Ad spend to grow more than expected in 2025 as tariffs sting less

Global ad revenue excluding U.S. political advertising will grow 8.8% in 2025 to $1.14 trillion, WPP Media said, raising its forecast from the 6% it predicted in June. Next year will see worldwide advertising grow 7.1%, it said, revising its June forecast of 6.1%.

Marketers softened the impact from tariffs by moving up imports to beat their implementation, carefully managing their inventories and absorbing some of their costs.

“In June, we were reacting to more recent tariff announcements," said Kate Scott-Dawkins, president of business intelligence at WPP Media and lead author of the report. “The summer gave us a chance to see how those played out, to see how resilient consumer spending was off the back of those announcements in markets around the world, to see what sort of negotiations and arrangements were made that lessened the impact of some of those tariffs."

Some of the sting from tariffs was only delayed, however, and will finally be felt in 2026, the report said.

The surge of AI investment also created more ad spending than originally expected, WPP Media said. Some businesses are using the technology to make processes, including marketing and product development, more efficient and directing the savings into new ad buys, Scott-Dawkins said. New companies are also forming in the AI sector itself and in turn becoming advertisers of their own.

The forecast also said that global retail media, in which businesses such as grocery and big-box chains offer advertisers ways to reach consumers using customer data, will surpass television advertising revenue in 2025 for the first time with an increase of 11.3% to $174.2 billion.

TV ad spending across both traditional and streaming viewing will rise 0.6%, WPP Media said.

Write to Megan Graham at megan.graham@wsj.com