Madison and Wall’s Brian Wieser warns: the U.S. ad market is up, but the cliff’s still there

Specifically in the U.S. where ad spending (excluding political ads), is expected to grow 6% in the second quarter, and for the full year. That’s a notable jump from Madison & Wall’s March forecast, which pegged growth for the year at just 3.6%. 

“Coming into the first quarter things seemed like they would be softer [compared to the same time the previous year, and it turned out they came out very strong,” said Brian Wieser, principal at Madison and Wall. 

As usual, digital was the biggest beneficiary. In uncertain times – and these qualify – marketers double down on flexibility. Digital channels give them the levers: easy to scale up, just as easy to pull back. That nimbleness helped the category grow 4.9% in the first quarter (again, excluding political ads). Wieser now sees it jumping 9.9% in the second quarter and 10.3% for the year. 

No surprise where the momentum’s coming from: commerce, retail and social are the main drivers. Meanwhile, the open web continues to sputter along. It eked out 2.4% growth in the first quarter – right in line with its performance for the past couple of years. For the full year, Wieser expects just 1.7% growth. 

TV isn’t fairing much better. It was essentially flat in the first quarter – up by 0.1%. National TV (including pure-play CTV platforms but not YouTube) rose by 2.0% while local TV sagged 5.4%, all excluding political ad dollars. For the full year, Wieser expects national TV media owners to shrink by 2.7%, partly due to tough comparisons from last year’s Olympics – but mostly thanks to the industry’s slow bleed of revenue share. 

Through it all, digital TV (think CTV) is quietly gaining ground. It’s share of the TV pie ticked up from 27% to 29% year over year in the first quarter. Full year growth will look muted due to the post-election cooldown, but strip out political spending and growth should be closer to 10%. 

On that note, political advertising was “relatively flat” in the first quarter, said Wieser. But it was down slightly versus the same periods in 2023 and 2021 – the quarters following the last U.S. midterms and presidential elections. That softness, said Wieser, may signal a plateau: the fierce competition and deep pockets that have defined political spending cycles could finally be leveling off. 

The bigger picture 

Add it all up and ad spending looks surprisingly strong. But looks can be deceiving. Advertising tends to mirror the broader economy – and the economy remains shaky. Wieser’s frequent forecast revisions are a reminder: advertising’s resilience should not be mistaken for permanence. 

Look at the state of the U.S. economy, for instance. On the surface, it might appear in good shape – GDP grew by 4.7% year over year in nominal terms. But dig deeper and the foundation looks less firm. A good chunk of that growth came from companies rushing to import goods ahead of potential tariffs – not from sustained consumer demand. 

That kind of artificial boost may juice short-term economic growth but it doesn’t build long-term ad stability. And now that imports are cooling, the deeper engine of economic growth – and by extension, advertising – may be losing steam. 

So yes, ad dollars are flowing. But the economy supporting them may be far more fragile than the top line numbers suggest – particularly when American shoppers are still bracing for the worst. The spending they are doing looks less like a sign of confidence and more like a hangover from government stimulus, not genuine wage growth. 

“The world has not yet come to an end but it doesn’t mean there’s not some serious risks that just keep building by the day,” said Wieser. “And so the challenge is not saying if we’ll feel the consequences, it’s when because there’s going to be a meaningful risk that’s really negative.”

To be clear, he’s not forecasting a financial crash. He’s talking about stagflation – the kind of grinding, slow-burn scenario that wears down growth, spending and eventually advertising too. Marketers are watching it closely. They may be spending now but they’re keeping their budgets flexible, ready to pull back at the first real sign of consumer weakness. That’s the paradox of this moment: ad spend is up – but so is anxiety. 

“It is too early to offer guidance on Q3, but ad spend in the back half of the year will be hugely dependent on how strong U.S. consumer demand remains and any resulting shifts in ad performance we might see as the impacts of tariffs become more real in the months ahead,” said Andy Taylor, vp of research at Tinuiti. 

Uncertain as the future is, Wieser is adamant about the following: the forces that typically drive sustainable economic growth – and by extension stable ad spending – are under pressure. 

Tariffs and policy unpredictability are weighing down efficiency, raising cost and discouraging long-term investment. Even efforts to stimulate the economy through selective deregulation or tax cuts are unlikely to deliver meaningful gains, especially when compared to the real growth that comes from innovation, productivity, global integration and smart capital allocation. When those fundamentals take a back seat to short-term political maneuvers, the result is a less stable environment for both the economy and the ad market that moves with it. 

“We’re not saying the ‘Sword of Damocles’ is hanging over the industry here,” said Wieser. “If anything, the metaphor is the coyote running over the cliff and continuing to move very quickly to try and get to the other side.”

The question now is whether there’s enough momentum to carry the economy to solid ground – or whether gravity finally kicks in.