Madison and Wall expects U.S. ad spend, excluding political advertising, to grow 6% in 2025 compared to 2024.

This is up from an earlier estimate published in March, when the strategic advisory and consulting firm forecast 3.6% annual growth.

Brian Wieser, CEO of Madison and Wall, noted in a report the adjustment was due to an American economy that appeared healthy when looking at metrics such as inflation and consumer spending.

“The United States was superficially in good shape during the first quarter,” Wieser wrote.

At the same time, Wieser warned factors such as tariffs and uncertain economic policies could hinder future growth.

In Madison and Wall’s report, Wieser described his overall outlook as “somewhat pessimistic,” due to “significant downside risks that could occur in the event that the administration’s policies are fully implemented, and foreign suppliers of capital shift their investments elsewhere.” 

The 6% figure is also modest compared to past years. The last time it was lower was in 2020, when annual U.S. ad spend decreased 2.1%.

In recent months, executives from Apple’s Tim Cook to Colgate-Palmolive’s Noel Wallace have stated the trade war will add costs to their companies, creating a more difficult road ahead for both shoppers and businesses.

“Uncertainty creates a pensive and anxious consumer, and when you have uncertainty in terms of macroeconomics, and everything surrounding that, consumers tend to hunker down,” Wallace, CEO of Colgate-Palmolive, told analysts during an April earnings call.

Recent figures from research firm Gartner show marketing budgets as a share of company revenue are expected to hold steady in 2025 at a rate of 7.7%. This figure is down from an average of 11.3% during 2015 through 2019.

Ewan McIntyre, a vp analyst and chief of research for Gartner’s marketing practice, added top marketers are also facing possible budget cuts in 2025 given current economic uncertainties.