{"id":125090,"date":"2025-04-11T13:20:25","date_gmt":"2025-04-11T18:20:25","guid":{"rendered":"https:\/\/www.dacgroup.com\/insights\/blog\/none\/2025-media-inflation-what-advertisers-need-to-know-now\/"},"modified":"2025-04-11T15:39:43","modified_gmt":"2025-04-11T20:39:43","slug":"2025-media-inflation-what-advertisers-need-to-know-now","status":"publish","type":"post","link":"https:\/\/www.dacgroup.com\/en-ca\/insights\/blog\/paid-media\/2025-media-inflation-what-advertisers-need-to-know-now\/","title":{"rendered":"2025 media inflation: What advertisers need to know now"},"content":{"rendered":"\n

Over the last few years, the cost of media has been rising, and this trend is expected to continue into 2025. Key drivers of media inflation\u2014beyond general economic conditions\u2014include increased demand for ad space, limited inventory, changes in consumer behavior, and growing platform dominance.<\/p>\n\n\n\n

In the U.S., political volatility shaped by new leadership, tariffs, and slowing economic growth is impacting advertisers in several ways. According to recent data, 94% of U.S. advertisers are concerned about the economic climate, and 45% plan to reduce budgets in response<\/a>. At the same time, political uncertainty and low trust in media\u2014only 7% of Americans express strong confidence\u2014are driving audience avoidance and raising brand safety concerns.<\/p>\n\n\n\n

As a result, advertisers are pivoting away from \u201criskier\u201d contexts like news, politics, and some areas of social media. Instead, spend is shifting toward perceived safe zones like arts, lifestyle, live events, and sports. That migration is pushing up prices in those categories as demand intensifies. Meanwhile, tariffs on imported goods are expected to hit apparel, electronics, and consumer products especially hard, causing some brands to reduce or delay ad investment. A repeat of the post-pandemic playbook\u2014passing costs on to consumers and reinvesting profits in advertising\u2014is likely in sectors with enough pricing power.<\/p>\n\n\n\n

While media buying will feel the effects, it is retailers who will be most directly impacted by the 2025 tariff environment. Rising costs\u2014particularly in apparel, electronics, and home goods\u2014are pushing many to rethink pricing, promotion, and checkout strategies. Some are testing value-added incentives and even itemizing tariff-related surcharges at checkout. While transparent, this approach can increase price sensitivity and affect conversion rates.<\/p>\n\n\n\n

Overall, media inflation in 2025 will be driven by strong advertiser demand and a still-expanding media supply, but within a cautious economic outlook. According to the ECI Media Inflation report<\/a> for Q1 2025, overall media inflation is forecasted to be at +2.5%, which is a smaller growth figure than +3.4% in 2024. While not as sharp as previous years, advertisers should still expect moderate year-over-year cost increases. Linear TV is losing pricing power due to fragmentation, while digital channels\u2014especially CTV, social, and search\u2014are absorbing higher spend and seeing rising costs. Inflation is cooling, but it\u2019s far from over.<\/p>\n\n\n

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\"A<\/figure>\n<\/div>\n\n\n

Source: <\/em>Q1 2025 Media Inflation Report<\/em><\/a>, ECI Media Management<\/em><\/p>\n\n\n\n

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Linear and connected TV: Diverging paths<\/h2>\n\n\n\n

Linear TV is expected to see minimal or potentially negative ad price inflation in 2025. With no major events like the Olympics or a presidential election to drive spikes in demand, the landscape is relatively calm. Many brands continue shifting their budgets to digital, further softening the market.<\/p>\n\n\n\n

Although cord-cutting and declining ratings are reducing available inventory, this tightening of supply is being offset by shrinking demand. Advertisers aiming to reach younger audiences are especially likely to pull back. If economic conditions worsen, we may even see zero or negative inflation in scatter markets\u2014particularly in categories like automotive, where tariffs could prompt major spend reductions.<\/p>\n\n\n\n

Meanwhile, CTV is charting a different course, driven by a surge in new ad inventory that has helped temper inflation. Over the past few years, nearly every major streaming platform has launched an ad-supported tier. This influx of premium inventory has expanded advertiser options and driven average prices down.<\/p>\n\n\n\n

One of the most notable shifts came in early 2024, when Amazon Prime Video entered the ad market with CPMs around $35, undercutting competitors like Netflix and Max. The platform added 50 billion new impressions to the U.S. CTV ecosystem, forcing other streamers to lower their ad rates to remain competitive. As a result, average CPMs across top platforms declined. For example, Netflix\u2019s ad CPM dropped<\/a> from ~$42 in Q1 2024 to ~$31 by early 2025, according to eMarketer.<\/p>\n\n\n

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\"Average<\/figure>\n<\/div>\n\n\n

<\/a><\/p>\n\n\n\n

CTV remains on a deflationary trajectory. While demand continues to rise as advertisers shift from linear, the rapid growth in inventory\u2014alongside intense platform competition\u2014is holding costs in check. Premium inventory will still command a higher rate, but overall, CTV is emerging as a cost-efficient, high-impact channel well-suited for today\u2019s market.<\/p>\n\n\n\n

Social media: A game of supply, demand, and volatility<\/h2>\n\n\n\n

Social is expected to see increases in ad costs year-over-year. eMarketer forecasts that CPMs across Meta, TikTok, Snapchat, and YouTube will rise in 2025, with TikTok leading the way at a projected 15.6% year-over-year growth. At the same time, impressions have also increased, indicating that advertisers are competing more intensely for audiences across growing segments such as social video and social commerce.<\/p>\n\n\n\n

Several factors contribute to the price increases. User growth in the U.S. is flattening, which means inventory and impressions are no longer expanding at the pace they once were. Any increase in advertiser spending against stagnant supply is likely to drive up CPMs. Demand for newer video formats\u2014like Reels, TikToks, and Stories\u2014continues to grow, and these formats often carry a premium. Additionally, many social platforms are implementing tighter limits on ad loads and frequency, which means finite inventory is being stretched further as competition intensifies.<\/p>\n\n\n\n

Given ongoing economic strain, messaging strategies across social need to evolve. Brands should shift from urgency to empathy, moving from \u201cbuy now\u201d to \u201cwe\u2019re here with you.\u201d Leading with price alone risks backfiring in a climate of rising costs. Instead, messaging should emphasize lasting value: durability, versatility, sustainability, and relevance to consumers\u2019 lives. Leaning into local or global brand values can reinforce trust, especially as public sentiment around imports and pricing becomes more sensitive.<\/p>\n\n\n\n

Meanwhile, TikTok remains at the center of market volatility. Its future in the U.S. is still uncertain, and competing platforms are positioning themselves to absorb potential ad spend shifts. According to eMarketer, TikTok CPMs dropped as much as 80% year-over-year in January, as brands sought more stable environments. Pinterest is one of the biggest beneficiaries of this reallocation, with CPMs surging as high as +120%. Should a TikTok ban go into effect, similar shifts\u2014and price swings\u2014can be expected.<\/p>\n\n\n\n

Despite the turbulence, TikTok has maintained 90% of its user traffic, proving its staying power with audiences. At the same time, X (formerly Twitter) is showing signs of an ad rebound. With major brands like Comcast and Disney returning, revenue is projected to hit $2.3 billion in 2025\u2014a potential stabilizer if TikTok dollars continue to shift elsewhere.<\/p>\n\n\n

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\"Meta<\/figure>\n<\/div>\n\n\n

Source: <\/em>TikTok CPMs Falling Despite Relevance<\/em><\/a>, eMarketer<\/em><\/p>\n

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