Tariffs Prompt Caution, But Ad Giant Havas Sees Stable Ad Budgets.

Clients have not yet pulled back on their advertising. That is the word from the global ad giant Havas, which is offering the first assessment from Madison Avenue of how the tariffs are impacting large brand’s marketing spending.

“We have not suffered any budget freeze or budget cuts for our main clients, at least for the time being, which is totally different from what happened during the COVID crisis,” said Havas CFO/COO François Laroze during an earnings call Thursday. He told analysts that it is a “very fast evolving” situation, however, and clients they work with are in a watch-and-wait mode. “Some of them are obviously worried by the impact of the tariff crisis on their own businesses and they are working with us should it happen to find the best answer. But today, we see clients focused on their own business and trying to understand what could be the consequences,” Laroze said.

Havas Media works with a number of pharmaceutical, financial and insurance clients, such as GSK, Fidelity and PNC Bank—and not segments like automotive and retail that may be more impacted by any tariffs. The Paris-based company reported total revenue of 2.1% during first quarter, with its North American business up 3.2%. Despite so much uncertainty in the global economy, it also reaffirmed its full-year 2% or better growth outlook. “ As advertising is, by nature, a regional and/or local service business, Havas has not observed at this stage any direct impacts of the new tariffs on its business,” its quarterly update says.

The Recession What-If

Even as the tariff implementation remains in flux, the die may be cast for a resulting recession according to some economists. That risk has led media analyst Michael Nathanson, of MoffettNathanson, to develop an outlook for the U.S. ad market if there is an economic downturn this year. He currently predicts the ad market will grow 6.5% in 2025. But if there is a downturn, he models a 5.7% decline—or a potential swing of 11.5%. “In a world where a recession hits the U.S., advertising will be hit harder - even in a relatively mild and quick recession scenario,” Nathanson says.

In a report to clients MoffettNathanson says that if economic growth slows to 3% in 2025 and advertising intensity falls, Nathanson estimates about $45 billion could be lost in U.S. ad spend versus current forecasts.

“As in previous downturns, we continue to believe that online advertising will hold up better than traditional TV and other legacy channels,” Nathanson says. “In a more cautious environment, marketers will prioritize performance-driven advertising over broad brand campaigns — a dynamic that favors digital and measurable media.” He says that if there is a recession, a “sharp rebound” is unlikely, saying the 2021 bounce back after the pandemic was “an anomaly.”

Even before the April 2 tariff announcement, Nathanson say his firm’s channel checks indicated that brands were already exercising caution and holding back budgets while awaiting clarity on trade policy. He also points out the timing of the sudden upheaval for TV couldn’t be worse ahead of the upfront negotiations, set to kick off in the weeks ahead.