WARC lifts ad outlook but Gulf crisis risks USD $94bn

WARC has raised its forecast for global advertising spending growth in 2026 to 11.5%, but warned that a prolonged Gulf energy crisis could put USD $93.7 billion of ad market growth at risk over the next 18 months.

The revised outlook puts global ad spending at USD $1.39 trillion this year, up from WARC's earlier projection of 10.6% growth, largely because of stronger performance from online platforms in the first half.

Conflict in the Gulf and disruption to shipping through the Strait of Hormuz are increasing pressure on consumers and companies through higher energy, transport and input costs, according to the research group. Under its most severe scenario, global ad growth this year would slow to 8.3%, cutting USD $39.6 billion from expected growth in 2026, while a further USD $54.1 billion could be lost in 2027.

"As the Gulf Crisis stretches into its fourth month, global markets are now in damage limitation mode as the blockade of the Strait of Hormuz acts like a tax on consumers, lifting prices and squeezing real spending power. If the conflict drags on - or further intensifies - these risks shift toward stagflation, with sectors such as travel, automotive, and food acutely exposed to higher production costs and weaker demand. The net effect is a grueling squeeze on margins that could put as much as $94bn of anticipated ad market growth at risk over the coming 18 months," said James McDonald, Director of Data, Intelligence & Forecasting, WARC, and Author of the research.

Regional split

The impact is not expected to fall evenly across markets. Southeast Asia and Latin America are forecast to post relatively strong growth in the baseline case, at 6.9% and 12.8% respectively, but both are among the most exposed to a worsening of the crisis.

Latin America shows the sharpest swing in the data. WARC expects the region's ad market to reach USD $27.8 billion in 2026 in its baseline view, but growth would slow to 3.4% in a severe scenario, a downgrade of 9.4 percentage points.

In Southeast Asia, ad spending is forecast at USD $24.8 billion this year. Growth could fall from 6.9% to 3.6% if energy import costs and trade disruption intensify.

China is also vulnerable because of imported energy costs and shipping pressures. WARC's baseline forecast puts Chinese ad spending growth at 7.9%, taking the market to USD $223.1 billion in 2026, but that would drop to 5.3% in the severe case, equivalent to USD $5.3 billion in lost growth.

The United States remains relatively insulated compared with most markets covered in the report. WARC forecasts 9.5% growth in US ad spending this year to USD $452.6 billion, helped by the World Cup and the midterm elections, though even there a severe scenario would reduce growth to 7.2% and leave a USD $9.8 billion shortfall.

Across the Gulf Cooperation Council, weakening demand from international advertisers is already visible. In the severe scenario, ad spending in the bloc would contract by 0.2% this year instead of growing by 11.7%.

Eurozone growth is forecast at 5.6% this year, but that could slow to 1.8% in the harshest case. France would slip into contraction under that scenario, while the UK and Germany would each lose about three percentage points of growth on average.

Sector pressure

Travel, automotive and food are the sectors most exposed to a prolonged disruption. Travel is already the weakest major category in WARC's figures, with global ad spending in the sector expected to fall 3.5% to USD $34.4 billion in 2026.

Automotive spending is under pressure from both rising manufacturing costs and weaker consumer demand. In Germany, one of the world's biggest car-making markets, automotive ad spending is forecast to rise just 1.9% this year in the baseline case, but would turn into a 4.2% contraction in the severe scenario.

Food advertising is still expected to rise 10.3% globally to USD $99.8 billion this year, though supply chain pressures in fertiliser, grain, fuel and packaging are expected to be felt more strongly in the second half of 2026 and into 2027. In the UK, food ad spending would shift from 4.9% growth in the baseline forecast to a 0.2% decline in the severe case.

Media effects

The report draws a clear distinction between media tied to long-term brand spending and those linked to direct response. Linear television is expected to suffer the sharpest declines as advertisers shift budgets towards channels with more immediate returns.

Under WARC's baseline case, global linear TV advertising will fall by 2.7% in 2026 and decline by the same rate again in 2027. In the severe scenario, the drop this year would deepen to 7.3%.

Publishing and cinema are also exposed. Publishing ad spending is projected to contract by 8.5% in the severe scenario, compared with a 0.8% decline in the baseline, while cinema would shift from 6.3% growth to a 4.0% fall.

By contrast, social media and paid search are expected to remain more resilient. Social media ad spending is forecast to grow 20.0% this year in the baseline case and 17.9% in the severe scenario, while paid search, including generative AI formats, is expected to rise 14.3% in the baseline and 11.0% even under the most disruptive conditions.

Even in the worst-case scenario, search, social and retail media would still account for two-thirds of global ad spending.