Digiday Media Agency Report 2025: How clients are experimenting and spending — from AI to tariffs

President Donald Trump’s tariffs have already affected client spending, and there is lingering uncertainty among agency executives about how tariffs will continue to impact budgets. Advertisers like Kimberly-Clark have begun to tighten their belts. The personal care company recently said that it had cut its overall marketing spend 10.8% compared with last year’s second quarter.

IPG’s Magna Global, which issues quarterly ad-spend forecasts, said in June that it had adjusted its 2025 growth forecast downward by 1.2 percentage points due to less optimistic economic forecasts and reduced business confidence since December 2024. It now projects global advertising revenues for media owners to reach $979 billion in 2025, up only 4.9% in comparison with 2024.

Likewise, in June, WPP Media revised its global ad revenue growth rate downward to 6.0% from a previously projected 7.7% increase, a 13.7 percentage difference. It cited disruptions to global trade and continued deglobalization pressures weighing on advertising investment as reasons for the change. WPP Media now expects global advertising revenue to reach $1.08 trillion in 2025.

While ad spending is down, AI tools have continued to rapidly evolve and become more nuanced. The latest iteration gaining media agencies’ attention is agentic AI. Agencies told Digiday that their clients are eager to use this new technology despite being unclear on what agentic AI can do or how it might affect internal workflows.

“That’s going back to where we find the efficiencies,” said Andrea Montano, evp of strategy, insights and connections at Assembly Global. “It’s about how you make smarter decisions more quickly, to have the outcomes that you want and be compensated accordingly. There will be some shifts with how we have commercial agreements with clients as a result of AI, which could be incredible — beneficial on both sides.”

Bearing all of this in mind, Digiday’s 2025 media agency report examines the current and future state of media agencies from the perspectives of total client spending and spending by media channel. It also delves into the impact of agentic AI on the agency landscape.

To assess the current state of media planning and buying and to understand which channels clients are investing in now and where they will be spending in the future, Digiday+ Research collected responses from 96 agency professionals in a survey fielded in July and August 2025.

For additional industry insight, Digiday hosted a focus group of seven senior media agency executives who oversee media investment at holding company-owned and independent media agencies to gather first-person accounts of client spending. Agencies and networks that participated in the focus group were:

• Assembly Global
• Horizon Next
• IPG Mediabrands
• Mediahub
• Mile Marker
• Novus
• PMG

Amid concerns over tariffs and the U.S. economy, media agency clients are tightening their budgets in 2025, Digiday’s survey found. Nearly half of respondents (45%) said clients decreased their budgets this year. Less than one-third of agencies said that budgets remained the same (32% of respondents) and fewer than one-quarter said budgets increased (22% of respondents). 

This year’s decrease in client spending is a notable change from the results of last year’s agency report, when 39% agencies told Digiday their clients had increased their budgets in 2024.

Among respondents who said budgets have decreased in 2025, though, more than half (53%) said budgets have decreased by less than 20%. 

These conservative budget decreases may reflect a tempered approach to the negative impact of tariffs and inflation on consumer spending. The threat of tariffs, whether they are ultimately put in place or not, can lead to marketplace confusion, consumer hesitancy and pullbacks in media spend.

Executives who participated in Digiday’s focus group noted that spending has been down in particular among clients whose products are affected by governmental changes to public health programs and new tariffs. 

“We have insurance [clients] and we’ve gotten some pretty big cuts because we have government funding for Medicare and Medicaid,” Assembly Global’s Montano said. “That was kind of a punch in the gut for Q4 when you have an open enrollment.”

Drew Corry, svp of strategic investment and marketplace strategy at IPG Mediabrands, said spending by auto makers is down as well. “The entire category, from our perspective, is affected by tariffs,” Corry said. “We’ve got foreign automakers, but from what I understand, on a macroeconomic perspective, even the American automakers were affected by it as well.” 

Natalee Cecil Geldert, head of brand media at PMG, said that some clients are adjusting budgets on a day-to-day basis. “From a performance channel perspective, we’re almost in the spirit of day trading,” Geldert said. “What are hourly, if not daily, reads on performance and the business’ bottom line, and calibrating budgets in real time to where we’re seeing success.”

But not all clients are pulling back on spending. Several focus group participants noted that spending has been either flat or up slightly in 2025 for categories like financial services, travel, technology and pharmaceuticals. The time of year can also affect spending, according to Geldert. 

“Heading into Q3 and priming for Q4, retail is starting to see an uptick, especially with new product inventory being released prior to the holidays,” Geldert said. “And, coming into the sports season, we’re starting to see things pick up — MLB coming into the end of the season and playoffs, and NFL and college football beginning to kick off.”

Montano said that, ultimately, most clients would prefer to spend consistently throughout any given year. “We’re seeing a lot of clients feel vulnerable with their seasonality,” she said. “Clients who make most of their money in the fourth quarter want to flatten out that seasonality. I could see a world where not any single quarter will be a disproportionate spend in the near future, just because of the way that I think clients want to operate.”

Just as clients were cautious with 2025 spending, agency respondents told Digiday they expect to take a similarly conservative approach in 2026. Nearly half of survey respondents (48%) said that they expect clients’ budgets to remain the same in 2026. In comparison, more than one-third of respondents (38%) said they expect budgets to increase in 2026, while 15% said they expect to see budget cuts.

IPG Mediabrands’ Corry said that, while spending may see a slight uptick next year due in large part to global sporting events, overall growth will be modest. “It should be up, but it’s going to be artificially driven by things like the World Cup and the Olympics,” he said. “Those have a tendency to push investment up. The best we can tell, it looks like it would moderate growth if you took that out.”

“There are still a lot of uncertainty and unanswered questions about major countries as it relates to tariffs,” Corry added. “We’ve seen some consumers and some companies pull forward spending, but on the back half, whether or not that’s needed, the jury is still out.”

“If the upfront is any indication, the market for 2026 looks slightly stronger than 2025,” said Mike O’Connor, evp and head of investment at Horizon Next. “Broadly speaking, it feels a little rosier, a little sunnier than 2025.” 

Survey respondents agreed. Among respondents who said budgets will increase in 2026, the majority (62%) said increases will be in the conservative 10%-19% range.

Assembly Global’s Montano said agencies’ expectations for client spending in 2026 may vary depending on whether their clients are national or worldwide brands. “Part of it also depends on your client roster — multiregion clients, or true global clients,” Montano said. “We’re a little bit more optimistic [about 2026 spending] because the global GDP is looking a bit stronger. If that could continue, I think in the U.S., we’ll be a little bit more bullish about it.”

Interestingly, Rob Davis, president and CMO at Novus, and Scott Shamberg, president and CEO at Mile Marker, both told Digiday that clients have said their 2026 budgets won’t increase much, but that they expect them to spend big in 2027. 

“A couple of new business pitches have noted the 2026 budget is X [amount], but the 2027 budget is already projected to be X times, plus 50%,” Davis said. “[The message is] ‘we’re still going to wait and see, but then the next year — 18, 24 months out — is when [we’ll spend].’ It was almost like [hearing], ‘our budgets aren’t that big, but trust us, they’re going up when we think things will really settle, which is the following year.’ I had never seen that before.”

“We’ve seen that too, and I had never seen that before either,” Shamberg added. “I’m interpreting that as, ‘I know the budget for next year is not exactly what you would want, but the next year, I swear, is going to be huge.’”

Digital channels will be the big winners when it comes to where clients increase their spending in 2026, according to Digiday’s survey results. The top channels in which agencies said they expect to see budget increases in 2026 are: streaming video and CTV (72% of respondents); social media (66% of respondents); search marketing (55% of respondents); and retail media (45% of respondents).

During periods of economic uncertainty, digital channels are relatively easy to scale up, and just as easy to pull back on. They also tend to be less expensive than traditional channels.

The same instinct driving clients’ total budget fluidity is also guiding where they spend. Clients want to stay nimble and not get boxed in, according to Mile Marker’s Shamberg. “What I’m hearing [from clients], and it goes back to the economic uncertainty, is how much flexibility can we build into what we’re talking about committing,” Shamberg said. “There was uncertainty going into 2025 certainly, but going into 2026 that’s an even bigger ask up front. … They’re looking for as much flexibility as they can possibly get.”

“As budgets become more digital, where there is inherently more flexibility … knowing that so much of your dollars now are in digital channels that are ultimately flexible has given some sense of comfort in a market that has been, from a financial standpoint, so tumultuous,” added Horizon Next’s O’Connor. “There may be uncertainty and concern, but because we do have flexibility to optimize on an ongoing basis, the consumer shifts towards digital and the budgets that followed, make that a little bit more manageable.”

Clients are also adjusting media channel spending because of the current political climate, according to Mile Marker’s Shamberg. “We are getting legitimate questions from our direct mailers about one, the cost of postage, and two, what is the future state of the USPS,” Shamberg said. “Is that going to get privatized or go away? Political impact to those types of questions and decision making trickle down into, ‘do I pull my direct mail, spend back, go more into digital?’”

Among the media channels included in Digiday’s survey, streaming and CTV was the No. 1 channel in which agencies said they expect clients to increase spending next year. Nearly three-quarters of respondents (72%) said that they expect clients to increase their streaming and CTV spend in 2026.

Over the past year, ad costs have come down on streaming and CTV platforms — driven by Amazon’s launch of its Prime Video ad-supported tier — which likely accounts for more ad dollars shifting into the channel. Netflix CPMs fell from $42.14 in Q1 2024 to $31.05 by Q2 2025, for example. And Amazon CPMs slid from $35.25 to $28.01 during the same time period.

“Consumption has grown tremendously and there are more ad opportunities with Netflix and with Amazon,” said Horizon Next’s O’Connor. “While demand has been there, pricing has been more favorable from a buyer’s perspective. … We all continue to see streaming pricing come down for the most part, largely due to more options from a supplier perspective.”

“The supply has caught up, as has the demand,” IPG Mediabrand’s Corry agreed. “We saw CTV as a place a lot of our clients wanted to invest in this year. You can still see the erosion on the linear side, but a lot of that was picked up on the digital side.” 

Clients also have a better understanding of CTV advertising’s benefits than in the past, according to Mile Marker’s Shamberg. “There’s more education on the part of the brands for CTV, and understanding what they can get — not just from an inventory perspective, but from a measurement perspective — and from new technologies like [elastic container registry] ECR,” Shamberg said. “Before, [CTV] was a bright, shiny object. Now, [clients are asking] ‘what part of my media mix should it be.’” 

Streaming platforms have continued to increase the amount of live sports programming they carry as well, which appeals to clients who want to reach massive sports audiences. But it also creates competition in the marketplace.

“There’s a lot more opportunity than used to exist for clients that typically felt like they couldn’t break through with enough meaning and budget,” said Stephan Indich, evp and head of integrated investment at Mediahub. “At the same time, because the sports market is so hot, the demand is there. Clients who have bigger budgets are coming in sooner to lock in what they want.”

“This year has been wild,” Indich added. “It’s been nice to see that increase in interest. But, of course, it makes for a very volatile marketplace.” 

Assembly Global’s Montano said she’s also seeing a crossover between streaming and CTV and retail media advertising in terms of both consumer data collection and the use of interactive shoppable ads. For example, Roku partnered with Instacart on shoppable retail media action ads. In addition to providing first-party customer data for ad targeting, the partnership helped CPG brands measure whether their ads drove sales on the grocery delivery platform. 

Retail media was the fourth-most important media channel in which agencies said that they expect to see increased client spending in 2026 — 45% of survey respondents said this.

“I love how now it’s [CTV] being connected to partnerships with retail media networks,” Montano said. “It’s the collaboration of the connected TV … using that shoppable data. It’s in this sweet spot because, as a strategist, I think about how it flexes as brand equity and also flexes down to drive performance. Now, if you have the best of both worlds, it’s going to continue to exponentially grow, which will be exciting to see and, in terms of using that data, will pay off for clients.”

At industry events from Cannes to the Digiday Media Buying Summit, the topic of AI has permeated executives’ conversations over the past year. By now, most agency executives and their clients are familiar with generative AI, which continues to steadily infiltrate more corners of the media business — creating efficiencies across content, production, research, data and media planning and buying. But far fewer clients are aware of AI agents and how they can be used within media buying.  

Unlike conversational generative AI tools like chatbots, AI agents can take action on users’ behalf. They can complete tasks, interact with other software systems, make decisions and act independently. However, when Digiday asked agencies about their clients’ familiarity with agentic AI, nearly three-quarters of agency respondents (73%) said their clients do not understand what agentic AI is and how it can be used to optimize ad campaigns.

Digiday’s focus group participants said that clients have questions about how AI agents are made, what they’re capable of doing and what they can’t do. 

“One [question] is just how and where are you [the agency] using it,” Novus’ Davis said. “How are you going to reduce fees by saving time and energy? How is what you’re doing going to make us smarter than the competition? Then, there’s a very specific question that I don’t think I’ve talked to a client in the last four to six weeks that they haven’t asked, ‘how is it impacting both paid and organic search?’”

Davis said some clients are seeing site traffic declines of as much as 30% and they are attributing most of the drop to agentic AI’s effects on search results. For example, Google’s AI Overviews feature has been credited with tanking search traffic to publisher and brand sites since it was launched in the U.S. on May 14, 2024. The feature shows users AI-generated summaries at the top of their search queries, ahead of links to articles and websites. And, according to research published in December by consultancy Bain, 80% of consumers resolve 40% of their searches without going further than the search results page.

Marketers worry that if organic traffic’s being impacted, the search traffic they try to attract with paid media spend might also be in danger. But it’s not all bad news for clients when it comes to agentic AI. AI search visitors themselves convert at 4.4 times the rate of average organic search visitors, according to Semrush.

And Mediahub’s Indich said dips in traffic caused by agentic AI are forcing agencies and their clients to think outside of the box when it comes to search content. “The good thing is that when clients are seeing that it is affecting their traffic then they’re also more focused on what actual content is being pulled in when they are looking at certain queries,” Indich said. “How do they start to wrap their heads around [gaining] more control over that to make sure it’s the right information? … How do we think about more of a curated environment that clients can have a hand in, and how can we support them? It’s tricky. … But that’s the knowledge growth. That’s part of the learning curve.”

Despite their clients’ lack of knowledge about agentic AI, nearly half of respondents to Digiday’s survey (47%) said their clients are considering using agentic AI in the next 12 months. This may be because marketers are eager to experiment with the latest iteration of AI gaining industry attention. However, the adoption of agentic AI is picking up pace across media agencies.

• Nearly half of agencies (45%) said clients have decreased their media budgets in 2025 — a notable change from last year, when 39% agencies told Digiday their clients had increased their budgets in 2024. Less than one-third of agencies said that budgets either remained the same (32% of respondents) or increased (22% of respondents) in 2025.
  
• Among respondents who said budgets have decreased in 2025, more than half (53%) said budgets have decreased by less than 20%. Inflation and the threat of tariffs often lead to marketplace confusion, consumer hesitancy and pullbacks in media spend.
  
• Agencies expect a similar conservative approach to client spending next year. Nearly half of survey respondents (48%) said that they expect clients’ budgets to remain the same in 2026. More than one-third of respondents (38%) said they expect budgets to increase in 2026, while 15% said they expect to see budget cuts.

• Digital channels will be the big winners when it comes to where clients increase their spending in 2026. Agencies selected CTV (72% of respondents), social media (66% of respondents), search marketing (55% of respondents) and retail media (45% of respondents) as the top four channels in which they expect to see increased spending.
  
• Agency clients are shifting more ad dollars into streaming video and CTV due to CPM cost reductions. Many platforms have also increased the amount of live sports content they broadcast, which appeals to clients who want to reach those massive sports audiences.

• While generative AI continues to steadily infiltrate more corners of the media business, agentic AI remains a mystery to many clients. Nearly three-quarters of agency respondents (73%) said their clients do not understand what agentic AI is and how it can be used to optimize ad campaigns.
  
• Despite their clients’ lack of knowledge about agentic AI, nearly half of agencies (47%) said their clients are considering using agentic AI in the next 12 months. But, clients are worried about agentic AI’s effects on search results.