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Global ad market prospects downgraded by $20bn in the face of widespread disruption from trade tariffs

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1 year ago

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WARC

Growth forecasts for advertising spend have been downgraded this year (-0.9pp to +6.7%) and next (-0.7pp to +6.3%), equivalent to a $19.8bn cut.

The risk of prolonged stagflation – and outright recession – has grown in key economies, exacerbated by new trade tariffs set to bite from H2 2025. Automakers, retailers and tech brands are most exposed.

Regulation is another headwind, with the EU tightening its stance on both Google and Apple. Outstanding US antitrust rulings against Google and TikTok also add to a climate of uncertainty for media strategists.

The global ad market is expected to be worth $1.15trn this year, an absolute rise of $72.9bn (+6.7%) from a strong 2024. Alternative modelling based on a pessimistic OECD scenario further cuts ad market growth, to +6.4% this year.

WARC Global Ad Spend Outlook 2025/26 – Q1 2025 update

27 March 2025 – A new study from WARC, the experts in marketing effectiveness, has found that global advertising spend is now on course to grow 6.7% this year to $1.15trn, a downgrade of almost one percentage point (pp) from WARC’s November forecast due to growing market volatility. A further cut of 0.7pp has been applied to 2026, downrating growth to 6.3%.

The underlying factors for these downward revisions are wide ranging, but core among them is the rising risk of stagflation – or outright recession – across major economies, compounded by heightened costs being levied on trade by the US. Tightening regulation in the European Union, squeezed margins and low business and consumer confidence are also contributing factors.

James McDonald, Director of Data, Intelligence & Forecasting, WARC, and author of the report, says: “The global ad market faces mounting uncertainty as trade tariffs, economic stagnation, and tightening regulation disrupt key sectors – leading us to cut growth prospects by $20bn over the next two years. Automakers, retailers, and tech brands in particular are now reigning in ad spend amid rising manufacturing costs and mounting supply chain pressures.

“Despite the growing volatility, digital advertising remains strong, led by three companies – Alphabet, Amazon and Meta – on course to control over half of the market in 2029. Regulatory scrutiny and uncertainty around TikTok’s future in the US further compound risks to growth, however, advertisers must be nimble in order to seize initiative in this shifting landscape.”

Three scenarios for an uncertain future

WARC’s latest global projections are based on data aggregated from 100 markets worldwide, and leverage a proprietary neural network which projects advertising investment patterns based on over two million data points. These include macroeconomic data, media owner revenue, marketing expenses from the world’s largest advertisers, media consumption trends and media cost inflation. It is believed to be one of the most comprehensive advertising market models available to the industry today.

This capability has allowed WARC to model three scenarios for this report based on differing severities of deterioration in underlying market conditions. These are as follows:

WARC’s baseline forecast, drawing from current indicators
The Organization for Economic Cooperation and Development (OECD) scenario, which assumes 10% universal trade tariffs and cuts 0.5pp from GDP in key economies over three years, as well as adding 0.4 points to inflation
A more severe case, which removes a full point from global growth aside 0.4 points to inflation over the next three year

Applying the OECD scenario to the advertising market cuts a further 0.3pp and $4bn from global growth compared to WARC’s baseline of 6.3% growth and total of $1.15trn. The Trump administration still intends to introduce new reciprocal tariffs with all trading partners on April 2nd, aside a blanket 20% hike already imposed on China and similar punitive measures pending for Canada and Mexico. This plays into a more severe scenario which, when modelled, equates to a 0.8pp downgrade in advertising growth compared to our baseline, at an extra cost of $9.5bn.

WARC believes the impacts of trade fragmentation will begin to be felt in the advertising market from the second half of this year, before becoming more pronounced during the first half of 2026.

Automotive, retail and tech sectors set to bear brunt of tariff impacts

Automotive ad spend down 7.4% this year as manufacturing stalls and key players pare back on brand building
Retailers set to lower ad spend by 5.3% as margins tighten; US retailers are vulnerable to disruption among Chinese suppliers
Ad growth set to halve among tech & electronic brands as barriers to trade impair access to components

The automotive industry contributes significantly to the revenues of leading ad agencies, spending $54.8bn last year of which more than one in five (22.5%) dollars went to premium video formats – predominantly spots. Budgets are shifting away from linear TV and towards digital platforms, however, with more than half (51.1%) of automotive spend worldwide now going to search and social media.

Major US automakers, including General Motors and Ford, have reduced their advertising budgets in recent years despite revenue growth. GM reinvests 1.8% of its sales revenue into marketing activity, down from 3.5% in 2013, while for Ford the share is just 1.2%.

Data from the European Automobile Manufacturers Association (EAMA), published this month, shows impending tariffs on Mexican, Canadian and Chinese production pose a risk to two fifths (40.7%) of the automotive industry. WARC expects a decline in ad spend among automotive brands to be close to 7.4% this year, with video formats more likely to incur larger losses.

Retail is the largest sector WARC monitors, with projected ad spend of $162.7bn this year equivalent to 14.1% of the global ad market. This total represents a fall of 5.3% from 2024 levels of spend, however, mostly reflective of the looming impacts of tariffs on supply chains. Both the OECD scenario (-5.7%) and severe case (-6.1%) paint gloomier prospects for ad spend among retailers this year.

The retail sector recorded dramatic growth last year – up 13.6% or $18.9bn – buoyed by aggressive strategies from new entrants to western markets like Temu and Shien. Our working assumption is that these companies will significantly ease advertising activity this year as trade barriers disrupt direct routes to western consumers, stymying headline growth in the retail sector.

The tech and electronics sector spent $84.3bn on advertising last year, a bounceback of 25.0% following two years of decline (due to rising interest rates affecting tech startups) which was propelled by increased demand for microchips from AI and more fluid supply chains.

WARC forecasts a 6.2% ad spend growth in this sector to $89.5bn, a downgrade from the +13.9% forecast in November in large part reflective of new tariffs targeted at semiconductors. Both the OECD (+5.8%) and severe (+4.9%) scenarios point to a further cooling in growth.

Online platforms shrug off regulatory pressures

Search to account for more than a fifth (21.7%) of the ad market, with spend rising 8.0% to $250.0bn this year despite regulatory threats
Social media – the largest single advertising medium globally – is poised to account for a quarter of all ad spend this year
Retail media set to be joint-fastest growing advertising medium this year, though trade disruption threatens ad receipts from consumer packaged goods (CPG) brands

Last week, the European Union found Apple and Google to be in breach of its Digital Markets Act (DMA), potentially costing the pair billions of dollars in fines. The EU is also pushing back on personalisation via the Digital Fairness Act, while a recent UK court ruling could allow UK consumers to opt out of personalised advertising. These developments stand to significantly impact retail, social media and the future of paid search advertising.

These developments, coupled with the US antitrust ruling against Google late last year, show a significant souring among legislative bodies against major tech firms. Ongoing uncertainty on the practicalities and likely appeals from Google and Apple, means our growth projections for the sector remain positive.

WARC projects a rise of 8.0% for paid search this year, though this is down a point from our last forecast and 1.3pp ahead of the companion OECD scenario modelled for this release. Within this, Google is expected to record an 8.5% rise in paid search revenue, while Apple’s search business, estimated to be worth $5.1bn last year per Omdia Advertising Intelligence, should grow by a similar order.

Taken together, social media companies are expected to net $286.2bn in advertising revenue this year, up 12.1% from last year and equivalent to a quarter (24.8%) of global advertising spend. Within this, TikTok (+23.6%), Instagram (+17.0%) and Facebook (+8.6%) are expected to see healthy gains, as a long tail of advertisers leverage new generative AI tools to target consumers.

Major US retailers Walmart and Costco have reportedly requested their Chinese suppliers – who make up between one third and one half of their supply chains – cut prices to ease the pressures from new tariffs on their goods. Chinese producers also account for a ‘significant’ proportion of supply chains for global pure players like Amazon, while Chinese properties targeting western shoppers – including Temu and Shien – are particularly exposed.

Money continues to flow into the retail media market, and new commerce media entrants, from the air travel and banking sectors, are boosting the sector. WARC believes that retail media will be the joint-fastest growing medium this year, at +15.4%.

This rate is ahead of the wider pure play internet market (+10.1%) and more than double the total global growth rate, resulting in retail media’s share of global spend rising to 15.5% this year – equivalent to $178.7bn. Disruption to this ecosystem could broadly dampen ad spend within the consumer packaged goods (CPG) sector, though.

Economic outlook cut across key advertising markets

US ad market expected to post a solid rise this year (+5.7%), though growth is less than half that recorded in 2024 (+13.1%)
The Chinese ad market continues to struggle with weak domestic demand; growth is set to slow to 5.3% this year and just 3.5% in 2026.
The UK, German and Japanese economies are all stalling and present a severe risk of stagflation over the forecast period

We believe the US ad market will grow 5.7% this year to $451.9bn, though this is less than half the growth rate recorded in 2024 (+13.1%). Contrary to OECD expectations for the US economy, ad market growth should accelerate in 2026, with spend rising 6.5% (+4.4% in real terms) as activity increases around the FIFA World Cup (hosted across North America) and US midterms.

China too is expected to record a slowdown in both advertising and economic growth this year when compared to 2024. Its ad market has cooled on the back of weak domestic demand, and spend is set to rise by 5.3% to $205.5bn this year compared to growth of 7.1% recorded in 2024. This year’s growth rate equates to a 3.5% rise in real terms, which lags the OECD’s expectation of 4.8% real growth in the Chinese economy (a 0.1pp upgrade on its last forecast).

Our preliminary estimate for ad market growth in the UK last year stands at +10.2%, though this is due to be confirmed next month as part of the AA/WARC Expenditure Report. The UK’s ad market is highly digital, with online ads accounting for four in five (82.6%) ad dollars. We believe the UK’s ad market will grow by 7.1% to a value of $52.6bn this year, though this is tempered to a 5.0% rise after accounting for inflation.

The outlook is tougher for Japan, where advertising spend is expected to dip by 2.0% to $40.0bn this year (-3.9% in real terms). The market is set to grow 3.3% this year when measured in local currency, demonstrating the current strength of the greenback against the yen. The OECD has downgraded its growth expectations for the Japanese economy by 0.4pp both this year and next, with economic stagnation a likelihood in 2026.

Germany’s economy is also in the doldrums, with real growth of just 0.4% expected by the OECD this year following a cut of 0.3pp from its last outlook. This sluggish growth underpins our expectations of a 2.1% fall in German advertising spend to $27.1bn this year, equivalent to a 4.1% dip in real terms after accounting for inflation.

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Forget Energy Transition, Produce Oil Like Nothing Before

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1 hour ago

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June 9, 2026

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African Energy Chamber

The future requires more oil and gas production – not less

BUENOS AIRES, Argentina, June 9, 2026/APO Group/ –The world does not have an energy problem. It has an energy supply problem. As demand rises, populations grow, and billions of people continue to live without reliable access to electricity and clean cooking technologies, the case for producing more energy has never been stronger. From Africa to Latin America, governments and operators are responding with renewed investments in exploration, production and infrastructure, signaling a shift away from energy subtraction and toward energy addition.

Speaking during the ARPEL Conference 2026 in Buenos Aires, Argentina, NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC) – the voice of the African energy sector – delivered a direct message to policymakers, investors and industry leaders: “Forget transition. Let’s talk about addition. Let’s give people what they need.”

The numbers support the argument. Energy poverty remains one of the greatest barriers to economic development globally. In Africa alone, more than 600 million people remain without access to electricity, with nearly one billion people living without access to clean cooking technologies – the most disproportionately affected of which are women. Asking developing economies to produce less energy while these realities persist is fundamentally disconnected from the needs of billions of people.

“For far too long, we have been told to build less, produce less and pay more for energy,” Ayuk stated. “In Africa, we believe this is a moment for energy addition, not energy subtraction. Drill, baby, drill. It’s more important today than ever before.”

Africa offers the clearest justification for increasing oil and gas production. Despite holding more than 125 billion barrels of crude oil reserves and 620 trillion cubic feet of proven gas reserves, the continent relies heavily on imported petroleum products to sustain its economies. Inadequate investment flows across the energy value chain have impacted development and industrialization, leaving millions in the dark.

The global energy transition further compounds this challenge. Opposition by environmental groups, a shift toward aid rather than commercial business structures and diminishing investment for oil and gas projects have brought significant implications to the continent. While developed economies are pursuing a shift towards alternative energy sources, Africa needs its oil and gas – now more than ever before.

For far too long, we have been told to build less, produce less and pay more for energy

Efforts are being made across the continent to produce more oil and gas. Leading producers such as Nigeria and Angola strive to increase output, targeting brownfield development, accelerated exploration and enhanced recovery. Emerging producers such as Namibia are fast-approaching first oil, while discoveries made in Ivory Coast, investments made in the Republic of Congo, and new LNG builds in Mozambique and Tanzania are supporting greater production continent-wide.

“We must remain resolute. We must commit to an industry that builds more, produces more and never apologizes for oil. Many people in Africa are not ashamed of oil. We believe oil has a major role to play in our energy future,” Ayuk said.

Latin America offers a powerful demonstration of what sustained exploration and production can achieve. Brazil’s pre-salt developments remain among the most successful offshore projects in the world, delivering large volumes of low-cost production while attracting continued investment. Guyana continues to expand output at one of the fastest rates globally, while Argentina’s Vaca Muerta shale play is strengthening the country’s position as a major energy producer. Pan American Energy also recently announced plans to invest $680 million to revitalize Argentina’s Cerro Dragon field in the mature Golfo San Jorge basin, reflecting global interest in optimizing South American oil production.

The region’s success reflects a commitment to developing resources rather than restricting them. “Our friends in Latin America have been strong stewards for our industry,” Ayuk said, adding, “Be proud of your energy industry.”

That message extends far beyond Latin America. As governments reassess energy policy, supply security and economic growth priorities, oil and gas continue to provide the foundation upon which modern economies are built. The choice facing both emerging and producing nations is increasingly clear: either create the conditions necessary for investment, exploration and development, or risk falling behind in a world that continues to demand more energy.

“We do not have anywhere to transition to. Where are we going to transition to? From the dark to the dark?” Ayuk asked. “We want to ensure that we have energy that drives development.”

For billions of people still seeking access to affordable, reliable energy, the priority is not producing less. It is producing more.

“Don’t ever apologize for producing energy that drives human flourishing,” Ayuk concluded. “Keep building, keep producing and don’t be scared to say, ‘drill, baby, drill’ whenever you have the chance.”

Distributed by APO Group on behalf of African Energy Chamber.

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Heirs Energies’ US$750 Million Financing Named Best Oil & Gas Deal of the Year

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June 9, 2026

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Heirs Energies Limited

The award was presented on 3 June 2026, in London, and recognises one of the largest financings secured by an indigenous African energy company

LONDON, United Kingdom, June 9, 2026/APO Group/ –Heirs Energies Limited, Africa’s leading indigenous-owned integrated energy company, has been recognised on the global stage after its landmark US$750 million dual-tranche Senior Secured Reserve-Based Lending (RBL) facility was named Best Oil & Gas Deal of the Year at the EMEA Finance Project Finance Awards 2026.

 

The award was presented on 3 June 2026, in London, and recognises one of the largest financings secured by an indigenous African energy company. The transaction highlights the growing role of African capital in supporting strategic investments that advance energy security, economic development, and long-term value creation across the continent.

Executed with the African Export-Import Bank (Afreximbank), the US$750 million financing was structured to accelerate field development, optimise production, and support Heirs Energies’ long-term growth ambitions, while maintaining disciplined capital management.

Commenting on the recognition, Osa Igiehon, Chief Executive Officer of Heirs Energies, said: “This recognition reflects the confidence that African and international financial institutions continue to place in Heirs Energies, our strategy, and our long-term vision.

“The transaction demonstrates that indigenous African energy companies can successfully structure and execute world-class financing solutions that support investment, growth, and value creation. We are proud to receive this award and grateful to our financing partners, advisers, and stakeholders whose support made it possible.”

We are proud to receive this award and grateful to our financing partners, advisers, and stakeholders whose support made it possible

Mr. Haytham ElMaayergi, Executive Vice President, Global Trade Bank at Afreximbank, said: “We are truly honoured that the US$750 million dual-tranche Senior Secured Reserve-Based Lending facility for Heirs Energies has been recognised as Best Oil & Gas Deal of the Year by the EMEA Finance Project Finance Awards.

“This recognition underscores the importance of well-structured, Africa-focused financing in supporting indigenous energy companies with strong governance, high-quality assets and clear long-term growth plans. Afreximbank was proud to support this landmark transaction, which demonstrates how African financial institutions can help mobilise capital for strategic businesses that advance energy security, production capacity and sustainable value creation across the continent.

“We congratulate Heirs Energies and all the partners involved in the transaction and are pleased to see this important financing recognised on such a respected international platform.”

Samuel Nwanze, Executive Director and Chief Financial Officer of Heirs Energies, added: “This award validates the strength of the transaction and the confidence our financing partners placed in Heirs Energies.

“The facility was designed to support our long-term growth strategy, enabling continued investment in field development, production optimisation, and sustainable value creation. We are pleased to see the transaction recognised on such a respected global platform.”

The financing represented a major milestone in Heirs Energies’ evolution from acquisition-led financing to a capital structure aligned with the long-term development profile of its reserves. It further reinforced the Company’s position as a leading indigenous energy producer and demonstrated the ability of African institutions to finance transformational African businesses.

The EMEA Finance Project Finance Awards recognise outstanding transactions across Europe, the Middle East, and Africa, celebrating excellence, innovation, and impact in project and structured finance.

Distributed by APO Group on behalf of Afreximbank.

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What Human Resource (HR) Professionals Gain from Automation

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June 9, 2026

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HR

Four examples of automation supporting HR staff

JOHANNESBURG, South Africa, June 9, 2026/APO Group/ –Human resource people are concerned. As automation becomes more featured in modern digital technologies, many HR staff are asking the same question: will automation replace me?

 

Their fears are not unfounded. According to surveys conducted by Gartner (https://apo-opa.co/4uo4fGQ), some companies are using AI as an excuse to reduce HR headcounts, and 79% of Chief HR Officers told AMS (https://apo-opa.co/4xj8Qg9) that they see notable concerns about job security among their teams.

 

Supporting human abilities

 

However, a report published last year by the International Labour Organisation (https://apo-opa.co/3SaBQGM) found that AI and automation are unlikely to replace HR staff. Instead, automation is producing significant productivity improvements for HR staff, says Mignon Wolmarans, HR Product Manager at Deel Local Payroll.

 

“HR jobs require people with complex problem-solving, creativity, and strong interpersonal skills. These are not abilities that a machine or software can replace. But HR people spend most of their time on manual tasks that actually reduce their ability to focus on priorities where their skills are needed the most.”

 

This observation comes from working with clients who adopt automation in their HR environments, she adds.

 

“We sometimes encounter reluctance when we bring up automation, and the resistance is usually around a comfort with manual processes or gaps in training and skills that reduce people’s confidence in technology. But when we work with them to overcome those concerns, they love what automation does and how it gives them more autonomy and focus.”

 

How automation supports HR

 

Modern HR platforms, cloud software, can automate many routine HR tasks, either as processes designed by HR teams or as ready-to-use native features. These latter features match frequent HR tasks that would otherwise require significant manual processing, input from multiple people, or both.

People are most reluctant to adopt automation because of skills gaps, which feeds into fears that the technology will replace them

 

Some examples include:

 

  • Leave management: Automate accruals based on length of service, salary grade, or a combination of the two. Automation applies forfeiture rules automatically, and if an employee’s tenure ends, leave encashment is calculated and processed in a single automated action.

 

  • Claims: Self-service custom forms and document attachments streamline overtime and travel claims. These are processed through established rules and approvals, pushed to the responsible managers or heads of departments. As soon as a claim is approved, it automatically updates payslip information.

 

  • E-onboarding: Instead of HR practitioners capturing new employee information manually, ‌newcomers use online forms to complete their basic profile and address information, and attach key documents, all of which are loaded onto their profile and only require approval from HR.

 

  • Performance management: Set up different performance review layouts, forms, and templates for various roles, objectives, and indicators. Participants can attach supporting documents, while reviewers, managers, and other staff can submit their contributions. All the performance data feeds into central dashboards for complete control and visibility of the company’s performance.

 

These automations reduce manual workloads and errors while extending features to other stakeholders in different departments. Crucially, they don’t replace HR staff and instead give them the capacity to focus on intricate and human-centric activities that require more than capturing data and compiling reports. As mentioned, HR teams can also create automated processes and customised forms.

 

Creating digital confidence

 

The best HR software vendors offer training and skills honing for customers. For example, Deel Local Payroll provides training staff and extensive learning resources for its customers, helping them take charge of automation.

 

“People are most reluctant to adopt automation because of skills gaps, which feeds into fears that the technology will replace them. That’s why we have a dedicated training department, one-to-one training, and e-learning courses that help fill those gaps,” says Wolmarans.

 

The fear that automation will replace HR people is overstated, even if some company leaders consider it an option. Software cannot compare to what skilled HR professionals do best. But those same professionals focus overwhelmingly on manual tasks, taking time better spent on more complex and strategic priorities.

 

Automation doesn’t replace HR professionals. When the right platform and vendor support them, it makes them better at their jobs.

Distributed by APO Group on behalf of Deel Local Payroll, powered by PaySpace.

 

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