‘Predictability has become a luxury’: As the Iran war drags on, ad markets are starting to sweat

Whatever hope remained that this would be a short war is fading. And with it, the assumption that the economic damage would be too. BlackRock CEO Larry Fink said high oil prices for a sustained period would trigger a “steep and stark recession” — one that, according to the World Advertising Research Center, could wipe out nearly $50 billion in ad spend this year — and another $44 billion the next. It’s the worst-case scenario. Or at least it was.

“When we first started looking at it [the forecast], we were conscious of the developments in the Gulf and the impact it could have. But with every week that passes there’s this nagging sense that this actually will be a problem,” said Alex Brownsell, head of Content at Warc Media.

So much so that what once looked like Warc’s most pessimistic forecast is starting to resemble its base case. That’s much down to the scale of the conflict as it is the type of shock it’s having on trade. Oil crises like this are stagflationary, meaning GDP falls even as inflation rises. Ebiquity puts the ad spend multiplier at 1.7x – so for every 1% hit to GDP, ad budgets take a 1.7% knock. In a straight recession marketers can cut rates and stimulate their way out. Stagflation doesn’t offer that exit. 

“If I were an advertiser right now, I’d be thinking about planning for contingency — putting some budgets on ice, just in case,” said Thomas Bailly, head of international growth at ad tech vendor readpeak. “We’re not seeing the economic impact of that just yet. But the questions are starting.”

Even so, the picture isn’t uniform. The relationship between economic shock and ad spending isn’t as direct as it once was — the two have largely decoupled since around 2020. Much of that is structural. Much of advertising now is just availability: making sure products show up in the right places at the right moment. When times get hard, brands don’t abandon paid search and retail media. If anything, they lean harder into performance. Which means large swathes are, for now, largely insulated. The floor is higher than it was in 2008. But that doesn’t mean everyone benefits equally.  

“Predictability has become a luxury,” said Bailly. “And when it runs out, precision is what’s left. Tighten your targeting, protect your brand-safe environments by leaning into contextual activations that hold their value when the news cycle shifts beneath your feet.”

Marketers, in other words, are on notice. They’ve watched enough geopolitical crisis metastasis into macroeconomic ones to know how this tends to go: an energy crisis drives up the cost of transporting goods, inflation follows, consumer spending contracts and when recession bites, marketing budgets are first on the chopping block. At that point, the world has bigger problems than whether brands can afford to run campaigns. But the hit to ad spend would be real, and so would the consequences, from job cuts to consolidation. 

History offers a partial counterweight. During the 1990 Gulf War, oil prices surged around 150% peak to trough — then normalized within six months once the conflict resolved and alternative producers ramped up. Ebiquity’s analysis of comparable disruptions also consistently shows that marketers which held or grew investment during periods of uncertainty recovered market share faster and delivered stronger-long-run ROI than those that cut. The risk, in other words, isn’t just in the macro – it’s in over-reacting to it.

The difference this time is that infrastructure is being physically destroyed. Refineries, pipelines and tanker terminals. That changes the normalisation calculus. The 1990 playbook assumed the underlying supply capacity was still intact once the shooting stopped. That assumption is harder to make now. 

Chris Mele, founder and managing partner, at agency Siberia, put a finer point on it: “We’ve noticed a little bit of recent hesitation with respect to larger investments in innovations. We can’t attribute this directly to any of the ongoing global conflicts, but between AI disruption, volatility in markets and general instability here in the U.S. and abroad, there seems to be a slight air of caution these last 4-6 months. That said, there are bold organizations and leaders with their eye on the 5-10 year horizon who are indeed pushing forward. It’s a difficult risk/reward analysis, but you can only call check so many times before that window closes.”

For now, the mood is less panic than contingency. Budgets are going on ice. Campaigns are being pulled. Agencies are being asked how quickly they can stand down. The smarter operators are shifting spend toward media lines without cancellation fees or long advance booking deadlines — preserving optionality rather than committing. Sir Martin Sorrell has already seen enough: he’s calling a revenue decline at S4 Capital for the first quarter. 

 “Among the key growth drivers and challenges to advertising and marketing media in 2025 and 2026 are the impact of major geopolitical tensions around the world, such as the Russia-Ukraine conflict, the Israel-Hamas stand-off, China’s continuing threats against Taiwan, the global tariff wars, the Israel-US strikes on Iran and the residual effect across the Middle East,” said PQ Media CEO Patrick Quinn, citing the firm’s just-released Global Consumer Media Usage Forecast 2026-2030.

“These major trends are having the greatest impact on the media business — both positively and negatively — depending upon which of the three industry KPIs you’re tracking.”