In a time when global economies are balancing on a razor’s edge, political decisions can send ripples – if not shockwaves – through industries far removed from government chambers. One such tremor came in the form of US President Donald Trump’s announcement on “reciprocal tariffs.”
The Executive Chairman of S4 Capital, Sir Martin Sorrell is no stranger to the seismic shifts in the global market. Speaking about the Donald Trump’s tariff policy, he outlined how a decision made in the Rose Garden in White House could very well reshape the very foundation of modern advertising.
Sorrell said, “It’s not a question about the impact on advertising. It’s the impact on the world and the era of free trade. The world may have changed on Wednesday night at 9pm in the Rose Garden in the White House.”
Sorrell’s message is clear: trade wars don’t happen in isolation. They infiltrate the economic bloodstream and affect every organ of the global body – including advertising.
“The world’s leading economy has now implemented a different policy in relation to trade. And if that policy is maintained, the Chinese are now imposing a 34% tariff on all imported goods from the US. So we’re on the cusp of a trade war.”
Such a conflict, he argues, could have far-reaching implications. With escalating tariffs and trade tensions, the flow of goods—and therefore the global economy—risks grinding into a slower gear. “I think growth will slow probably… This is important to understand. If the policy continues, growth will be slower.”
But where some see disruption, Sorrell sees adaptation and opportunity. He foresees an industry pivot where businesses, pressed by economic uncertainty, will lean harder into efficiency. This means re-evaluating advertising strategies—not just for cost-saving, but for performance.
“Inflation will be higher. And interest rates will be higher than, as a result, we would have wanted before. In those circumstances, after the initial period of uncertainty, what is going to happen is that clients will want more efficient and effective advertising.”
Sorrell highlighted, “So faster, better, cheaper advertising is going to become even more important. So a disruptor like S4 Capital or Monks becomes more important in that environment.”
Sorrell pointed two primary shifts in client behavior in response to the economic climate. First, a re-evaluation of geographic investment: brands will chase growth, and markets like India may emerge as major winners.
“Firstly, clients will pick their geographies much more carefully. They will look for the growth. So if India is going to grow faster than other economies, that will be to the benefit of India. So I think North America, South America, the Middle East and Asia will benefit. I think Europe, where growth has been slower, will be under the gun.”
Second, and perhaps more transformative, is the role of technology – specifically artificial intelligence (AI)—in shaping the future of advertising. “Technological efficiency and technological implementation, particularly AI, will become more and more important as clients demand faster, better and cheaper work. AI will be implemented even faster.”
“AI will improve the portfolio investment of advertising. AI algorithms will not replace people totally, but will improve their productivity and output. So it will make the allocation of advertising revenues more efficient and more effective.”
Talking about the way AI will help media agencies and clients, Sorrell said, “Technology will reduce any frictions or inefficiencies in the system, I think I’d agree with that.”