Tariffs, shifting budgets, and why performance-focused channels still make sense

Advertisers are once again being asked to do more with less.

With tariffs on Chinese imports set to rise again in 2025, marketers are already feeling the pressure. According to a recent IAB study, 94% of advertisers say they’re concerned tariffs will force budget cuts, and 74% anticipate reallocating spend across media channels as a result (IAB, 2025).

Our expectation is that we’ll see a 90-day grace period, as brands pause to evaluate how the situation unfolds and decide on next steps. For companies that rely heavily on overseas sourcing, particularly China, there are a few clear paths. Some will take a wait-and-see approach. Others will place large purchase orders to stock up before tariffs hit. In those cases, brands may temporarily reduce marketing budgets to finance the influx of inventory.

But as we saw during COVID, short-term pullbacks often bounce back fast. Some brands dropped marketing spend by 40%, only to reinvest heavily weeks later once they were ready to move product. That temporary dip created a window of opportunity for others to step in and gain share.

The takeaway: there will be movement, and there will be opportunity for brands that stay ready.

Why CTV Makes Sense Right Now

1. It’s One of the Most Accountable Channels Across the Funnel

CTV has evolved beyond a pure awareness play. With the ability to measure and optimize toward cost-per-site-visit (CPSV) and conversion-based KPIs, brands can treat CTV as a performance channel, not just a branding one. And because audience targeting can be highly precise, marketers can isolate impact and prove true lift through incrementality testing.

2. Tariff-Driven Caution Creates Opportunity

According to MarTech, 74% of advertisers plan to shift budgets in response to new tariffs, not just cut them. That creates opportunity for channels that can prove efficiency and impact.

For CTV, that means fewer competing bids, better access to premium inventory, and stronger results for brands that stay active while others pause. Reallocating toward accountable, high-impact media isn’t just smart—it may be necessary to maintain momentum.

2(a). Inventory Planning May Temporarily Shift Budgets, But the Window Is Short

Brands placing large purchase orders ahead of tariff enforcement may pull back on marketing in the short term. But based on past patterns—including early COVID cycles—this dip is often short-lived. Once inventory is in, many brands quickly return to acquisition mode to drive sell-through.

That creates a window for strategic advantage. Brands that stay active, or ramp up just before others return, can benefit from less competition and greater share of attention.

Questions worth asking:

• Will clients be bulk ordering early, and temporarily pausing spend?
• Are they shifting sourcing from China to other countries?

Understanding these shifts can help marketers plan around short-term dips and be ready when spend rebounds.

3. Consumer Attention Is Still Strong

While advertisers are cautious, viewers aren’t slowing down. Ad-supported streaming now accounts for over 50% of total OTT viewership, with FAST platforms seeing rapid growth year-over-year (MarTech, 2025).

Consumers are still tuning in and engaging. That creates meaningful opportunity for brands to stand out, especially with fewer advertisers competing for attention.

4. CTV Buys Are Nimble and Responsive

Unlike linear or long-lead brand campaigns, CTV offers speed, flexibility, and control. Advertisers can launch quickly, test into new strategies, and adjust based on performance. In moments of economic uncertainty, that level of adaptability becomes a competitive advantage.

5. CPMs Are More Efficient Than You Might Think

From what we’ve seen across campaigns, average CTV CPMs have dropped more than 15% year-over-year. With more inventory entering the programmatic space, particularly from AVOD and FAST channels, advertisers are getting more value for their spend. For brands under pressure to do more with less, this kind of efficiency is hard to ignore.

6. Going Dark Has Long-Term Consequences

A Harvard Business Review study analyzing past recessions found that companies maintaining marketing spend during downturns outperformed those that cut back by more than 30% in long-term revenue growth (HBR, 2010). Pulling back may protect short-term margins, but it risks weakening brand equity, market share, and long-term momentum.

Final Word

Economic pressure demands recalibration, not retreat. CTV gives brands a way to stay present, stay efficient, and stay ready to capture demand when it returns.

We believe this is one of those moments where the smartest brands won’t just ride it out. They’ll adjust intentionally and come out stronger on the other side.

CTV isn’t just a place to spend. It’s a place to invest.