A prolonged Gulf crisis could wipe out as much as $93.9bn in global advertising growth over the next two years, according to new research from WARC, highlighting mounting risks to the global ad market despite strong short-term gains.
The latest forecast shows global advertising spend is now expected to grow by 10.4% in 2026 to reach $1.32 trillion. However, escalating geopolitical tensions in the Middle East could significantly disrupt that trajectory, with up to $49.9bn of growth at risk this year alone.
James McDonald, Director of Data, Intelligence & Forecasting at WARC and author of the report, says: “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. 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 $50bn of anticipated ad market growth at risk this year, as brands pare back their media investment in a bid to preserve thinning margins.”
The findings are based on aggregated data from 100 markets worldwide, analysed using WARC’s proprietary forecasting model built on more than two million data points.
Under WARC’s baseline scenario, global ad spend will rise 10.4% this year, supported by strong performances from major online platforms. This outlook assumes oil prices hover around $100 per barrel for up to six months before stabilising later in the year.
While the broader economic impact in this scenario remains limited, certain sectors are already feeling the strain. Travel and transport is expected to cut ad spend by 3.5%, as airlines and tourism operators scale back marketing budgets amid rising fuel costs and weaker consumer demand.
Other sectors, including automotive, food, leisure and entertainment, and technology and electronics, are forecast to maintain growth broadly in line with global averages.
However, a more prolonged disruption paints a darker picture. In a scenario where oil prices remain elevated for one to three years, global ad growth could be reduced by 1.6 percentage points in 2026, equivalent to a $19.0bn loss. The impact would extend into 2027, erasing a further $13.3bn from projected growth.
This environment, characterised by tighter monetary policy and subdued household spending, would particularly affect consumer goods and technology sectors, with brands likely to rein in advertising budgets to protect margins.
Worst-case scenario could trigger sharp slowdown in ad spend
In a severe scenario involving sustained disruption to oil supplies — such as a prolonged closure of the Strait of Hormuz — the consequences for the global ad market would be far more significant.
WARC estimates that such a shock could remove 7.3 percentage points from ad market growth over the next two years, equivalent to $93.9bn in lost expansion. Global economic growth would also slow sharply, while inflation could surge and household spending decline year-on-year.
In this scenario, advertising growth in key sectors would stall or contract. Food and leisure categories would see minimal gains, while travel and transport could cut marketing budgets by as much as 5.8%.
Even so, the global ad market would still grow by 6.2% in 2026 — though this would fall well short of the baseline forecast, representing a $49.9bn shortfall. A further $44.0bn in lost growth is expected in 2027 under these conditions.
Tech slowdown weighs on social media growth outlook
Beyond geopolitical risks, WARC also highlights a cooling technology sector as a key factor likely to moderate growth in social media advertising.
While platforms are still expected to post strong gains in 2026, the pace of expansion is set to slow. Instagram is forecast to grow ad revenue by 26.9% this year, with Facebook rising 19.2% and TikTok increasing 24.9%.
However, growth is expected to moderate in 2027, particularly as the surge in artificial intelligence-driven investment begins to ease, especially in the United States.
TikTok is projected to maintain global ad growth above 20% over the next two years, supported in part by increased spending from UK advertisers. Yet the rate of expansion is expected to slow significantly as technology sector investment cools.
Reddit, meanwhile, is forecast to double its ad revenue from $2.1bn in 2025 to $4.1bn by 2027, driven by strong growth in key markets including the UK and Australia. The platform continues to benefit from its role in product research and as a source of data for large language models.
After several years of decline, X is also expected to return to more stable growth, with revenues projected to reach nearly $2.0bn by 2027. Increased political advertising activity around the US midterm elections is expected to provide a short-term boost.
Despite these gains, WARC cautions that broader economic pressures and geopolitical instability could weigh heavily on advertising investment in the coming years, leaving the global ad market increasingly exposed to external shocks.
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