The global economy is shifting fast—and marketing leaders are about to feel it in the budget.
- Tariffs are raising COGS and slashing marketing budgets.
- Retailers are forced to choose between price hikes or profit hits.
- Performance marketing is the only lever left that drives measurable growth.
Following the latest round of tariff hikes, brands importing consumer goods, electronics, auto parts, and even raw materials are facing steep increases in cost of goods sold. New policies have pushed the average tariff rate on U.S. imports to over 25%, with Chinese goods now taxed at a staggering 125%. Even trusted partners like Mexico and Canada are seeing renewed pressure for goods that fall outside trade agreements.
This isn’t just about trade policy. It’s about profitability and priority. When your margins shrink overnight, marketing can no longer afford to be driven by vanity metrics, bloated creative spend, or long-shot brand campaigns. Every dollar has to work—and prove it.
The Real Cost of Tariffs: More Than Just Imports
Tariffs aren’t just squeezing online brands. Brick-and-mortar retailers are feeling it too—especially those in home improvement, electronics, and specialty goods. If you’re a retailer carrying imported inventory, the impact is immediate: higher COGS, narrower margins, and harder choices.
Retailers have two options: raise prices (and risk foot traffic declines), or eat the costs (and gut profitability). Neither feels great—and both create pressure on the marketing line to make up the difference.
Retailers with large physical footprints, multi-category assortments, or higher exposure to goods sourced from China are particularly vulnerable. And in most cases, the margin headwind is too large to ignore—some retailers are seeing a potential hit to 100% or more of their EBIT if mitigation strategies fail.
Marketing Can’t Outspend Tariffs. It Has to Outperform Them.
With COGS rising and price elasticity becoming more fragile, marketing has to stretch further. Every channel, campaign, and tactic has to be held to a new standard: performance.
If you can’t show that $1 in media spend reliably returns $1.20 in revenue, that dollar is gone.
That’s the new benchmark. It’s not about how visible your campaign is or how many people liked the ad—it’s about what drove action. In today’s economy, marketing that doesn’t move product is marketing that gets cut.
Old Tactics Don’t Survive New Pressure
Marketers are waking up to a tough truth: CPM and reach don’t pay the bills. Conversions do.
The days of planning long brand campaigns with no direct accountability are gone. Marketing is now in the business of outcomes. That means tighter tracking, faster pivots, and closer alignment with financial KPIs. If it doesn’t tie to revenue, customer acquisition, or margin lift—it’s not worth it.
What Smart Brands Are Doing Right Now
We’re working with brands that are adjusting in real time. Here’s how the smartest teams are responding to this shift:
- ◖ Auditing media mix weekly to ensure every dollar is driving return
- ◖ Cutting underperforming placements and channels mid-flight
- ◖ Refining creative based on in-market performance, not gut feel
- ◖ Reallocating spend cross-channel instantly based on results
- Auditing media mix weekly to ensure every dollar is driving return
- Cutting underperforming placements and channels mid-flight
- Refining creative based on in-market performance, not gut feel
- Reallocating spend cross-channel instantly based on results
They’re not necessarily spending more. They’re just getting more from what they spend.
Why Modifly Is Built for This Era
At Modifly, we’ve always believed performance isn’t a service line—it’s a discipline. And we’ve built our model accordingly.
We buy media natively and optimize every day. Our creative is designed for conversion, tested fast, and constantly improved. Our dashboards report business metrics, not just marketing ones. And we stay fluid across platforms so we can follow what works, not what’s locked into a plan.
While others are still making recap decks, we’re reforecasting next month’s strategy based on this week’s data.
Bottom Line: Pressure Creates Clarity
Tariffs are forcing hard decisions—but they’re also creating clarity.
They’re pushing brands and retailers to let go of bloated, slow-moving marketing strategies and replace them with performance models that deliver. Whether you sell diapers or SUVs, online or in-store, the message is the same: performance is your last line of defense.
Marketing can’t be the most expensive line on your P&L—it has to be the smartest.
In the age of tariffs, the only strategy that makes sense is the one that drives results
