Madison & Wall’s December 2025 U.S. Ad Forecast captures a market doing two things at once: delivering some of the strongest growth of the past decade, while quietly absorbing a growing set of risks that could reshape spending decisions in the year ahead.
After another standout quarter in 3Q25, the firm raised its outlook for the remainder of 2025 and nudged expectations higher for early 2026, as well. The headline story is simple: advertising is still growing faster than the economy, but the conditions supporting that outperformance are becoming more fragile.
Check out our recent webinar with Measured’s Will Post and Madison & Wall 's Brian Wieser and Luke Stillman as they unpack the forces defining media performance in 2026. To request a full copy of the report, please reach out to Madison & Wall directly here.
2025 Ends Stronger Than Expected
The third quarter of 2025 exceeded even optimistic expectations. U.S. ad revenues grew 13% year-over-year, excluding political spend, marking the fastest pace since the late stages of the post-Covid rebound. Every quarter of 2025 has now posted double-digit growth, a rare streak outside of recovery periods.
That strength prompted Madison & Wall to lift their full-year 2025 forecast to 11% growth. They also raised expectations for the fourth quarter, now projecting 10% growth ex-political, marking a modest step down from Q3, but still historically robust.
Digital channels were the clear engine behind the surge. Commerce media once again led the market, expanding at a mid-20s pace as retailers’ first-party data, closed-loop measurement, and pay-to-play dynamics continued to attract endemic brand dollars. Social media followed closely, buoyed by advertiser adoption of AI-driven buying products that emphasize performance and efficiency. Search also delivered steady double-digit growth, showing little sign that AI-powered search interfaces are meaningfully disrupting monetization.
Together, commerce, social, and search pushed digital advertising growth above 20% and lifted digital’s share of total ad spend to roughly 72%.
Outside those core channels, results were more mixed. Out-of-home and YouTube posted modest gains, while audio and publishing were largely flat. Linear television continued to decline on an ex-political basis, reflecting both last year’s Olympic comparison and the ongoing migration of video budgets toward streaming.
A Stable Economy With Blurred Visibility
On the macro side, the picture is steady but imperfectly visible. A prolonged government shutdown delayed key economic data during Q3, adding uncertainty rather than clarity. Still, forward-looking indicators suggest modest, stable growth. Consensus forecasts point to real GDP growth near 2% in 2026, inflation slightly above target, and nominal economic expansion in the mid-single digits.
While the historical relationship between GDP and advertising has weakened, Madison & Wall argues that nominal growth still acts as a directional tailwind. So far, major policy changes, from tariffs to immigration rules, have not translated into a clear slowdown in ad spending, even as they raise longer-term concerns.
2026: Growth Continues, But Slows
Looking ahead, Madison & Wall expects advertising momentum to carry into early 2026 before decelerating as risks accumulate. Their updated forecast calls for 6.6% growth next year excluding political spend, down from 2025’s pace but still healthy by historical standards.
That number reflects a probability-weighted blend of scenarios. In the base case, continued resilience drives high-single-digit growth. A more cautious scenario assumes tariffs and regulatory changes begin to weigh on spending, while a downside case incorporates the possibility of additional “stagflationary” shocks. Growth is also expected to be front-loaded, supported by the Winter Olympics in Milan before easing through the year.
Digital formats remain the growth leader in every scenario. Commerce, social, and search are all expected to expand meaningfully again in 2026, while the open internet, spanning independent publishers, open CTV, and digital audio, continues to lag Walled Gardens overall.
Within the open internet, however, programmatic buying plays an increasingly central role. Programmatic transactions are expected to grow faster than the segment as a whole and account for nearly three-quarters of open-internet ad revenue next year, fueled by strong gains in programmatic CTV, digital audio, and digital out-of-home.
Television remains under pressure. Total TV ad revenue is expected to decline slightly excluding political spend, even as CTV continues to gain share within the category.
Structural Forces Reshaping Budgets
Beyond cyclical dynamics, Madison & Wall highlight three structural shifts shaping how marketers allocate budgets:
- Price and performance increasingly outweigh transparency, pushing spend toward AI-driven, closed-loop platforms.
- Marketers are prioritizing working media over services, favoring platforms that bundle creative, optimization, and execution directly into media costs.
- Direct relationships between large advertisers and major media owners are accelerating, further disintermediating agencies and pressuring mid-tier sellers to adapt.
AI plays a central, but uneven, role in these changes. While search and commerce remain structurally resilient, AI poses a more existential challenge for open-internet content owners. Operationally, automated buying systems are already reshaping how dollars flow, capturing a disproportionate share of incremental growth by emphasizing simplicity and outcomes over control.
For a deeper dive, watch the full webinar as Measured’s Will Post sits down with Madison & Wall's Brian Wieser and Luke Stillman to unpack the forces defining media performance in 2026. To request a full copy of the report, please reach out to Madison & Wall directly here.