When additional external costs, like tariffs, enter the social and professional atmosphere as intensely as they have in the past couple of months, and there is an expectation of increased costs of doing business, marketing and advertising budgets are often one of the first costs to be scrutinized. Costs associated with marketing tend to have delayed returns and aren’t necessarily a cost of doing business compared to costs associated with operations, materials, and labor. So, regardless of how significant the marketing returns are, marketing budgets are often the first major expense to be squeezed in a more unpredictable economic environment.
I’m not going to make a disingenuous argument here that you shouldn’t squeeze your marketing budget at all in response to tariffs, just because I happen to make a living running advertising campaigns. Tariffs are intentional short- to medium-term costs, and it only makes sense to leverage your longer-term and non-essential costs associated with marketing efforts. However, I am going to suggest avoiding turning off marketing efforts entirely. So, how should you relate tariffs to PPC?
Factor Tariffs Into Your Costs
First, tariffs are increased costs attached to the bottom line of product sales involving international imports, which means tariffs should be factored into your costs as part of your Cost of Goods Sold. Notably, this happens before your profit margin and net profit are calculated, so those tariffs have a direct effect on your profit margin.
Consider Your ROAS
Further down the marketing stream, a very important metric is directly influenced by profit margin, your target Return on Ad Spend (ROAS). Which means your ROAS is directly influenced by tariffs. This is the most important factor to consider when examining the effects of tariffs on your e-commerce marketing efforts, like search and social advertising.
With these things in mind, here are the next steps I suggest taking when managing ad campaigns with tariffs top of mind:
Try to Avoid Pausing Campaigns
Why shouldn’t you turn off your Google ad spend or account management entirely? Because the sun will come up tomorrow. You will have more business to do, and you will want to have your advertising campaigns built and maintained in a way that can be adjusted to account for a changing market. Google and Microsoft campaigns tend to behave very differently after being paused, especially for a period of time longer than two weeks. Those campaigns very rarely reach their former performance watermarks once they’re reactivated, and at that point, the only thing to do is reset the algorithm entirely and hope that Google evaluates this new campaign better. Not ideal.
Fortunately, there is a way to account for this. Rather than pausing the campaign, sending a signal to the platform that this is an inconsistent revenue stream, simply reduce the budget to whatever level suits your new business environment. Even if that is as low as $5/day per campaign, that still avoids the dreaded pause signal to the algorithm.
Let Competitors React First
Lastly, it’s important to note that unless your business model is particularly vulnerable to tariffs compared to your competitors, the tariff effects you are dealing with are likely on your competitors’ minds as well. It’s often beneficial to let competitors make the first move in the PPC sphere, as your advertising costs may benefit from decreasing competition, which helps offset tariff costs.
Tariffs will inevitably affect your advertising costs, but our suggestion is to take those changes slowly, allow the market to adjust itself, and then adapt. The algorithms we use in today’s PPC sphere are powerful tools, but they are momentum-based, so knee-jerk reactions can do significant, sometimes unnecessary, damage.
Adjust Campaign Strategy
If, after all that, you find your ROAS must shift, or your budget must change to account for the new environment, you should certainly make that change. Gradual shifts at a rate of 20% every two weeks will keep campaign algorithms healthy. If your campaigns are still running manual bids, feel free to adjust as needed to get the ad strategy in line immediately.
In times of economic uncertainty, like those triggered by new tariffs, it’s crucial to strike a careful balance between protecting your bottom line and preserving the momentum of your marketing efforts. While tightening budgets is often necessary, maintaining a minimal but consistent advertising presence ensures your campaigns stay healthy and your brand remains visible when the market stabilizes.
By factoring tariffs into your costs, adjusting your ROAS expectations, and making gradual, thoughtful campaign adjustments, you can navigate these challenges without sacrificing long-term growth. Stay strategic, stay patient, and let your smarter moves today set you up for greater success tomorrow.
