2025 was the year that advertising dealt with shocks to the system: AI disruption reverberated across every part of the ecosystem, Omnicom completed its $13 billion mega-deal for IPG, creating a marketing Goliath, and tariff uncertainty threw certain sectors into chaos.
But when it was all said and done, the ad business grew in 2025, with WPP Media raising its estimate to 8.8 percent for the year, and Madison & Wall raising its estimate to 11 percent growth. Both prognosticators expect 2026 to continue that growth trajectory, with WPP Media forecasting 7.1 percent growth this year (excluding political advertising), and Madison & Wall forecasting 6.6 percent growth this year (also excluding political).
2026 is shaping up to be just as disruptive as 2025 to the industry, as every sector of the advertising business grapples with this new reality. Or as WPP Media frames it, advertising is in an era of “creative destruction”:
“Within these aggregate figures, we see the forces of creative destruction at work: streaming video cannibalizing linear television, retail media capturing budget from legacy digital channels, AI-powered answer engines beginning to reshape search behavior, and creator-driven content continuing its displacement of professionally produced media,” the media buying firm wrote in its 2026 This Year Next Year report. “Each of these shifts resets the scoreboard, ranking losers whose models are disrupted and winners who capture the value being created. At least until the next disruption.”
Unfortunately for Hollywood, it is facing a double whammy.
While commerce media (think stoppable and retail-driven ads), social media and search continue their double-digit growth, and YouTube also continuing to grow rapidly, television continued to collapse, with Madison & Wall projecting a 12 percent decline in Q3 for national TV and a 4 percent decline in local TV.
WPP Media, meanwhile, notes that “television advertising demonstrates remarkable stability in absolute terms, with total TV reaching $167.4 billion in 2025 (+0.6 percent) and $170.8 billion in 2026 (+2.1 percent).
“However, this surface-level resilience obscures a fundamental shift in TV’s market position,” its report continues. “The channel’s share of global ad revenue declines from 15.8 percent in 2024 to 14.6 percent in 2025 and further to 13.9 percent in 2026, as advertiser budgets migrate toward performance-driven digital channels.”
In other words, even as streaming TV offsets some linear losses, the growth elsewhere in the ad ecosystem continues shrinking TV’s piece of the pie.
Worryingly, its report also notes that while streaming TV is still seeing 15 percent annual growth, it appears to be leveling out, suggesting a maturation in the major ad markets.
In the content sector overall, the only real growth lever has been digital media, driven by TikTok, YouTube and Meta. Meta, for example, revealed that its Reels short-form video product now has a $50 billion annual run rate, and it just launched a Reels app for TVs last month, suggesting that it is plenty of growth left to come … at the expense of other recipients of TV advertising, like Hollywood players.
Entertainment companies are responding by building out their programmatic efforts, and finding ways to bring smaller advertisers into their ecosystem alongside the blue chip advertisers that have long sustained the TV business.
“Three critical questions remain for TV: whether streaming can sustain growth as subscription fatigue intensifies, whether sports rights economics remain viable for traditional broadcasters (or shift permanently to tech platforms operating under different monetization models) and whether TV ad sellers can successfully attract revenue from the small and mid-size advertisers that have driven growth for Google and Meta,” WPP Media wrote in its report.
But 2026 also brings with it other more systemic risks, but even there TV is facing a greater threat than other sectors, with tech giants more nimble when it comes to pivoting a business or strategy. The tariff chaos of last spring has subsided, but the tariff threat has not fully dissipated, and Robert F. Kennedy Jr.’s long-promised war on pharmaceutical advertising could wallop the TV business if the worst-case scenario comes to fruition, though the devil will be in the details.
“Several headwinds are building at once,” Madison & Wall’s Brian Wieser writes. “Tariff policy remains unpredictable, making long-term planning harder for global brands. Sector-specific risks, such as potential changes to pharma advertising rules, add further uncertainty. The elimination of the de minimis exemption will likely dampen cross-border commerce flows and the associated ad spend. And geopolitical tension is shifting from tariff disputes to the prospect of broader regional conflict in Latin America. Together, these factors create a more challenging backdrop for the industry which we assess by looking at different scenarios for the economy in 2026 alongside our assumed probabilities of those scenarios occurring and the expected outcome for the advertising industry under each scenario.”
Buckle up, it’s going to be a wild ride.
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