Middle East conflict puts Indian businesses on watch; several ad campaigns put on hold

After a sluggish FY25 and a sharp market correction, India’s media and advertising sector is facing fresh uncertainty as tensions escalate across the Middle East region. 

The intensifying US-Israel military action against Iran — resulting in the killing of Iranian Supreme Leader Ayatollah Ali Khamenei and other senior leadership — followed by Iran’s retaliatory strikes across parts of the region, has  led to closure of air space across key global hubs, including the UAE, Oman, Bahrain and Saudi Arabia leaving scores of travellers stranded across Gulf nations. 

Meanwhile, crude oil prices — often the earliest indicator of economic stress — have risen nearly 10 per cent within 48 hours, triggering caution among businesses and marketers alike.

Amid the uncertainty, several advertisers have asked agencies to temporarily pause ongoing and upcoming campaigns. 

“All my advertisers, primarily FMCG and the fashion category, have put their campaigns on hold,” Shradha Agarwal, Co-founder and CEO of Grapes, told e4m.

“The attacks started Saturday only and the stress that we are facing right now is the fact that no client wants to talk about it right now. All our projects have gone on hold. And again, because it was a weekend, let's see what happens on Monday,” she said.

Airlines, travel companies, logistics firms and many other large advertisers are considering precautionary measures in the coming days as consumer sentiment softens amid conflict-related news dominating media platforms.

Digital and television campaigns appear to be the first to see adjustments, even as heightened news consumption has driven higher engagement for news publishers, ad executives told e4m. 

Since several Indian agencies operate in the Middle East as well, the impact of the conflict is likely to be more. 

The evolving conflict has also heightened investor caution, with equities, gold and commodity markets expected to react when trading resumes today. 

Indian advertisers and businesses are closely monitoring potential economic implications, though industry leaders emphasise that it remains too early to expect any material disruption to advertising investments. 

FMCG majors with significant exposure to Gulf markets declined to comment.

Agencies Brace for Uncertainty

Geopolitical volatility typically prompts brands to adopt a pause-and-review approach.

Sayak Mukherjee, Founder of Brandwizz Communications and Creator Cult Media, said, “We may see deferment of large discretionary or brand-led campaigns, with tighter scrutiny on ROI, especially in categories sensitive to global supply chains, fuel prices, or currency movement.”

He noted that the January–March quarter is traditionally a softer spending period due to financial year closures and budget recalibration, suggesting that any moderation in advertising activity may partly reflect seasonal trends rather than geopolitical developments alone.

“We might see brands pulling back on big spends if oil prices rise. Even if active large-scale air attacks reduce, blockades in the Arabian Gulf and Hormuz Strait can impact global trade and oil prices massively. FMCG and Auto companies could cut budgets to protect their margins,” said Prasanna Iyer, CEO and Founder at Rezilient Digital.

He added, “Marketing money will likely shift from big ads to digital performance. Even festive plans might become more tactical. It looks like a period where everyone will wait and watch before spending.”

The scale and nature of Iran’s next response remain uncertain, with further escalation potentially affecting energy security, investor sentiment and business confidence.

India’s dependence on Gulf crude — with over half of imports moving through the Strait of Hormuz — makes oil prices the primary transmission channel through which geopolitical developments could impact domestic industries. However, advertising budgets historically react only to sustained economic stress rather than short-term global shocks.

“At this point, brands are observing developments. There is no visible pullback in advertising activity as it was a weekend. Let's wait for Monday,” said a senior media agency executive, requesting anonymity.

With most marketing allocations locked into quarterly cycles, near-term advertising activity remains largely insulated.

Aviation, Logistics Under Early Watch

If crude volatility persists, fuel-intensive sectors such as aviation and logistics could emerge as early indicators of advertiser sentiment. Airlines remain significant contributors across television, digital and airport media inventories.

"Besides, crude oil prices are a key driver of inflation, which in turn influences discretionary consumer spending. However, any recalibration is more likely to involve optimisation of campaign timing rather than immediate outright spending cuts," said a senior executive.

Impact Likely to Be Gradual

Historically, advertising expenditure tracks broader business confidence with a lag. Rising input costs, inflationary pressure or consumption slowdown would need to persist before materially influencing marketing allocations.

“Even during global uncertainties, advertising doesn’t slow overnight. Any impact typically plays out over multiple quarters,” said a broadcaster executive.

Media planners indicated that advertising pipelines remain stable for now, with performance-led digital spends expected to stay resilient. Increased news consumption during geopolitical developments may also support audience engagement across platforms.

Some executives underline that India’s domestic demand-led economy provides relative insulation compared with export-dependent markets.

“Unless disruptions materially impact oil prices or trade flows over an extended period, advertising growth trajectories are unlikely to change meaningfully,” said an agency CFO.