As long as the marketing industry has existed, it’s been the case that when global financial disruption strikes, marketers must pivot. Those pivots represent challenges, but they’re also opportunities for brand leadership and differentiation. The volatility of global economic conditions in recent years has accelerated the rate at which these pivots are fired at marketers. The international trade tariffs in 2025 are just the latest example. It’s tough to derive clarity in the moment, but many brands don’t have the luxury to wait. The decision to save or to grow can be pressing to make, but getting it wrong can have dire consequences.
In this edition of Plain Talk, we explore how marketers can take a disciplined, strategic approach to budget planning in the face of global tariffs and economic uncertainty.
KEY TAKEAWAYS
- Tariffs disrupt supply chains unevenly, with industries like automotive, retail, and consumer electronics hit hardest.
- Marketers must carefully decide whether to cut back or invest more to maintain market presence.
- Budgets are shifting toward ROI-driven, lower-funnel performance tactics under pressure to show results.
- The balance between brand awareness and performance depends on industry exposure, financial stability, and long-term goals.
- Marketing is an investment, not a discretionary expense, and should align with business strategy.
- Strong brand positioning amplifies ROI and creates opportunities to gain market share when competitors pull back.
The Long Domino Effect of Tariffs
The economic impact of trade tariffs this year has been widely studied. The impact is far-reaching to the point of touching all companies, but doesn’t hit all industries equally or at the same time. Since the tariffs touch the purchase of raw materials, production of finished goods and the transportation of both raw and finished goods, it affects all aspects of the manufacturing/distribution process.
But that’s still not even the final domino. There’s also the trepidation in the marketplace due to uncertainty and volatility. But how does this affect marketing?
Decision Point: To Save or To Grow
As with the COVID-19 pandemic, the financial recession and the large-scale global financial disruptions that preceded those, all marketers are left with the same key question: “Should we save budget by pulling back on marketing or preserve our presence in the marketplace?”
It’s a difficult question to answer and certainly is not one size fits all. This is why taking a disciplined approach to addressing the question is a must for marketers. So, how have marketers been thinking about their marketing spend so far in 2025?
The Interactive Advertising Bureau (IAB) released a survey early in the year that showed sentiment from ad buyers about the likelihood of their marketing budget being slashed. They re-administered the survey in September, and some interesting insights can be drawn from the shift in results over that period.
January 2025 vs. September 2025 IAB survey results
| Start of 2025 | September of 2025 | Takeaway |
| 57% “extremely concerned” their budget will be cut (37% were “moderately concerned”) | 25% “extremely concerned” their budget will be cut (66% were “moderately concerned”) | Marketers remain nervous, but the panic has eased (at least from industries that shouldn’t panic) |
| Little differentiation by industry. Asked if they expected ad spend in their category to be negatively affected by tariffs, no industry reported as being higher than 40%. | The impact by industry has become much more clear. Automotive (69%), Retail/eComm (67%) and Consumer Electronics (62%) separated themselves from other industries while other categories signaled a growing level of comfort such as financial services (10%), media/entertainment (10%) and restaurants/QSR at 22%. | Our understanding of the impact of the tariffs has become clearer. Instead of being viewed as a broad sweeping disruption, we now better understand the true impact more granularly. |
| In Q1 of 2025, ad spend grew 7% YOY. | In Q2, ad spend increased by just 5% compared to 2024. | Overall, marketing growth cooled in 2025. Interestingly, social media was the biggest area of net growth but also the area that fell the shortest of its forecasted growth going into the year. CTV was an area of growth later in the year, which could be due to its balance of measurability and brand awareness. |
| 35% were focused on performance campaigns (lower funnel) | 42% were focused on performance campaigns (lower funnel) | This suggests that marketers are facing growing pressure to show ROI, which is steering them to lower-funnel tactics. |
| 39% shifting to channels with strong measurement | 29% shifting to channels with strong measurement | Like the ROI shift, marketers are shifting their focus out of pressure to show results. |
| 62% focused on new customer acquisition, and 16% focused on driving repeat purchases. | 64% focused on new customer acquisition, and 21% focused on driving repeat purchases. | Acquisition remains the dominant goal here, but more emphasis on repeat purchases makes sense given that it costs up to 5 times as much to attract a new customer as to retain an existing one. |
How Much of Your Focus Should Be on Performance Versus Brand Awareness?
This is specific to each brand. There are multiple factors to weigh, and the importance of getting it correct is high. Below are factors you should take into consideration when determining your marketing mix during disruption.
Do you operate in a high-exposure industry?
Human nature makes us want to focus on conversion-centric tactics when times are bad, but if your industry is as high-exposure as auto, eComm or consumer electronics, you may get more long-term return by investing in your brand recognition at a time when consumers aren’t buying anyway.
What does your budget stability look like long-term?
Marketers always know what their budget is, but that’s not the same as long-term budget stability. Brands backed by financial stability are better positioned to maintain a long-term focus, while financially volatile businesses may have no choice but to shift to entirely performance-based tactics.
What does your competitive landscape look like?
Where you stand in the pecking order, your opportunity to advance and risk of dropping all need to be taken into account.
What is your competition doing?
Rather than looking at what the competition is doing in terms of overall spend, go a little more granularly and consider both their brand presence and their performance spend. Opportunities could arise on either side of the fence. If the competition turns a blind eye to awareness, you can pounce to take brand recognition from them. If they drastically decrease their PPC efforts, go take their market share with a performance campaign.
Where does your strategic horizon stretch to?
If your current business objective is survival or very near-term growth, then PPC will be favorable. If medium-term growth is your objective, that might steer you to a healthy mix between brand and performance, where you’ll want to go heavier on awareness if it’s long-term growth that you’re after.
Should Marketing Be Viewed as a Discretionary Spend?
No, marketing is not a discretionary business expense. It’s an investment, but what type of investment it is will vary by company. This is where it’s important that your marketing strategy aligns with your overarching business strategy.
- If the business is focused on short-term growth, marketing should focus on performance-based tactics that can drive results quickly.
- If long-term growth is the business objective, then it makes sense to invest more in your brand than in short-term results or promotions.
When brands do view marketing as a discretionary activity, it can be indicative of them not having been successful at aligning their marketing efforts with the organization’s overall business strategy.
If your marketing feels like it’s not currently effective, there’s a good chance your efforts need to be reexamined rather than pulling the plug on marketing outright.
The strong positioning factor
On top of marketing/business alignment, another factor that can make your marketing spend much more effective is strong positioning. The fact is that the stronger your positioning, the more return you get when you invest in your brand. This is where a tremendous opportunity comes into play. If your competition is reducing its marketing, you have budget stability and you have a strong position, that combination of circumstances means you’re primed to invest in your brand to take brand recognition share from your competitors and position you for long-term dominance in your industry.
Conclusion
There’s no avoiding the truth that disruptions from tariffs have affected the marketing industry. However, indiscriminately cutting advertising dollars is never the correct answer. A disciplined approach must be taken to determine what’s right for your organization.
For some, that will mean reducing spend. For others, it will mean doubling down by updating their brand positioning and then investing in making it ubiquitous in the marketplace.
If you need help determining the right fit for you, drop us a note or call 502-499-4209 and let us lend you a hand!
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