• by Laurie Sullivan  @lauriesullivan, April 25, 2025

Economic instability and the impact of tariffs in 2025 can be overcome if marketers take the correct path by watching performance and following key indicators -- platform by platform.

As part of the Interactive Advertising Bureau (IAB) webinar held Thursday to complement last week’s release of its 2024 revenue report, experts provided insight into removing costs through artificial intelligence, which will have the least amount of turbulence, and strategies to keep businesses growing.

Luke Stillman, executive vice president of market insights at research firm Magna, pointed to top verticals, as well as some benefits and challenges they might have this year.

Magna ranked the top verticals in terms of the amount they will spend on advertising. Retail ranked No. 1 at 27%, with technology at 12%; finance, 10%; travel, 6%; and auto, 5%.

“Auto is interesting,” he said. “There are 3.1 million cars sitting on dealer lots. That’s approaching the pre-COVID high of 3.8 million. Lots of cars means incentives for dealers to advertise and get cars out the door. Incentives are at record highs.”

Automotive was set up to have a good year, he said, but now there are geopolitical and supply chain uncertainties. Some auto brands are pulling back on budgets.

Each top-spending vertical is “emblematic of a different value proposition” that digital advertising offers, he said, adding that formats become a better value based on consumer data, more accurately ads can be targeted, and campaign spend can be connected to business outcomes.

Stillman originally expected a bit of uncertainty this year, but now the industry faces a layer of economic uncertainty, lack of visibility and weak consumer confidence. Stillman outlined how that pressures budgets in some verticals such as automotive, consumer product goods, and restaurants.

“We still expect digital growth to be strong, but maybe it shifts a little bit toward more flexible spending -- more outcome-driven spending in areas like search, commerce, and social,” Stillman said. “These are easy to tie to measurability, accountability and business outcomes.”

CJ Bangah, a partner at PwC, provided an example of the impact of tariffs on telecommunications. She said it could go from about $13 billion to $139 billion, increasing the amount required to pay by 10 times.

“If you say for one industry, I’m going to increase your tariffs by 10x, companies don’t really have a lot of choices on how they deal with it,” Bangah said. “They can pass it on to their customers, potentially constraining topline growth, take a margin hit, eventually decrease investments capabilities that could affect margins, or completely change sourcing strategies to dilute the risk.”

Bangah expects to see differences by industry sector and platforms when looking at the forecast on how tariffs will affect the advertising industry. It will depend on the resilience of the company’s balance sheet.

When the subject turned to artificial intelligence, Bangah said clients are moving “from fear to freedom,” meaning the power of AI has begun to focus less on the parts of the job that are a little straight forward and focus on the parts of the job that gains the most value.  

The future of advertising resides in cross-platform strategies around commerce, content, and customer value. Marketers that stay flexible and take advantage of this strategy -- rather than keep channel plans static -- will lead, according to the IAB.