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The Middle East war is already clawing at advertising spend as business confidence and economies globally take a hit.
S4 Capital is the first of the global players to say that clients have been pulling back as the war continued.
Martin Sorrell's pure-play digital advertising group forecasts a drop in net revenue in part due to the ongoing conflict in the Middle East.
Analysts see growth slowing, inflation rising and interest rates higher as supply lines are squeezed and industry starved of fuel.
Now WARC (World Advertising Research Centre), in its latest Global Ad Spend Forecast update report, has put the Gulf energy crisis in the advertising frame
Food, travel and transport and technology and electronics sectors are among the most susceptible to high oil prices and a prolonged disruption to shipping in Strait of Hormuz.
"Even in a contained scenario, an oil shock of this nature acts like a tax on consumers – pushing up prices while eroding real spending power," said WARC director of data, intelligence and forecasting James McDonald.
“In a more prolonged or severe disruption, we move into stagflation territory, where sectors like travel, automotive, food and consumer electronics take a direct hit from both rising costs and falling demand.
"The net effect is a meaningful squeeze on discretionary spend that puts up to $50 billion of anticipated ad market growth at risk this year, as brands pare back their media investment in a bid to preserve thinning margins."
The latest WARC forecasts, based on latest advertising spend data from 100 markets worldwide and projections of advertising investment patterns based on over two million data points, offers three scenarios based on implications of the Gulf energy crisis.
Offering a complete picture of the global advertising trade, this updated analysis is based on latest advertising spend data from 100 markets worldwide and projections of advertising investment patterns based on over two million data points.
Global ad growth uprated to +10.4% this year – to $1.32trn – but volatile outlook could remove as much as 4.2 percentage points (pp) – or $49.9bn – from growth in 2026.
Ad market growth is expected to ease to 8.2% next year – to a total of $1.43trn – but a prolonged Gulf crisis removes a further $44.0bn from growth prospects in 2027.
A wider tech sector slowdown is already set to hinder social media momentum, but growth expected across the board.
WARC's baseline scenario assumes an oil price holding around $US100 per barrel for up to six months, before normalising in the fourth quarter. In this scenario, the product categories identified as being most susceptible to the shock - automotive, food, leisure and entertainment, and technology and electronics - are mostly expected to record ad spend growth in line with the global rate.
The outlier is travel and transport, where ad spend is set to fall by 3.5%, equivalent to a net cut of $1.3 billion.
An extended shock scenario cuts 1.6 percentage points from ad market growth this year, equivalent to $19 billion, sustaining into 2027 and removing a further $13.3 billion from ad market growth, resulting in the erosion of up to $32.3 billion from global growth over the next two years.
A severe, systemic shock scenario assumes a prolonged closure of Strait of Hormuz with oil reaching $150 per barrel.
This removes 7.3 percentage points and $93.9 billion from ad market growth over the next two years.
Consumer confidence collapses in this scenario, and real household spend falls.
As a result, ad spend growth is either flat - food at 0.7%, leisure and entertainment at 0.2% - or falling, with travel and transport potentially cutting budgets by 5.8%.
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