How Tariffs Are Shaping the Next Phase of Paid Media Strategy

Tariffs are the latest hot topic, and they’re already shaking up paid media strategies across many industries.

With costs climbing and uncertainty rising, it comes as no surprise that a recent Interactive Advertising Bureau poll found that 94% of advertisers are worried about how these tariffs could impact their budgets. And with social media ad spend expected to drop by up to $10 billion by 2026, these concerns aren’t just noise.

Let’s be honest, we’re not economists. And this isn’t about macro policy. But we are digital marketers. And from our vantage point, this moment isn’t just a challenge, it’s an opportunity.

It’s a chance to pause, re-prioritize, and get more intentional about where your marketing dollars are going.

In this piece, we’ll break down what’s happening, why it matters for marketers, and how you can adapt your strategy without losing momentum.

What Tariffs Have to Do With Paid Media

At first glance, tariffs might feel like an upstream issue, something for procurement or logistics to solve. But they cascade. Rising costs on goods often mean tighter margins, reduced budgets, and pressure to justify every dollar.

That pressure shows up quickly in performance marketing.

• CPMs climb.

• Channels that once scaled efficiently start to lose their edge.

• Stakeholders want to pull back on "awareness" and double down on "efficiency."

In many ways, it mirrors past cycles of economic uncertainty, but this time, it’s also hitting in the middle of shifting data privacy rules, AI-driven automation, and audience fragmentation.

Translation: the old playbook won’t cut it.

How Tariffs Are Disrupting the Ad Market

In early 2025, President Donald Trump reintroduced a sweeping round of tariffs, renewing economic uncertainty across U.S. industries. Targeting a broad spectrum of imports, the proposed measures have raised immediate concerns for businesses already navigating rising costs and tighter margins.

The timingcomes on the heels of a record-breaking 2024, which saw the fastest U.S. ad spend growth since the 1980s. But because of the current tariffs and anticipated inflation to follow , eMarketer has revised the 2025 U.S. ad spend growth forecast from 7.5% to 6.3%.

Now, with operating costs climbing, businesses are taking a closer look at every line item, including advertising. And if it feels familiar, that’s because it is. Much like the early days of the pandemic, marketers are once again being asked to do more with less. balancing tighter budgets against the same performance targets.

Once again, we’re shifting from spending more to spending smarter with less.

How Advertisers Are Responding to Tariffs

The full impact of the tariffs is still playing out, but the early signals are clear. Brands across industries are already making moves. They’re not cutting spend entirely, but they are shifting focus, doubling down on channels that deliver and pausing investments that don’t show clear return.

Spending Shifts Are Already Under Way

Retail giants like Temu and Shein,once two of the most aggressive advertisers in the U.S. have already started pulling back. Their media spend has dropped sharply, signaling a broader recalibration in how even high-growth brands are approaching paid strategy.

• Temu slashed its ad budget across Meta, YouTube, and X by 31% in early April

• Shein cut U.S. ad spend by 19%, with the biggest pullback on YouTube

They’re not alone.

According to a recent IAB survey:

• 45% of advertisers plan to reduce their overall ad spend

• 41% expect to cut back specifically on social media platforms

It’s a familiar pattern. When budgets tighten, brand awareness campaigns, especially upper-funnel efforts are often the first to go. In their place? Paid search, performance-driven media, and anything that can prove its ROI in real time.

Projected Ad Spend Cuts by Channel Due to Tariffs

Source: Martech

Social, display, and video are expected to take the biggest hits. These upper-funnel channels, while powerful for awareness, are often harder to defend when budgets shrink and pressure mounts to prove short-term impact.

Paid search, by contrast, is holding its ground, and for good reason. It’s measurable, efficient, and built for conversion. When someone’s actively looking for a solution, showing up in that moment still delivers.

As conditions shift, cost control, adaptability, and transparency are moving to the top of every CMO’s list. The brands that weather this well won’t be the ones that pause. They’ll be the ones that pivot, with clarity and purpose.

Why Cutting Ad Spend Could Cost You More

We get it, things feel uncertain. Budgets are tighter, headlines louder, and the instinct to pause or pull back on paid media is understandable. But if the past few downturns have taught us anything, it’s this: going dark rarely pays off.

Yes, spend is under pressure. But expectations haven’t gone anywhere. People may be spending differently, but they’re still spending, especially on essentials and considered purchases. And when your brand disappears from their field of vision, you’re not just saving money, you’re handing momentum to someone else.

The brands that stay visible are leaning into:

• Conversion-focused channels like paid search, remarketing, and shopping ads, built for intent, not impressions.

• Agile media plans that flex with market conditions, not against them.

• Channels with tight attribution loops, where performance is measurable and every dollar earns its place.

In times like these, clarity isn’t a luxury. It’s your edge.

Why Staying Present Pays Off

So why stay active when the outlook feels shaky? Because history, and the data show that the brands who do tend to come out ahead. Research from Harvard Business Review, McGraw-Hill, and other independent studies shows that brands that maintain or strategically adjust their marketing spend during economic downturns outperform in the long run.

Across decades of economic uncertainty, the pattern is consistent: visibility during a downturn isn’t a risk, it’s a multiplier.

Consider:

• After the 2008 recession, companies that maintained marketing spend saw up to 3.5x more brand visibility and recovered faster than those who pulled back.

• A McGraw-Hill study found that during the early 1980s recession, brands that kept or increased investment grew 256% more than those that cut back.

• In 2023, Nielsen reported that cutting ad spend by 50% can lead to a 25% drop in brand awareness while investing when competitors go quiet can significantly boost share of voice.

The takeaway? Going dark might feel safe. But it often costs more, in brand equity, in recovery time, and in long-term growth, than staying present ever will.

5 Smart Ways to Adapt Your Paid Media Strategy

When budgets tighten, strategy matters more than ever. These five moves go beyond quick fixes, they're frameworks for smarter decision-making in unpredictable conditions.

1. Invest Where You Can Measure

When every dollar is being questioned, your best defense is clarity.
This is the time to prioritize channels that tie directly to outcomes, where intent is high and attribution is clean.

Think:

• Google Search and Performance Max, which capture demand from people actively looking for what you offer.

• Remarketing, which brings high-potential users back to convert.

• Shopping ads, where product, price, and conversion potential live side by side.

The goal here isn’t just efficiency, it’s accountability. These channels tell a clear story: here’s what we spent, here’s what we got, here’s what we learned.

And that story travels well, whether it’s to finance, the boardroom, or your next budget review.

2. Let the Data Drive, Not the Headlines

It’s easy to panic when the macro picture looks unstable. But budget cuts made without data are just educated guesses, and guesses don’t scale.

Instead, ground your decisions in actual performance signals:

• Break down your ROAS by campaign, audience, and device.

• Separate top-funnel from bottom-funnel performance, don’t punish one for the other's inefficiencies.

• Identify thresholds, not just winners and losers. What’s underperforming but worth testing? What’s no longer viable?

Don’t forget to include seasonality, sales cycle length, and assisted conversions. Optimization in tight times is less about cutting and more about rebalancing.

If your media mix hasn’t changed in six months, now’s the time to rethink it.

3. Tighten the Funnel, Don’t Just Trim It

Marketing waste doesn’t always live at the top of the funnel.
Sometimes it’s hidden in the cracks between click and conversion.

Right now, every step in your customer journey needs to be frictionless, and every asset needs to pull its weight:

• Are your landing pages aligned with your ad promises?

• Are your forms short, intuitive, and mobile-optimized?

• Are your CTAs clear, timely, and actually compelling?

Go further:

• Use heatmaps and session recordings to understand where users are dropping off.

• Revisit your post-click experience as if you were a skeptical first-time visitor.

• Compare first-touch vs. last-touch metrics to see where value is getting lost.

Conversion rate optimization doesn’t always require big rebuilds. Sometimes, it’s about fixing small barriers that cost you big.

4. Build for Flexibility, Not Just Efficiency

Rigidity is a liability in a volatile market.
Even a high-performing strategy can underdeliver if it's locked into the wrong channels or audiences at the wrong time.

Here’s what flexibility looks like in practice:

• Automated bidding strategies that adjust in real time, not just based on CPCs, but on conversion likelihood.

• Segmented budgets that allow you to test without compromising your core campaigns.

• Daily performance check-ins instead of monthly recaps, because waiting a quarter to adjust is too slow now.

Also key: bake agility into your approval processes. The ability to pause, reallocate, or test on short notice can be the difference between reacting and leading.

5. Don’t Go It Alone, Leverage Perspective

This isn’t a solo sport.
When pressure is high and visibility is low, the smartest thing you can do is invite more brains into the room.

Look for partners who aren’t just managing tactics, but helping you rethink strategy.
At Camino5, we’ve helped brands navigate moments just like this by:

• Reallocating spend away from broad awareness and toward high-converting audiences.

• Finding underutilized channels with better ROI-to-risk ratios.

• Designing leaner testing frameworks that still yield actionable insight.

The common thread? We don’t chase impressions, we chase outcomes.

Whether it’s helping your internal team reframe KPIs, reforecast budgets, or reimagine performance measurement, a second set of eyes isn’t a luxury. It’s a multiplier.

Strategies Built to Withstand Any Economic Forecast

If you take anything from this, let it be that now is not the time to pause your digital marketing efforts. It’s time to refocus, reoptimize, and re-strategize by leaning into data-driven decision-making and prioritizing what works.

Yes, the economic outlook is messy. But within that uncertainty is room for innovation, efficiency, and momentum.

Ryan Edwards, CAMINO5 | Co-Founder

Ryan Edwards is the Co-Founder and Head of Strategy at CAMINO5, a consultancy focused on digital strategy and consumer journey design. With over 25 years of experience across brand, tech, and marketing innovation, he’s led initiatives for Fortune 500s including Oracle, NBCUniversal, Sony, Disney, and Kaiser Permanente.

Ryan’s work spans brand repositioning, AI-integrated workflows, and full-funnel strategy. He helps companies cut through complexity, regain clarity, and build for what’s next.

Connect on LinkedIn: ryanedwards2