How Tariffs Could Impact Advertising Budgets
As generative AI is growing and developing, more people are using it for search and placing trust in the results. According to new research from SEO platform BrightEdge—released in conjunction with its new AI Catalyst tracking platform—almost every AI search engine has seen huge increases in traffic in just the last month. In March alone, xAI's Grok saw an explosion of 266% more users, while 166% more users asked Anthropic's Claude to search for them. More than 500 million people are using ChatGPT at least once a week, and many people are actually using two or three different AI platforms for search weekly. And nearly seven out of 10 consumers are trusting the answers they get from generative AI.
This changes the calculus of SEO for marketers quite a lot, said Jim Yu, BrightEdge founder and CEO.
'There's this notion of am I even visible? Am I even on the list that the AI is suggesting?' Yu said in an interview. 'And then, what is the sentiment that the AI has around my product? Is it positive, is it neutral, is it negative?'
While brands want AI to pull positive information, BrightEdge's research found that only about one in three brand mentions is positive. The vast majority are neutral—straightforward information with no evaluating language, how-to information, or technical specifications. Only 3% of the mentions are negative. Yu said that AI engines are now searching for information to match queries in real time, working to be as fact-based as possible, and striving to inform the user. He described today's AI search engines as 'an uber researcher that goes out and does all this, and comes back with the summary.'
Instead of being concerned with keywords, marketers wanting to do well with AI search need to understand the types of conversations people are having with AI about their brands, Yu said. Knowing what they want to know and the way that they are asking it can help brands understand what kind of information to put out on their websites. A deeper understanding of what different AI engines are looking at can also be helpful, ensuring that the most important information can surface on any platform. But Yu also cautioned that because AI search engines speed through your site, messy code can make for messy results, so it's more important now than ever to ensure the underlying code for your site is clean.
'You've got to have this mindset of optimize once and [know] how you make sure you're winning everywhere,' Yu said.
AI is also revolutionizing how companies do marketing. Home improvement retailer Lowe's has been using it for consumer- and employee-facing platforms that help redesign rooms and answer home repair questions. I talked to CMO Jennifer Wilson about the retailer's strategy, and an excerpt from our conversation is later in this newsletter.
It's spring break season and we'll be taking next week off from Forbes CMO. We'll be back on Wednesday, April 23.
Shipping containers at the Port of Long Beach in California.
FREDERIC J. BROWN/AFP via Getty Images
As President Donald Trump's sweeping worldwide tariffs go into effect today, companies are preparing to pay more for products and components that are imported. Some of those costs will be passed on to consumers, but some will be internalized by companies—and many fear it will take a bite out of marketing dollars. A study last month from the Interactive Advertising Bureau found that 94% of advertisers are worried about the impact tariffs will have on ad spending. More than one in five expected an 11% to 20% drop, and 60% anticipate budget cuts of 6% to 10%. Advisory firm Madison and Wall cut its projection for U.S. advertising revenue growth this year to 3.6%, down from 4.5% predicted in December.
The timing of tariffs is especially bad considering TV Upfronts and NewFronts are scheduled to take place in a month. AdAge reports that media sellers are actively talking to buyers, wanting to know more about client budgets and commitments—but the client side of the conversation is silent. 'I have never experienced a phenomenon with such a big thing in the news and so little [communication],' an anonymous buyer told AdAge.
Some marketers are taking a more tactical approach, writes Forbes contributor Kiri Masters. There are some that are cutting down on pay-per-click advertising on Amazon. Others are prioritizing efficiency over growth, planning to maintain visibility during this period rather than build their brands. And still others are analyzing campaigns from the SKU level, concentrating on the items that will generate the most efficient returns.
Ford Motor Company has always had an all-American vibe to its products and story. As tariffs scramble the automotive industry, Ford launched a campaign touting its American manufacturing, called 'From America, For America,' writes Forbes contributor Roger Dooley. The campaign also introduces employee-level discounts on all vehicles through June 2. Ford's video ad got a rave review from President Trump on Truth Social. Dooley points out Ford was able to quickly mobilize this campaign because everyone expected the tariff announcement. While the details were unknown, Ford has always been a U.S. vehicle manufacturer and could play that up in a campaign. (It's worth noting, however, that Ford isn't immune to tariffs. Some of its manufacturing takes place in Canada and Mexico, and some of its parts are imported.)
Shoppers at a grocery store in Washington, D.C.
STEFANI REYNOLDS/AFP via Getty Images
Economists and analysts have long been saying that higher consumer prices from tariffs will make consumers less likely to buy things. But what if the impact isn't as profound on the consumer level? Forbes senior contributor Pamela Danziger writes about reports that don't necessarily paint a picture of consumer doom. A study from research firm Collage found that consumers are likely to apply the same strategies they used as high inflation gripped prices after the Covid-19 pandemic. More than seven in 10 are already adjusting their behavior, switching to less expensive brands or retailers, buying in bulk and changing their budgets to account for higher prices. However, more changes may be made when tariffs hit home; almost half of respondents believe they're already seeing tariffs reflected in prices.
The National Retail Federation isn't expecting to see many changes to its growth projections, Danziger writes. For 2025, retail growth predictions of 3.6% or better are holding firm, and while NRF economists are expecting slower growth for the near term, the trade group is expecting for normal growth to return in time.
Lowe's CMO Jennifer Wilson.
Lowe's
In the competitive area of home improvement retail, Lowe's has been doubling down on new uses for AI, creating apps for both customers and employees, and automatically targeting campaigns based on the weather. I talked to Lowe's CMO Jennifer Wilson about the retailer's applications of AI.
This conversation has been edited for length, clarity and continuity. A longer version is available here.
Tell me about how AI tools have evolved at Lowe's, starting with Style Your Space.
Wilson: One of the big insights that came through was that customers have a hard time envisioning their space. That was really the impetus for Style Your Space, which allows customers to upload a photo, and then AI is able to detect and then generate different styles based off of that, then serve up personalized product recommendations. That was our first foray into a more consumer-facing AI product.
As we staged for what is now [informational chatbot] Mylow, we first went into a beta test with our associates. We wanted to get feedback with our associates, understanding how helpful was the tool? Where did we need to make tweaks? How did they feel that this was best arming them?
Style Your Space has been out for a while. What kind of a reaction have you gotten?
Our engagement levels continue to grow. We have heard that consumers love that the product that we're serving up they can buy in real time. We've been pleased with some of the early sales results as well.
For us, our primary KPI is engagement. A significant amount of app users who are coming in and finding the tool are spending more time with that product than what we'd anticipated. It's almost the way that consumers interact with Pinterest.
I think that there's this notion of coming into an experience, like Style Your Space, that's a little bit more zen-like than social media. Rather than going down this rabbit hole of reels and getting sucked into what historically would be that social media cycle, we've heard in our research that consumers really want a little bit more of this kind of relaxing space to be able to envision and look at products on their own time. And that tracks as you think about the time that consumers are spending in the tool.
What are the KPIs you're looking at for Mylow?
First and foremost, engagement is really critical for us. The beauty of something like Mylow is that you're helping associates and customers at the same time. You're learning more and more about what is of interest to them so that you can serve up more personalized content in real time to them. And you have these halo effect KPIs, like better SEO value for the site.
What advice would you give to marketers that are trying to figure out how to make AI work for their brand?
My advice would be twofold. One: How is AI in support of your brand ambitions? Are you thinking about what you want your brand to stand for and how AI can help serve that or accelerate that? And then two: How does it impact your customer base? Brand and customer are so deeply connected and the two places that I think about as a CMO of looking at every single day. Will this serve my customer and make their life better? And will this serve our brand and prop it up in the way that we want to be positioned? Look through the lens of how is your brand positioned and what matters most to your customer.
The blockbuster opening of blocky video game-inspired A Minecraft Movie last weekend shattered expectations and showed that it's hip to be square.
$163 million: U.S. gross earnings from opening weekend, making it the year's biggest opening weekend and surpassing that of game-inspired The Super Mario Bros. Movie
88%: Audience review score on Rotten Tomatoes. The critics' score is notably lower, at 48%
'Who the hell saw this coming?': Deadline's reaction to the movie's opening weekend, after projecting it would gross $65 million
Video is vital to growing audience and exposure. Here are seven tips to attract viewers and engagement on your YouTube channel.
No matter what your title is, there are only 24 hours in the day—and ideally you're only spending eight of those working. Stay in control of your schedule with careful time management.
Last weekend, Wayne Gretzky's record for the most career regular season NHL goals was broken by a player who has racked up $60 million in endorsements, licensing and memorabilia throughout his hockey career. Who's the NHL's new all-time top scorer?
A. Marc-Andre Fleury
B. Sidney Crosby
C. Jonathan Quick
D. Alex Ovechkin
See if you got the answer right here.
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