Rashmeet Kaur Despite persistent economic headwinds, U.S. advertising spending continues to climb—at least for now. Madison and Wall’s latest forecast shows a 6% year-on-year growth in ad spend for Q2 2025, a sharp upward revision from the 3.6% projected in March. Digital advertising is the main driver, expected to surge 10.3% for the full year.
“Coming into the first quarter, expectations were muted,” said Brian Wieser, principal at Madison and Wall. “Instead, we saw surprising strength.” Commerce, retail, and social platforms are fueling this momentum, while more rigid formats—like local TV and the open web—are stagnating or declining.
Digital’s appeal lies in its agility. In an uncertain economy, marketers value channels that can be scaled up or down in real time. Connected TV, for instance, has quietly edged its share of total TV ad spend from 27% to 29% year-over-year, reflecting the shift to adaptable formats.
But beneath the strong headline numbers lies a more precarious picture. U.S. GDP grew 4.7% in nominal terms, but much of that was driven by companies stockpiling goods ahead of potential tariffs—not organic consumer demand. That kind of artificial stimulus doesn’t support sustainable ad growth.
Wieser warns the ad market could be running on borrowed time. “The world hasn’t ended,” he said, “but serious risks are piling up.” Stagflation—not collapse—is the more likely threat: sluggish growth, persistent inflation, and cautious consumers.
Marketers, well aware of these risks, are keeping budgets fluid. As Andy Taylor of Tinuiti put it, “The second half of the year hinges on how U.S. consumer demand holds up as tariff impacts become real.”
In the absence of policy clarity or meaningful productivity gains, long-term stability remains elusive. For now, ad dollars are still flowing—but the ground beneath them may not hold.
