Big Tech braces for tariff induced advertising slowdown

The $350 billion U.S.digital advertising market, which has helped tech expansions into artificial intelligence and a host of other arenas, is preparing for a slowdown.

- Meghan Bobrowsky

Small businesses and ad buyers are evaluating tariff-related pullbacks, and early signs from April point to slowdowns from the auto, travel, fashion and online-spending industries, according to analysts and advertisers.

"There has been a reaction already," said Eric Seufert, a digital-ads consultant. "What companies are doing now is rying to conserve cash to pay the tariffs that they have to pay. The most effective way to do that would be to cut ad spend right now."

The ad sector can be particularly sensitive to economic cycles, as brands pull back on advertising when their consumers are less likely to buy. The tariffs and the subsequent fallout, including inflation and supply-chain disruption, are expected to affect all media and tech companies that rely heavily on ad spending.

A prolonged economic downturn would curb sales from Meta Platforms and Alphabet's Google by tens of billions of dollars. As much as $10 billion in ad sales mainly from China is at risk for Meta. That business has ballooned in recent years owing to the rise of discount-shopping platforms such as Temu and Shein.