2025 Global Ad Spend Surges 8.8%: Tariff Relief and AI Drive Upgrade, Commerce Media Surpasses TV

The event centers on WPP Media’s December 7, 2025, “This Year Next Year” report, which upgraded 2025 global ad spend growth from 6% (June 2025) to 8.8% (excluding U.S. political ads), totaling $1.14 trillion [1][2]. Two primary drivers underpin this revision: (1) tariffs had a less severe impact than projected, as marketers mitigated risks through front-loaded imports and inventory management, restoring confidence [1]; (2) AI provided a stronger-than-expected boost, enhancing ad creation, targeting, and measurement efficiency [1].

Industry context: The ad sector entered 2025 amid tariff uncertainties and gradual AI integration. Traditional TV ad share had been declining since 2020, while digital formats (social media, search, commerce media) expanded rapidly. The June 2025 forecast warned of tariff headwinds, but marketer proactive strategies reduced these risks [2].

The structural shift to commerce media (up 11.6% to $178.2 billion) overtaking TV (projected at $171.1 billion) is a defining trend, signaling a permanent reallocation of budgets toward performance-driven, retail-integrated channels [3]. In the competitive landscape:

• Digital platforms (Meta, TikTok) benefit from 12.8% social media ad growth to $413 billion, driven by AI targeting [2]; Google retains search ad dominance (10.2% growth to $244.9 billion) despite emerging AI search threats [3].
• Traditional TV’s share declines from 15.8% (2024) to 14.6% (2025), though streaming TV share rises from 26.2% to 29.5% [2].
• Commerce media networks (Amazon, Walmart, Shopify) gain, but WPP warns of consolidation risks due to AI checkout innovation [4].
• Media agencies (WPP, Omnicom, Publicis) benefit as clients increase budgets for AI-enhanced media buying [1].

1. AI’s Evolution to Core Driver
   : AI transitioned from experimental to a foundational tool in ad operations, unlocking incremental spending through improved efficiency—this shift is expected to accelerate long-term [3].
2. Commerce Media’s Permanent Shift
   : Its overtaking of TV reflects broader trends of ad budgets aligning with transactional ecosystems, enhanced by WPP’s expanded definition to include finance and travel media [4].
3. Marketer Resilience
   : Proactive tariff mitigation strategies (supply chain restructuring, cost absorption) reduced downside risks, highlighting adaptability in uncertain environments [2].
4. Spending Consolidation
   : Advertisers are reducing media partners to focus on AI-enabled networks with advanced measurement capabilities, reshaping ecosystem dynamics [4].

• Opportunities
  :
  • Marketers: Reallocate budgets to AI-driven digital/commerce media for higher ROI [3].
  • Media Platforms: Invest in AI ad tools to capture growing budgets [1].
  • Ad Tech Firms: Develop AI solutions for personalization, supply chain efficiency, and cross-channel measurement [3].
  • Traditional TV: Leverage streaming ad growth to offset linear declines [2].
• Risks
  :
  • Marketers: Overreliance on few AI-enabled partners increases operational risks [3].
  • Social Media Platforms: 2026 growth may slow (7.8%) due to age bans and AI chatbot competition [2].
  • Commerce Media: Consolidation risks could limit competitive options [4].
  • Regulatory: AI transparency and age ban regulations may impact ad operations [2].

The upgraded 2025 ad spend forecast ($1.14 trillion, 8.8% growth) reflects reduced tariff risks and AI-driven efficiency gains. A structural milestone occurs as commerce media surpasses TV ad revenue. Digital platforms and commerce media networks lead growth, while traditional TV faces declining share. Stakeholders across the ecosystem must adapt to AI integration, budget reallocation trends, and potential regulatory changes.