Uncertainty is the real cost of the Middle East war for advertisers

WPP’s Middle East revenue fell 12.6% like-for-like in the quarter. Meanwhile Publicis’s MEA business was down 5.1%, with the conflict’s reach extending into Sapient’s U.K.’s operations — enough to put roughly 10% of the consulting firm’s total revenue in the conflict zone. Omnicom didn’t break out specifics but the Middle East and Africa were among its only declining regions. 

Zoom out and the macro picture gets starker: the IMF’s April World Economic Outlook concluded the conflict has already halted the momentum that was expected to carry global growth to 3.4% this year. eMarketer, modelling oil above $100 a barrel, puts the hit to 2026 ad growth at $28 billion in a contained scenario. If the conflict persists, Omdia has that number closer to $50 billion, with another $44 billion at risk in 2027.

Add it all up, and it’s clear that the industry is no longer just watching the conflict — it’s absorbing it. And the depth of that absorption, as Jack Koch, svp of research and insights at IAB put it, has less to do with revenue than with resolve. 

“It’s not even about whether companies are going to make less or more money,” he continued. “It’s that they can’t make budgeting decisions. The uncertainty is what drives the question — and that of course impacts marketing budgets.”

How much advertising ultimately takes depends on how long that uncertainty persists. Talks are stalled, the Strait of Hormuz remains effectively closed and the ceasefire — extended indefinitely by President Trump but violated by both sides — is holding in name only. Until something changes, the uncertainty Koch described isn’t going anywhere. 

“We’ve noticed a little bit of recent hesitation with respect to larger investments in innovations,” said Chris Mele, managing partner at agency Siberia. “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 four to six months.”

CMOs, it seems, are doing what they always do when the horizon gets uncertain — protecting short-term budgets, deferring the big transformation decisions, and waiting to see which way this lands.

“Western advertisers are catching up to a playbook the global south has known for years: fluid budgets, contingency planning, and teams trained to activate or stand down activity on short notice,” said Thomas Bailly, head of growth at demand-side platform Reapeak. 

It’s a playbook born of necessity. A pandemic, the macroeconomic volatility that followed, the geopolitical aftermath of those reverberations and now widening regional conflict have seen to that. Predictability, for most marketers, has become a luxury they can no longer count on. As Keith Turco, CEO of B2B agency Madison Logic, explained: “The macroeconomic conditions absolutely drive lower budgets, which drive conversations around marketers saying ‘I need to do more with less’ or ‘I need to make every dollar feel like 10’, which means they need to measure it.”

Which brings advertising back to one of its more enduring reflexes. When budgets tighten, everything has to justify itself. Because macro conditions don’t cause ad spending to fall directly but they do cause the uncertainty that causes CFOs to question budgets, which causes CMOs to get cautious, which eventually shows up in the numbers — albeit with a lag.

“Clearly, the war has contributed to uncertainty, but brands were uncertain even before about the state of the markets,” said Scott Shamberg, president & CEO of agency Mile Marker. “Right now, for most brands, the more powerful impact on budgets is how low consumer sentiment is. If consumers have low confidence, are anxious about their own pocketbooks and feel stretched, brands have to take that into account in their own messaging and flighting.”

It’s a sentiment that appears to be hardening across the industry. 

“Broadly, it feels like brands have come to accept geopolitical disruption as part of the operating environment, much as they have with tariffs, Covid, the war in Ukraine, and other geopolitical conflicts over the years,” said Kate Watts, CEO of brand consultancy Fifty Thousand Feet. “At this point, much of the impact still feels somewhat theoretical for many sectors; outside of concerns around fuel and energy costs, we haven’t seen it materially trickle into budget decisions yet, and it may not, depending on industry exposure.”

For all the focus on the conflict, the more immediate pressure on marketing budgets may have less to do with oil prices and the Strait of Hormuz than with AI. The conflict is a headwind. But for most marketers right now, its background noise to a louder, closer disruption.

“If anything, conversations with clients and procurement teams continue to be far more dominated by AI, its implications for investment priorities, efficiency, and competitive advantage than by geopolitical conflict,” said Watts. “For now, most clients seem focused on managing through uncertainty rather than reacting with immediate budget shifts…. all to say, too soon to tell.”