In
2025, US advertising spending is projected to grow, with digital advertising
leading the market, although the overall growth rate is slowing due to economic
uncertainty and factors like tariffs. Specifically, total ad spend is
expected to reach over $426 billion and digital ad spend will surpass $317
billion, driven by channels like search, retail media, and connected TV (CTV).
However, economic headwinds and concerns about tariffs are causing some
forecasts to be revised downward.
Key 2025 advertising trends
Digital dominance: Digital advertising continues to lead, with growth reaching $317 billion and accounting for 74.4% of total ad spend.
Slowdown in overall growth: While spending is still increasing, the rate of growth is projected to be lower than in previous years due to economic uncertainty, including concerns about tariffs.
Rise of retail media: Retail media networks are a major growth area, projected to account for over a fifth of all digital ad spending in 2025.
Connected TV (CTV) engagement: CTV is becoming a significant performance-driven channel, with 65% of marketers recognizing its potential to drive measurable results and 52% using it to drive web visits and revenue.
Shift in news and content: News organizations are adapting by highlighting other content areas, like lifestyle brands, to reach younger audiences who are on apps and social media, rather than just through traditional news outlets.
Challenges and concerns
Economic uncertainty: Factors like potential tariffs and inflation are contributing to a more cautious outlook for ad spending growth.
Impact of tariffs: The Interactive Advertising Bureau (IAB) found that 94% of US advertisers are concerned about tariffs, with 45% planning to cut ad budgets as a result.
Slowing traditional media: Linear TV and radio are expected to see a decline in non-cyclical ad sales, though streaming TV is growing.
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Excessive TV Advertising
There are so many commercials on TV because networks need to sell advertising time to make money, especially as viewership for traditional TV declines. To compensate for lost revenue from fewer viewers, networks increase the number of commercials per hour to meet financial goals and make up for the drop in ad revenue. This pressure to maintain revenue despite shrinking audiences has led to higher commercial loads.
Revenue generation: Broadcast TV is often free to the viewer, so commercials are the primary way networks and stations generate income to cover operational costs, talent, and production.
Declining ratings: As more people turn to streaming services, the audience for traditional TV has shrunk. To make up for the financial pressure of lower viewership, networks increase the number of ads shown during a given time period.
Increased competition: The rise of cable and then streaming has fragmented the audience, forcing networks to compete for advertisers' money. This competition can lead to more commercials as stations try to maximize revenue from their remaining viewers.
Financial performance pressure: Networks, especially in the cable TV sector, face pressure to meet quarterly financial numbers, which can lead them to prioritize short-term ad revenue over viewer satisfaction, resulting in more commercials.
Economic model of some platforms: Some companies are now using their devices or platforms as a way to generate ad revenue, even if it means a loss on the hardware itself, as shown by the case of Vizio's TV sales versus its advertising platform profit, notes this YouTube video.
Comments
The worst of the excessive TV ads includes: Medicare Advantage Annual Enrollment and Political Campaign Season Ads. Excessive Ads soliciting charitable contributions and endless Pharma ads are next.
Companies need to reduce Ad Expense and invest in developing better products at lower costs.
Norb Leahy, Dunwoody GA Tea Party Leader
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