The Trump Trade War brings new importance

Media companies are staring at widespread economic uncertainty as the annual pitch for advertisers and marketers begins.

This week, including the Legacy Entertainment Giants Comcast’s nbcuniversal, Fox Corp. and Warner Bros Discovery We will present to advertising buyers about why they should entrust their money to the upcoming sports, entertainment and news programming slate. Netflix and Amazon’s Prime Video is busy with fields holding their second annual frontline. Paramount Global held a presentation with advertisers and agencies last week.

This year, the interests are high as the brand-wide chief marketing officer formulates contingency plans for various outcomes on tariffs, inflation, consumer sentiment, and other macroeconomic changes that may affect spending.

The evolving cost situation adds to the existing headwinds facing the media industry. Pay-TV subscribers are running away for streaming options. And while streaming is beginning to reach profitability for some companies, the service has yet to prove that it is as profitable as traditional bundles. Meanwhile, the competition is tough as digital and social media players gain share in the ad dollar.

That would prove to be a year of this year, clouded by concerns following the Covid pandemic and Hollywood strike. Last year, the advertising market showed stabilization, with management previously saying CNBC 2025 expected to be another year of normalization.

Instead, the industry has its own right – and executives are tweaking their pitch for now.

“The media becomes more complicated with the landscape defined by inflation, regulatory uncertainty, and changing timelines of travel to the market, serving as this backdrop for this season.” “In these moments of uncertainty, there are few places to offer the reach of the Paramount portfolio, brand safety and impact. This is a key point to do in a market like this.”

In an interview with the top advertising chiefs of legacy media companies, executives promoted solid content and reliable audience metrics to demonstrate the importance of advertising during uncertain times. Many executives said they have not yet seen the “material” pullback on advertising spending, as feared.

They said. Live events such as award shows and so-called “must-see TV” can also be a major factor in conversation.

“We’re committed to providing a range of services to our customers,” said Gina Reduto, Executive Vice President of Advertising Strategy at NBCuniversal.

While general entertainment lags behind the sport in ratings, shows like Warner Bros Discovery’s “The White Lotus” produced a steady audience and controlled cultural conversations each week, but they stand out.

“I think everyone knows that no matter what happens, they still have to sell, they still have to move,” said Rita Ferro, president of Disney’s Global Advertising. “They say, ‘We still need to provide our customers with our products and services, we have to do that in the best possible way.” It understands the parameters we are dealing with and what their impact is in terms of pricing. ”

President Donald Trump’s concerns that the trade war could potentially raise prices have not yet led to a pullback in advertising spending, media executives told CNBC. The media company’s quarterly reports do not yet reflect a decline in tariff spending, but the decline in linear television bundles weighs financially.

WBD has yet to see “material cuts” in the volume of advertising, said Ryan Gould and Bobby Voltaggio, president of advertising sales in the US.

“The sentiment in the market doesn’t really show what we are seeing right now, but we know that clearly the state of future impacts is unknown,” Voltaggio said.

Jeff Collins, president of AD Sales at Fox, repeated his colleagues.

“Obviously you need to have a plan, and they all have a plan,” Collins said. “But we haven’t seen anyone really looking for a pullback until there’s some concrete impact on their business.”

Disney’s Ferro said her team has spent additional time with advertising partners over the last few months discussing various scenarios where tariffs could affect different categories and products. She added that the best marketing director she is talking about works in what she calls the “war room.”

Ferro recounted a specific conversation with a mobile phone company (which she refused to identify) that emphasized the volatility of her trade policy. That weekend, the Trump administration exempted smartphones and other devices from the tariff scheme.

“So that transaction that disappeared on Monday, on Friday, has become orderly,” Ferro said.

“What’s going on literally in real time? There are so many scenarios they’re going through, and I think there are so many in real time,” Ferro said.

Data firm Emarketer estimates that traditional television ad spending during advances will fall between $2.78 billion and $4.12 billion, depending on the severity of the impact of tariffs. However, while streaming spending in these annual discussions is more stable, Emarketer expects growth in that category to be $1 billion. Media companies sell advertisements for both platforms together.

This gives advertisers the advantage when negotiating pricing, except for sports content. Jonathan Gudai, CEO of digital advertising platform Adomni, believes that companies affected by the loss of Pay-TV subscribers are willing to lower prices.

Advertising data company Edo said it has already been pulled back to estimated advertising spending in automobiles and various retail and consumer sectors since its announcement on Trump’s tariffs.

At the same time, concerns from consumers about immediate rising prices have been translated into higher advertising effectiveness. For example, Home Appliance brands reduced their estimated spend by 30%, while consumer responsiveness to advertising increased by 77%.

Media executives have largely refused to discuss pricing, but all data from companies like EDO is key to debating with advertisers.

“Advertisers say they want to buy a very specific audience.” EDO CEO Kevin Krim said: “You have to look in great detail that you will be willing to pay.”

All of these factors become repeated questions in the advertising market. Is annual advances still important?

“I’ve been in business for about 30 years, and that issue requires that you get an upfront payment (presentation) every year,” said Collins of Fox.

The answer to this year’s traditional media giant is even more than ever.

“That’s the last moment you want to stop advertising because, as you know, you have to try hard, not just surrender,” Ed’s Krim said.

Krim added that the need for flexibility makes real-time data even more important. “You can’t use last year’s model.”

He also said that it could further shift the AD dollar as it could lead media companies to a more “a level playing field” along with digital companies like Meta, Amazon and Google. Despite being a giant in the advertising space, these tech companies are beginning to reveal the beginning of a rift in the advertising business.

The annual presentation can also close out purchases of some of your consistent favorite categories.

NBCuniversal’s Reduto told CNBC that locking up any future ads “has an opportunity to ensure that advertisers have access to what really drives sales.”

Earlier this year, Mark Marshall, chairman of NBCuniversal’s Global Advertising and Partnership, said in a letter mapping slates from upcoming large sporting events, including the Super Bowl, the Olympics and the World Cup, as evidence of the practicality of advance payments.

“From an advertiser perspective, I think they still place importance on the ability to lock the positions of the franchise they want to own, lock them up at the desired pricing and give them flexibility,” Collins said.

Disclosure: Comcast’s NBCuniversal is the parent company of CNBC.