BIA: Tariffs Put Squeeze on Local Ad Revenues

RADIO ONLINE | Wednesday, April 30, 2025 | 2:09pm CT

BIA Advisory Services

BIA Advisory Services is warning that the ripple effects of new U.S. tariffs are beginning to pressure local advertising markets, with small and mid-sized businesses in key industries already reevaluating their marketing strategies.

In two new blog posts -- "When Trade Wars Hit Home: Tariffs and Local Ad Markets" -- and a corresponding report series available to BIA ADVantage subscribers, the firm outlines how rising import costs under the Trump administration's trade policy are expected to curb local ad spending across a range of business sectors.

"These tariffs are not just impacting global trade -- they're reshaping local media economics," said Mark Dugan, author of the first blog post.

The first analysis focuses on the automotive, clothing retail, and furniture store sectors. Each of these relies heavily on goods affected by tariffs on imports from China, the EU, and Japan. A recent survey cited in the blog from the Interactive Advertising Bureau found that 60% of advertisers anticipate cutting their budgets by 6-10% in response to increased costs.

For example, Dugan notes that previous 10% tariffs on imported furniture between 2018 and 2019 triggered a 2.3% rise in prices, straining ad budgets even before inflation and interest rate pressures added to the burden.

The second blog by Suzanne Ackley examines the toll on real estate, restaurants, and home improvement retailers. It describes a "perfect storm" of cost increases across the supply chain.

"In real estate, marketers are shifting their messaging to emphasize long-term value and domestic sourcing as materials costs rise," Ackley explained.

The restaurant sector, already under strain, faces a projected $12 billion hit, according to the National Restaurant Association. Ackley points to Chipotle's reliance on Mexican avocados -- making up half of its supply -- as one example of tariff vulnerability.

Home centers and hardware chains are also under pressure, with BIA projecting over 10% price hikes in categories like appliances and fixtures due to dependence on Asian manufacturing.

In response, BIA emphasizes the need for businesses to focus on performance-driven campaigns and digital channels that offer better ROI and more precise targeting under financial constraints.

"Efficiency is no longer optional -- it's survival," Dugan added. "The key is understanding which channels still deliver value as traditional costs rise."

The full report, "Understanding Tariff Impact on Local Advertising: Business Vertical Analysis," is available to BIA ADVantage subscribers.