IAB Upgrades Podcast Ad Spend Forecast Despite Economic Challenges
Despite global economic headwinds and tightening ad budgets, the Interactive Advertising Bureau (IAB) has issued a revised forecast that points to a surprising winner in the second half of the year: podcast advertising.
In its September 2025 Outlook Study, the IAB confirmed that while overall U.S. advertising spending is expected to grow at a slightly slower pace than previously predicted, podcasting remains one of the fastest-growing digital channels, outperforming earlier projections.
Overall ad spending in the U.S. is now projected to grow 5.7% YoY – down from January’s 7.3% growth forecast.
Macroeconomic uncertainty and tariff concerns remain top challenges for advertisers.
Podcast ad spending is now forecasted to grow 7.9% in 2025, up half a point from the start of the year.
Digital audio’s share of the ad market is expected to hit 10%, combining podcasts and other streaming audio.
Linear TV spending faces the sharpest decline, predicted to drop 14.4% YoY, largely due to a lack of political ad dollars.
Economic Headwinds: Why Budgets Are Tightening
The IAB report highlights the dual pressure faced by advertisers:
Tariff Impact: Nearly all buyers surveyed expressed concern over how tariffs are affecting ad budgets and pricing.
Consumer Pullback: Changes in consumer spending habits are forcing marketers to scrutinize every dollar spent.
Measurement Challenges: Difficulty proving ROI and cross-channel attribution is preventing some advertisers from ramping up budgets.
According to IAB VP Chris Bruderle, this environment is accelerating the shift toward performance-driven media:
“If consumers are pulling back, that means every single dollar of ad spend has to earn a return,” Bruderle explains. “Auto, retail, and consumer electronics advertisers are leaning harder than ever on bottom-funnel channels.”
Shift Toward Bottom-Funnel Advertising
In response to economic uncertainty, advertisers are prioritizing revenue-generating channels over brand awareness campaigns.
Social media ads remain a top choice for driving repeat purchases.
Performance campaigns are favored over expensive branding efforts.
Customer retention is being prioritized over acquiring entirely new customers.
This reallocation reflects a trend across industries where ROI-driven marketing strategies dominate the conversation.
Podcast Advertising: A Bright Spot for Marketers
Despite overall caution, the IAB notes “solid increases” across most digital channels, with podcasts leading the way:
Podcast ad spend forecast:+7.9% YoY (up from +7.4% in January)
Digital audio excluding podcasts:+4.7% YoY (flat versus earlier projections)
Combined audio share: Podcasts + streaming audio now account for 10% of total ad spend — one-third higher than January’s forecast
This upward revision signals marketer confidence in the medium’s effectiveness and its ability to deliver measurable results.
Online Video & CTV: Still Growing, But at a Slower Pace
Other digital channels are seeing growth — but not at the rate originally expected:
Online video ad spend: Now projected to grow 7.4% YoY, down from 8.8% in January.
Connected TV (CTV) ad spend: Still expected to climb 11.4% YoY, though lower than the 13.8% originally forecast.
The IAB attributes these slight pullbacks to SMBs (small-to-medium buyers) cutting back on ad spending as they brace for possible economic turbulence.
Traditional Media: Facing Steeper Declines
The outlook is less optimistic for legacy media channels:
AM/FM Radio, Print, Out-of-Home, Direct Mail: Now expected to fall 3.4% YoY (versus the 1.5% drop forecast earlier).
Linear TV: Suffering the most, with a projected 14.4% YoY decline, largely due to the absence of midterm political spending.
This shift underscores how advertisers are redirecting budgets from traditional platforms to measurable, digital-first channels.
Industry Insight: Buyer Sentiment Remains Positive
IAB CEO David Cohen acknowledges the challenges but remains optimistic about the future of digital media:
“The marketplace reacts poorly to uncertainty,” Cohen notes. “But the silver lining is that buyers remain optimistic. Budgets may tighten, but there’s strong confidence that digital media can deliver the measurable results they need.”
What This Means for Marketers and Media Planners
This IAB update serves as a strategic blueprint for advertisers navigating a volatile economy:
Lean into performance-driven channels like podcasts, paid social, and programmatic.
Measure ROI aggressively to justify spend and secure future budgets.
Diversify media mix to maintain visibility while optimizing for cost-efficiency.
With consumers becoming more cautious and tariffs influencing market conditions, agility will be key for advertisers in Q4 and beyond.
Where to Access the Full Report
The IAB’s “2025 Outlook Study – September Update” provides a deep dive into ad spending forecasts, growth strategies, and buyer sentiment across more than 200 surveyed brands and agencies. Marketers and media buyers can download the full study from the IAB official website.
