Ad growth proves resilient despite tariffs and AI disruption, WPP Media says
WPP Media has raised its 2025 global ad revenue outlook to 8.8% growth, or $1.14 trillion, up from a prior 6% estimate. The agency expects momentum to continue in 2026 with 7.1% growth, even with consumer caution and ongoing tariff pressure.
The takeaway for marketers: budgets are flowing to channels that are measurable, closer to conversion, and increasingly AI-infused. Content remains the core driver, but categories are fracturing and reforming around new behaviors and data pipes.
Key shifts WPP Media is tracking
- Ad-supported streaming and the creator economy continue to pull spend from legacy channels.
- Retail media and broader commerce media are scaling and formalizing into distinct network plays.
- AI-powered search is expanding into "intelligence," WPP Media's new category that reflects how AI is reshaping discovery and decision moments.
AI: catalyst and constraint
AI is accelerating content production, media planning, measurement, and how consumers interact with brands. It's also forcing a rewrite of categories and KPIs. WPP Media even replaced its "search" classification with "intelligence," signaling that budgets are moving to intent-driven, AI-influenced experiences - not just SERPs.
Expect AI to boost efficiency and, at the same time, cannibalize some revenue in channels where automation compresses margins or reduces ad load. That tension will define the next 18 months.
Content still leads - gaming pops
Content-driven advertising (social, streaming, news, magazines, and more) holds the largest share of 2025 spend at 58%, or $663.5 billion. Within it, gaming is the fastest-growing sub-channel, projected to rise 29.5% to $8.5 billion this year. It's still a small slice of the pie at 0.7%, but the growth rate signals new inventory and formats worth testing.
Commerce media overtakes TV in 2025
Commerce media is projected to reach $178.2 billion in 2025, surpassing traditional TV for the first time. China leads at $76.3 billion, followed by the U.S. at roughly $58 billion.
Pressure is building for consolidation as networks proliferate, and some retail media revenue could be cannibalized by AI as recommendation engines and automation reshape ad delivery. The retail media model is spreading, with financial services media networks and travel media networks added as new categories in WPP Media's analysis. For background on how retail media networks operate, see the IAB's guidance here.
Tariffs hurt sentiment, but not budgets
Despite a softer consumer mood around the holidays, ad spend is holding up. Brands are reallocating to retail media, gaming, and other performance-leaning channels to reach cost-conscious shoppers who are pulling back from traditional media.
2026 outlook: big events, slightly slower growth
Ad revenue growth is expected to ease by nearly two points in 2026 even with the Winter Olympics and FIFA World Cup. The forecast excludes U.S. political ad spend from a heated midterm cycle.
What to do now
- Rebalance budgets toward commerce media and ad-supported streaming where measurement is strong and signals are closer to the sale.
- Pilot AI-driven "intelligence" placements across search alternatives, assistants, and retail discovery surfaces. Track assisted conversions, not just last-click.
- Tighten creative ops with AI for versioning, dynamic content, and speed - but keep human oversight on brand voice and legal.
- Build first-party data pipelines with clean rooms and consent frameworks to feed retail and vertical media networks.
- Stress-test retail media ROAS beyond on-site ads: off-site, in-store, and incrementality studies should be standard.
- Test gaming inventory with clear brand-fit guidelines and attention metrics; start with sponsorships or rewarded formats.
- Plan for consolidation by minimizing single-network dependency and enforcing data portability in contracts.
- Pre-book 2026 tentpoles early and build modular creative that localizes quickly for World Cup and Olympics activations.
- Update measurement for AI-influenced journeys: model multi-touch paths where answers and recommendations replace clicks.
- Watch tariff-sensitive categories and shift flighting to value-driven offers where sentiment dips.
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