The numbers were already looking promising. WARC’s latest global forecast had put the ad market on course for 10.4 per cent growth this year, with total spend reaching $1.32 trillion, a significant upgrade on its December projections, driven by strong performances from the major online platforms. Then, on 28 February, US and Israeli strikes on Iran forced a grim rethink.
Six weeks into the conflict, what was once WARC’s most pessimistic scenario is starting to look like its base case. The research firm, which aggregates data from 100 markets using a proprietary neural network drawing on more than 2 million data points, has modelled three outcomes.
WARC scenarios
In the mildest, a short-lived supply shock sees global ad growth clipped by $19 billion. In the most severe — a prolonged closure of the Strait of Hormuz with oil pushing above $150 per barrel — the industry loses $49.9 billion in growth this year alone, with a further $44 billion at risk through 2027.
The International Energy Agency described the current disruption as the largest supply disruption in the history of the global oil market, with crude surging more than forty per cent since late February, pushing prices above $110 per barrel.
The implications for advertising are now arriving in the GCC’s own boardrooms. Coordinated salvos falling from the skies over densely populated financial centers in the Gulf are not only destabilising stock markets and spiking oil and gold prices, as Communicate reported recently, but risk making retail markets casualties — this is significant because the combined UAE and KSA FMCG markets have reached over $36 billion, according to NielsenIQ.
The mechanics of an oil shock on advertising are well understood, if rarely welcome. Higher energy costs seep into packaging, logistics and manufacturing margins; those pressures travel up the supply chain until they reach the consumer; squeezed households pull back on discretionary spend; and brands, watching demand soften and margins thin, begin to question their media budgets.
WARC’s James McDonald put it plainly: “Even in a contained scenario, an oil shock of this nature acts like a tax on consumers — pushing up prices while eroding real spending power.” In a severe disruption, he warns, “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.”
Oil crises of this type are stagflationary, meaning GDP falls even as inflation rises. Ebiquity puts the ad spend multiplier at 1.7x — so for every one per cent hit to GDP, ad budgets take a 1.7 per cent knock. In a straight recession, rate cuts offer an exit. Stagflation does not.
Pause, soft messaging
The effects are already being felt across the region’s marketing community, and the response from GCC industry leaders has been telling. During the recent escalation, Dubai’s advertising, marketing, and media industry showed resilience by adjusting its tone — brands chose to pause, soften messaging, or shift toward more thoughtful and supportive communication rather than pushing forward with business as usual.
That measured response is being codified into a formal strategy. Elda Choucair, CEO of Omnicom Media Group MENA, told Communicate recently that in uncertain times, “leadership is measured by how people feel, not just by the decisions you make,” with ensuring teams feel “protected, informed and supported” the first responsibility of any organization.
Governments across the Gulf have moved swiftly to provide market reassurance. UAE Minister of Economy and Tourism Abdulla bin Touq Al Marri recently stressed that the country has adopted “flexible and forward-looking economic strategies” to absorb geopolitical pressures, while Saudi Arabia’s finance ministry noted that “economic activity across Saudi Arabia continues to operate normally,” highlighting the kingdom’s strong fiscal position and multiple export routes.
The travel and hospitality sector, however, faces a more immediate reckoning. WARC’s data shows that even in its mildest scenario, travel and transport ad spend is set to fall 3.5 per cent — a net cut of $1.3 billion — as airlines and tourism firms already hold back media budgets amid high fuel costs and consumer caution.
Risk strategy, shifting consumer behavior
Middle East travel is losing an estimated $600 million daily in visitor spending since the conflict began, with hotel demand dropping and hospitality advertisers shifting toward discount-led marketing to fill rooms. Major airlines, including Oman Air, have resumed only limited services to select destinations, while British Airways and Singapore Airlines cancellations to Dubai remain valid through May.
For FMCG brands navigating the conflict, the challenge has become one of both economics and context. Ad and PR agencies are now acting as risk strategists — deploying predictive models that can flag when a celebratory campaign might land badly next to breaking news of an airstrike, automatically switching to community-support-focused messaging instead.
Consumer behaviour in the Gulf is shifting too, reinforcing the pressure on ad investment. Within weeks of the conflict’s onset, 65 per cent of consumers said they had already changed their shopping habits, with another 18 per cent planning to do so — cutbacks concentrated in discretionary categories including dining out, travel, and entertainment. The mood among Gulf consumers, already shaped by years of price volatility, is tilting decisively toward value and reliability. Regional leaders interviewed by Communicate describe Gulf consumers as value-driven but still willing to pay for quality— a nuance that brands cutting to the bone on both product and media investment risk losing sight of entirely.
The smarter operators are shifting spend toward media with no cancellation fees or long advance booking deadlines, preserving optionality rather than committing–contingency rather than collapse. As one agency leader put it, the questions are starting even if the economic impact is not yet fully visible in the numbers.
