Fears of ad spend cuts grow as Sorrell and marketing leaders warn of Trump tariff turmoil

Sorrell’s statement came as his marketing services group posted a loss of £306.9m for the 12 months to the end of December, growing from a £14.3m loss the year prior.

And while few of his peers are breaking ranks yet by speaking on the topic publicly, concerns about the impact of cross-border goods tariffs are dominating discourse at industry gatherings.

Take the World Federation of Advertisers’ Global Marketer Week, which has just wrapped up in Brussels. Summing up the mood among CMOs at the event, WFA chief exec Stephane Loerke told The Drum: “First of all, it’s uncertainty. All the conversations around tariffs are fuelling that uncertainty.

“There are a number of companies in a number of categories who are potentially going to be severely impacted by those tariffs. And then there are those companies who are being impacted by the hypothetical possibility of tariffs and that has implications in terms of how confident brands are as they look into the next 12 months.”

Loerke says the upshot of this uncertainty is that companies are likely to “be more prudent” when it comes to their marketing budgets. “Some of those shocks are so violent that they may end up cutting costs,” he added.

The somber prediction was echoed by Ruben Schreurs, chief executive of the media investment consultancy Ebiquity, during a recording of an upcoming episode of The Drum podcast at the same event. The influential advertising advisor expressed fears that we are heading “towards a serious recession.”

Schreurs had just flown back to Europe after two weeks in the US, during which he was frustrated that the tariff position had changed “six times,” causing chaos for clients in sectors such as the automotive industry.

He said: “As a result of that seemingly knee-jerk approach … by the presidency, I think the consensus is that it’s likely that we’re headed towards a serious recession because, rightfully, other countries, and groups of allies, are standing up and not going along with this game of ‘we’re on, we’re off.’”

The result for marketing, according to Schreurs, is that “many advertisers are preparing to pull back significant amounts of ad spend in the US.”

There will also be greater market fragmentation, he suggested, making it tougher for a chief marketing officer to plan on an international scale.

“I’m afraid that we will see more isolationism, where we will have a US market and then a Euro plus Canada, Australia, New Zealand, Japan market that will be buying and sourcing more locally,” Schreurs said. “But that’s a shame because we are at Global Marketer Week and this has the potential to massively upend how a global CMO or global head of media can do their job.”

While major advertisers haven’t said much publicly about marketing budgets yet, several have raised the alarm that tariffs could hit their broader businesses hard.

They include Diageo, the owner of brands such as Guinness, Johnnie Walker and Casamigos tequila, which has warned that if tariffs on goods from Canada and Mexico are implemented, its profits could drop by about $200m in the second half of 2025.

Having already reduced its advertising and promotional spend by $37m – 2% year-on-year – in the six months to the end of December 2024, before the tariff turmoil began, the drinks giant will need no further encouragement to do so again.

For now, it may feel as though there is little marketers can do when the macroeconomic picture is changing almost daily. But Loerke encouraged advertisers to be proactive and not wait for the worst to happen when it comes to making the case to sustain spend.

“As marketers we tend to talk about the value of advertising each time there’s a recession, but that’s not the right way of doing it,” he said. “We need to be thinking, what is it that we need to be changing in our metrics in order to be aligned with the CEO?”