Q2 brought calm, but not confidence as CMOs spend with caution

“Normally, we get visibility on ad spending six to nine months ahead for CMOs whereas now that’s three months,” said Tal Jacobson, CEO of ad tech vendor Perion. “They’re not necessarily spending less so much as they’re being careful.”

That’s industry speak for “budgets are fluid”.  If tariff, inflation or another economic curveball hits profits, marketers want the wriggle room to pivot — or pull back — fast.

“Our client ad spends for Q2 are as expected at the beginning of the year and flat year on year,” said Andy Travis, chief client officer at media agency Mediaplus U.K. “Given the volatile nature of the first half of the year in terms of global economics, hitting advertising spends in certain sectors like automotive and retail, this is no mean feat.”

And that caution isn’t confined to one region. 

From the U.S., to Europe to China, CMOs are keeping a close watch. No matter where they look, the story’s the same: costs are climbing, shoppers are nervous and confidence is fading. Not because tariffs have fully landed, but because everyone is bracing for the moment they do. 

“Q2 always feels transitional for me,” said Scott Tehrani, media strategy director, 26PMX, an MSQ agency. “Not only are you moving back to higher price points, but in retail, you are starting to embed new products and category lines that don’t immediately sell. You are back to a longer, more nudging, nurturing, and ultimately less linear journey.”

In other words, flexibility is the strategy. The same instinct driving fluid budgets is guiding how marketers plan: stay nimble, stay ready and don’t get boxed in. 

Tehrani’s clients, which include shoe brand Hoka, grocery brand Asda, and beverage business Diageo, for example, are spending 18% more so far in Q2 compared to the same time last year. Most of that growth is coming from social — still smaller in absolute terms but nearly double year-on-year — while search has grown more modestly. The shift speaks volumes: the faster and more adaptable the channel, the more likely it is to see dollars flow.

“Year to date, we’ve seen growth year-over-year in media spend,” said one media buyer who exchanged anonymity for candor on how their clients are spending. “We saw a slight increase in 1Q 2025 as well, and that increase has remained consistent thus far for the second quarter.”

Even so, steady growth comes with caveats. A handful of this buyer’s clients have paused or cut spending this quarter, mainly due to soft sales or product-specific pressures tied to tariffs. Consumer goods, healthcare and industrial sectors are among those feeling the pinch. And that pressure spreads. Trade wards don’t just disrupt supply chains, they contract and throw central banks off balance. No sector is immune.

“For Q2 and Q3 right now we are seeing things largely unchanged from start of year forecasts,” said Tucker Matheson, co-CEO of Markacy. “All brands are monitoring their global impacts and measuring their media spend differently to understand where they can cut or be more efficient.”

It’s the classic downturn playbook: double down on what performs fast, and make every dollar work overtime. 

“Digital ad spend continues to track in line with expectations so far in Q2, with investment in key platforms like Google, Amazon, and Meta continuing to grow year-over-year for same-store Tinuiti advertisers through mid-May,” said Andy Taylor, vp of research at Tinuiti. 

So far, fears that the industry would talk itself into a sharper slowdown haven’t materialized. But the next two quarters will tell the real story. Marketing is still a must, whether to grow or simply protect market share. But when budget cuts come down from the C-suite, brand dollars are often first in the firing line. 

“While we’re seeing a welcome uptick in media investment across the first half, we’re also seeing that investment chasing faster returns and an increased focus on delivering as much ROAS as possible,” said Duncan Smith, chief product officer at Journey Further. “This could be seen as depressingly short term and at the expense of building stronger and more engaging brands (and advertising) but it is also understandable given the enormous uncertainty across the economy over the last five years.”

Whether they’re being shuffled or slashed, in moments like this ad dollars tend to flow to the usual suspects — performance channels like paid search. According to Jeff Eisenfeld, director of search at Media by Mother, spending on that channel has held up through the turmoil.

Related Insights

Evolving Agencies

After a year of Google’s AI Overviews, marketers consider tweaking their paid search strategies Read More

“Clients just want us to be as proactive as possible and to try to be really flexible,” he said.

When the pace picks up and performance matters, not everyone feels the squeeze equally. That’s why outlooks across publishers, broadcasters, retail media networks and platforms vary so widely. Some are simply better positioned to scoop up the performance-driven dollars that tend to hold steady in a downturn. Even better off are those that have blurred the line between brand and performance — turning caution into opportunity. 

“We’ve seen more advertisers embrace mid-funnel storytelling and UGC, especially in the FMCG, but also in B2B and financial services where customers are out of marketing a lot longer, they are in-market and ready to buy,” said Tehrani. “Clients have also run far more incremental tests this year, which has meant turning off some low funnel activity with the plan to reinvest that money in other areas.”