Advertisers Reduce Expectations Amid Economic Volatility

UBS has projected a 5.5% increase in global digital advertising budgets for 2025, slightly down from 2024’s forecast. This dip reflects advertisers’ cautious stance as potential tariff impacts loom alongside uncertain economic indicators.

Platform-Specific Trends: Winners and Losers

Meta (Facebook) Outperforms

• Year-over-year growth of 1.7% in digital ad budgets for Facebook.

• Instagram remains a leading destination for social commerce despite slower growth trends.

• Advertisers may shift budgets from TikTok towards Meta’s platforms.

Challenges for Amazon and Google

• Amazon’s ad spending growth projected to ease to 2.8% due to challenges in e-commerce.

• Google likely faces sharper slowdowns across both Search and YouTube, with YouTube budget growth projected at just 4.1% for 2025.

Other Platforms in Focus

• Pinterest (PINS) and Snap are also expected to experience slight cuts in advertising budgets.

• The Trade Desk (TTD) is likely to maintain steady growth in CTV amidst a rising trend of streaming.

Shifting Strategies: TV vs. Connected TV

• Nearly 60% of advertisers plan to reduce linear TV spending over the next two years.

• However, spending on live sports programming continues to thrive amid live event enthusiasm.

• CTV platforms, led by Netflix, YouTube, and Amazon Prime, are attracting increased advertising budgets.

Reasons for Slowed Growth

1. Tariff Concerns: Potential tariffs on tech exports are leading to hesitancy among advertisers.

2. Economic Headwinds: Weakening consumer expenditure is pressuring marketing returns.

3. Saturation of Platforms: Increased ad costs and consumer fatigue are prompting advertisers to optimize their strategies.

Evaluating Performance Across Platforms

To understand how these trends are influencing company fundamentals, investors can utilize:

• Financial Growth API: This tool allows monitoring of revenue growth trends for major advertising platforms, such as Meta, Google, and Amazon.

• Ratios (TTM) API: It enables comparison of profitability and efficiency metrics across advertising-centric companies to assess which platforms can withstand budget slowdowns.

Key Takeaways for Advertisers

• Focus on diversifying ad strategies by balancing high-reach channels with niche platforms.

• Emphasize data-driven models for tracking return on investment as marketing budgets tighten.

• Stay alert to possible regulatory changes, such as tariff developments and privacy laws, which could impact advertising dynamics.