re seeing a significant shift toward more flexible, performance-based advertising models that allow brands to adjust spending quickly if conditions change,” noted Jonathan Gudai, CEO of Adomni, an AI-driven programmatic advertising platform.

The economic climate has historically prompted companies to reduce spending in areas such as advertising and marketing. The implications of tariffs extend beyond the direct costs of goods, affecting broader marketing budgets and strategies even for businesses that do not manufacture physical products.

According to Kate Scott-Dawkins, global president of business intelligence at GroupM, the current landscape is pushing advertisers to reassess their budgets. “We were optimistic about ad spending growth for the U.S. in our December forecast, but we will likely revise those expectations downward in June due to a combination of factors,” she stated. Influences such as rising inflation, job cuts, and the impending tariffs contribute to this reevaluation of spending.

GroupM previously projected a growth of 7% in U.S. ad spending by 2025, following an estimated $379 billion in ad revenue for 2024, not accounting for political advertising, as outlined in a recent report.

The current uncertainty arrives on the heels of a challenging period for media companies, which saw tightened ad budgets during the pandemic. While streaming services and live sports broadcasters have started to stabilize, traditional TV networks are grappling with dwindling ad revenue as viewers increasingly turn away from standard cable packages.

Certain sectors, particularly the automotive industry, continue to face challenges, as there is uncertainty surrounding how tariffs will influence spending decisions. Regular discussions have taken place between media executives and marketing leaders in the automotive sector, especially given the anticipated 25% tariffs on imported vehicles and some auto parts.

The timing of these tariff announcements is notable, coinciding with the Upfront presentations where media companies traditionally pitch their offerings to advertisers. Jonathan Miller, CEO of Integrated Media, commented on the cautious atmosphere leading up to these presentations, noting, “There’s a significant demand for flexibility, and while we’re not in a recession, there’s a marked hesitance that could impact overall growth.”

Gudai emphasized that traditional television may be particularly susceptible to cuts in advertising budgets as brands re-evaluate their strategies in a potentially higher-cost environment. “Tariffs could lead to dual consequences—raising costs while also intensifying competition for consumer attention through targeted advertising.”

While the demand for flexibility is growing, media executives have reminded brands of the importance of maintaining advertising initiatives during challenging economic times, as doing so can foster long-term brand recognition. For some businesses lacking a physical presence, continuing to invest in advertising is crucial, particularly in traditional media channels like television, which remain highly effective.

Andre Banks, founder and CEO of NewWorld, emphasized the need for brands to connect with consumers meaningfully. “In economically uncertain times, purpose-driven marketing is no longer merely a trend but a necessity for trust and lasting customer relationships,” he stated. Advertisers who grasp this focus on authenticity and consumer connection are likely to emerge from the downturn more resilient.

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