11 June 2026 – A new study from WARC, the experts in marketing effectiveness, has found that a prolonged conflict in the Gulf region could threaten $39.6bn of global advertising growth this year, and $93.7bn over the next 18 months.
James McDonald, Director of Data, Intelligence & Forecasting, WARC, and author of the research, says: “As the Gulf Crisis stretches into its fourth month, global markets are now in damage limitation mode as the blockade of the Strait of Hormuz acts like a tax on consumers, lifting prices and squeezing real spending power.
“If the conflict drags on – or further intensifies – these risks shift toward stagflation, with sectors such as travel, automotive, and food acutely exposed to higher production costs and weaker demand. The net effect is a grueling squeeze on margins that could put as much as $94bn of anticipated ad market growth at risk over the coming 18 months.”
The fallout from the conflict is being felt differently across regions
- WARC’s baseline scenario is for 11.5% ad market growth in 2026, but if the Crisis were to become more severe, the growth rate could fall to +8.3%
- Southeast Asia (+6.9%) and Latin America (+12.8%) are on course for healthy growth this year, but are most exposed to an increase in severity
- The Gulf ad market could fall into recession (-0.2%) this year, as would the French ad market (-1.0%), in the most severe scenario
- The US (+9.5%) is well insulated and benefits from the World Cup and Midterms; even in a severe scenario the ad market would lose just $10bn in growth
The baseline projection is for global ad market growth of 11.5% to $1.39trn this year, an upgrade from the 10.6% rise predicted in March owing to a strong first half for online platforms. The supply-side pressures caused by the Gulf Crisis, however, are expected to be felt by consumers and brands alike from the second half of the year.
Data shows that Southeast Asia will be among the hardest hit by the conflict, due to vulnerabilities in energy imports and trade flows. WARC’s baseline projects +6.9% ad spend growth for the region to $24.8bn in 2026; a moderate scenario, however, pulls that to +6.3%, and a severe scenario delivers +3.6% – a 3.3pp swing from best to worst outcome.
China‘s exposure is also distinct: imported energy and shipping costs compress industrial margins and export competitiveness. A baseline ad spend growth forecast of +7.9% (to $223.1bn) for 2026 falls to +5.3% in the severe scenario (-2.6pp), equivalent to $5.3bn in lost growth for the Chinese ad market should the situation deteriorate.
While the US isn’t immune to pressures from the situation in the Gulf, its relative insulation shows a clear contrast to the pressures war in the Middle East is placing on other markets. Even under the severe scenario, US ad spend growth is +7.2% in 2026, down 2.3pp from a baseline of +9.5% (to $452.6bn) and equivalent to a shortfall of $9.8bn.
Conversely, the Latin American ad market is on the precipice. Led by Brazil and Mexico, Latin America posts the strongest baseline ad spend growth of any region in the forecast: +12.8% to $27.8bn in 2026. The severe scenario clips that to just +3.4%; a 9.4pp downgrade and the largest single swing in the data.
The markets in the Gulf Cooperation Council (GCC) – namely Saudi Arabia, United Arab Emirates, Kuwait, Oman, Qatar, and Bahrain – are already seeing weakened demand, particularly from global advertisers. Under the severe scenario, GCC ad spend tips into outright contraction at -0.2% in 2026, a swing of -11.9pp against the baseline expectation of +11.7% to $5.7bn.
Ad spend across the Eurozone, where major economies are already stagnating, is set to rise 5.6% to $109.0bn this year. This could, however, ease to just 1.8% growth if the severe scenario is realized. The UK (+6.3%), Germany (+6.7%) and France (+2.7%) are all expected to see ad market growth this year, but the severe scenario removes 3.1 percentage points on average, pushing France into recession should the worst case materialise.
Travel, automotive and food sectors among most susceptible to a prolonged disruption
- Travel & Transport ad spend already forecast to decline (-3.5%) this year
- Automotive ad spend is largely flat in Western Europe, though is still expected to be up globally (+6.7%) in 2026
- Growth in the food sector remains steady this year (+10.3%), but the impacts of present supply chain disruption are expected to be felt more in 2027
Travel is the worst-hit major category and the only one already thought to be contracting at the global level, with ad spend forecast to be down -3.5% to $34.4bn in 2026. Airlines active in the Middle East are already reviewing budget allocations. The sector is expected to record a projected recovery of +13.0% in 2027, however.
The double squeeze of rising inputs on the manufacturer side and consumer credit sensitivity suppressing demand is clearly visible in the automotive sector. Germany – one of the world’s largest car manufacturers – is forecast to see automotive ad spend grow by just +1.9% in the 2026. If the Gulf Crisis were to become more severe, this would fall to a 4.2% contraction this year, a 6.0pp swing from a baseline that was already fragile.
While the food market looks steady – ad spend is projected to grow 10.3% to $99.8bn this year – the sector can be heavily impacted by a complex supply chain: fertiliser, grain, fuel, and packaging costs are rising before consumers feel it.
The full impacts on the food sector are expected to land in H2 2026 and into 2027, when the severe forecast scenario trails the baseline by 1.2pp, wider than the 2026 gap. Europe’s major markets are impacted significantly: UK food ad spend grows +4.9% in the baseline and contracts -0.2% in the severe scenario: a 5.0pp swing that tips the category negative.
There is an uneven impact on brand- and performance-led media spend
- Linear TV’s decline likely to accelerate as the situation worsens, with advertisers favouring short-term, performance channels over brand-building
- Social media growth remains strong, but cost pressures on small and medium-sized companies leave social platforms somewhat exposed
- Paid search – including generative AI – remains stable in all scenarios
In the baseline scenario, the linear TV ad market is forecast to fall 2.7% in 2026, and by the same margin again in 2027. TV’s total share of global ad investment – 12.7% in the baseline across linear and video on-demand combined – slips to 12.5% in the severe scenario. While the 2026 FIFA World Cup provides a cyclical boost in the baseline that partially offsets the decline. However, a severe scenario erodes that buffer.
The headline numbers are robust for social media: 20.0% growth in the baseline forecast this year, falling back to 17.9% in the severe scenario (a 2.1pp gap). The severe scenario therefore costs social platforms $7.8bn, just 11% of incremental ad revenue this year. However, underneath these numbers may lie some vulnerability. Social’s advertiser base is heavily concentrated in SMEs. If smaller businesses are suffering because household spend is declining, then marketing budgets may be at risk. Paid search – including generative AI – provides the most stable picture. In the severe scenario, it still grows +11.0% in 2026 – only 3.3pp below a baseline of +14.3%.
Even under the most disruptive conditions modelled, search, social and retail media will retain two-thirds of global ad spend. The channels absorbing the losses are those already under pressure. Linear TV falls 7.3% this year in the severe scenario (compared to a 3.7% fall in the baseline forecast); publishing contracts 8.5% (compared to a 0.8% baseline dip), and cinema drops 4.0% in the most severe case, versus a baseline forecast of 6.3% growth this year.
Cinema, alongside publishing, is the least resilient channel in the dataset. Cinema advertising is tied directly to leisure discretionary spending and theatrical attendance, both of which weaken sharply when consumer confidence falls and energy-linked transport costs rise.
WARC Media subscribers can read the full report available from Monday 15 June. A WARC podcast on the findings outlined in the report will be available from 18 June.
