A severe and prolonged Gulf energy crisis could erase as much as $93.9 billion in global advertising growth over the next two years, according to new scenario modelling by WARC Media, which warns of major knock-on effects for marketers, consumers and key industry sectors.
The report, titled Three scenarios forecast Gulf energy crisis fallout for global ad spend, highlights how rising energy prices could trigger a chain reaction across the global economy and advertising markets.
WARC states: “Energy prices matter, and as the aftershocks of the Gulf Crisis ripple through the global economy, WARC’s scenario modelling shows how a surge in prices could quietly erase up to $93bn in ad growth over the next two years, forcing marketers to navigate a volatile mix of squeezed consumers, rising costs and rapidly shifting category demand.”
Data-driven projections
The projections draw on extensive global datasets.
According to the study: “WARC’s latest global projections are based on data aggregated from 100 markets worldwide and leverage a proprietary neural network which projects advertising investment trends based on over two million data points.”
Why the crisis matters for marketers
The report warns that even a limited disruption to Gulf energy supplies — particularly around the Strait of Hormuz — could significantly affect consumer demand.
WARC notes: “Even in a contained scenario, in which the Strait of Hormuz is closed only for a short while, an oil shock of this nature acts like a tax on consumers – pushing up prices while eroding real spending power.”
It adds that in a longer 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 study estimates: “The net effect is a meaningful squeeze on discretionary spend that puts up to $50bn of anticipated ad market growth at risk this year.”
Scenario A: Short disruption
Under a baseline scenario, the global advertising market is still expected to expand strongly.
WARC says: “Our baseline scenario predicts global ad market growth of 10.4% to a total of $1.32trn this year.”
However, travel is expected to be a notable exception: “The outlier is travel & transport, where spend is set to fall by 3.5% – equivalent to a net cut of $1.3bn.”
Scenario B: Prolonged oil shock
In a more severe case — comparable to trends seen during the Gulf War — the report forecasts deeper impacts.
WARC explains: “This scenario – a cut of 1.6pp from ad market growth this year, equivalent to $19.0bn dollars – is at the more severe end of those proposed by central banks.”
It adds that persistent oil prices above $100 per barrel could trigger monetary tightening and weaken consumer demand, especially in consumer packaged goods.
Scenario C: Severe systemic shock
The worst-case scenario draws comparisons with the 1973 oil crisis.
WARC states: “The most severe scenario assumes a persistent supply shock with strong second-round inflation… From an advertising perspective, such a shock removes 7.3pp and $93.9bn from ad market growth over the next two years.”
Consumer demand would also weaken sharply: “Consumer confidence collapses in this scenario, and real household spend falls year-on-year.”
Even then, the market would still grow, albeit at a slower pace: “Taken together, the global ad market would still grow 6.2% this year, but this is 4.2pp behind our baseline, equivalent to a cut of $49.9bn.”
The study concludes that the effects could extend into the following year, “resulting in a further $44.0bn of lost growth versus our baseline.”
