Global advertising growth is facing a fresh stress test as disruption around the Strait of Hormuz puts almost $94bn of projected ad investment at risk over the next 18 months, according to the latest forecast from WARC.
WARC has upgraded its baseline global advertising growth forecast for 2026, expecting the market to grow by 11.5% to $1.39tn. The same forecast warns that a quarter of that growth, equal to 3.2 percentage points or $39.6bn, is now at risk because of continuing disruption linked to the Gulf crisis.
A further $54.1bn in 2027 ad expenditure growth could be removed if the crisis continues, WARC said. The firm already expects global ad market growth to slow to 8.2% in 2027 before the full extent of the macroeconomic disruption is taken into account.
The risk runs through energy prices, inflation, household spending, and business confidence. The Strait of Hormuz is one of the world’s most important energy shipping routes. Disruption can affect oil and gas flows, raising costs across transport, manufacturing, food production, logistics, and consumer goods.
Advertising budgets are exposed because they are often more flexible than wages, property, inventory, or production contracts. When inflation squeezes consumers and input costs reduce margins, companies frequently reassess campaign timing, channel mix, and discretionary spend. Brand investment, performance marketing, media owners, agencies, and technology platforms can all be affected.
WARC’s forecast suggests that automotive, food, travel, and transport brands are particularly exposed to prolonged increases in oil prices. Energy and fertiliser costs can feed into production and supply costs, while weaker real household spending can reduce demand in categories dependent on confidence and discretionary purchasing.
The channel effect is expected to be uneven. Search, social, and retail media are forecast to retain a large share of global ad spend even in a severe scenario, while linear TV, publishing, and cinema are more exposed to losses. WARC’s severe scenario expects linear TV revenue to fall 7.3% globally, compared with a 3.7% fall under its baseline forecast. Publishing would contract 8.5%, compared with a 0.8% baseline decline.
The forecast lands during an already difficult budget cycle for marketers. AI pilots, rising customer acquisition costs, measurement demands, and board level scrutiny of return on investment are all competing for resources. Several companies are already funding AI pilots from existing marketing budgets, while separate research has shown that many marketing teams are adopting AI without a defined skills strategy.
WARC’s forecast therefore raises a capital allocation problem inside marketing functions. If inflation and consumer caution cut into demand, companies must decide whether to protect brand investment, shift towards short term activation, delay experimental spending, or reduce total spend.
Marketing cuts can preserve near term cash, but deep or poorly targeted reductions can weaken demand generation. Brand investment is especially vulnerable because its effects are harder to attribute quickly. Gartner research has already pointed to a cycle of weak brand measurement and underinvestment, and a macro shock can reinforce that pattern if finance teams favour activity with immediate attribution.
Retail media and search may continue to benefit from budget discipline because they sit closer to transaction intent. Even so, they are not insulated from weaker demand. Lower conversion rates, higher competition for profitable audiences, and tighter finance scrutiny can still reduce the effectiveness of measurable channels.
Traditional media may face the greater strain. Television, publishing, cinema, and other brand led channels already compete with digital platforms for measurable outcomes. If the market enters a stagflationary environment, advertisers may reduce upper funnel spend first, even where long term brand effects remain commercially valuable.
The agency market will also feel the pressure. Clients will expect faster scenario planning, media reallocation, creative adaptation, and evidence of effectiveness. Agencies that can connect geopolitical risk, category economics, media performance, and consumer sentiment will be in a stronger position than those selling campaign execution alone.
The forecast also reinforces the connection between geopolitical risk and commercial planning. A shipping disruption far from a UK brand team can still affect media budgets through energy costs, consumer confidence, production inputs, and finance assumptions. Scenario planning is no longer confined to supply, treasury, and procurement functions.
Companies heading into 2027 budget cycles will need to decide not only how much to spend, but which forms of demand creation can withstand pressure. Brands with clearer measurement, stronger customer data, and disciplined channel economics will have a better case for protecting investment when external conditions deteriorate.
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