Marketing Budgets Are Flat as a Share of Revenue. Total Ad Spend Grew 13.9%.

The Company-Level Squeeze

Gartner’s 2026 CMO Spend Survey puts marketing at 7.8% of company revenue in 2026, up marginally from 7.7% in 2025². That survey covered 401 CMOs and marketing leaders across North America, Europe and the UK, with the majority at organizations above $1 billion in annual revenue².

The two surveys disagree by more than a full percentage point, and that disagreement is methodological rather than an error in either. Gartner’s panel skews heavily toward billion-dollar enterprises², while The CMO Survey drew on 308 marketing leaders surveyed January 7 to 29, 2026, of whom 97% were VP-level or higher¹. Anyone quoting a single “average marketing budget” figure without naming the panel behind it is quoting an artifact of sampling.

Regional data adds a third reading. Forrester’s Budget Planning Survey, 2025 reported that European marketers invest 9% of revenue in marketing, and that just under half of Asia Pacific respondents planned to invest 7.1% or more of revenue¹⁰.

One split inside Gartner’s data is worth isolating. Organizations Gartner classes as AI-optimized report average marketing budgets of 8.9% of company revenue, above the 7.8% overall average, and they direct 21.3% of marketing budget toward AI against an all-respondent average of 15.3%².

Where the Money Actually Went

The IAB and PwC report is the strongest source in this set because it measures reported revenue rather than modelling or surveying intentions. Its 2025 breakdown shows the money did not spread evenly³.

Social media overtook search. Social reached $117.7 billion, ahead of search at $114.2 billion, having grown 32.6% against search’s 11%³. Display landed at $81.6 billion, up 9.8%. Digital video, which includes CTV, social video, online video and short-form, reached $78 billion, up 25.4%. Commerce media hit $63.4 billion, up 18%. Podcast advertising, the smallest line, reached $2.9 billion, up 17.6%³.

Programmatic buying accounted for $162.4 billion of the total, up 20.5%³. Creator advertising reached $37 billion in 2025 and is projected at $44 billion in 2026³.

Ranking those same formats by growth rather than size reorders them completely, and that reordering is what predicts where next year’s budget goes.

The IAB’s own characterization of the year is that this reflects “a market that has reoriented around performance channels”, where investment concentrates in areas with a direct correlation to business outcomes³.

Concentration Is What Reconciles the Two Numbers

Flat company budgets and a booming ad market are compatible if the money that does get spent is funnelled into fewer places. The forecasting data says exactly that.

WARC’s forecast found that almost 80% of ad spend now flows into retail media, paid search and social platforms, leaving roughly 20% spread across every other channel combined⁷.

The seller side is concentrating in parallel. WPP Media’s This Year Next Year midyear forecast reported that the top three sellers outside China, Alphabet, Meta and Amazon, control 57.6% of the market⁶. It also noted global ad revenue reaching its highest share of GDP since 1999, surpassing the dot-com era’s 2000 peak⁶.

The channels losing share are traditional ones. MAGNA’s forecast had digital platform ad sales at $715 billion, up 8%, against traditional advertising revenue falling 3% to $264 billion⁸. The IAB 2026 Outlook Study, built on insights from more than 200 brands and agency buyers, forecasts linear TV declining 1.7% in 2026 while social media grows 14.6%, connected TV grows 13.8% and commerce media grows 12.1%⁴. dentsu, covering 56 markets, forecasts linear TV at exactly 0.0% growth for 2026, retail media at 12.3%, connected TV at 11.5%, digital video at 8.7%, and search at 3.4%⁵.

Retail media concentration goes further still. EMARKETER projects Amazon’s retail media revenues will exceed $75 billion by 2028, more than $65 billion ahead of the next-largest retail media network¹⁷. It also forecasts US commerce media ad spending reaching $142.07 billion and accounting for 23.9% of all digital ad spending by 2030¹⁸, against the $63.4 billion the IAB measured for 2025³.

The Sellers’ Own Books Say the Same Thing

Quarterly results from the three largest ad sellers confirm the concentration from the revenue side.

Meta reported advertising revenue of $59.36 billion in Q2 2026, up 27% year over year, on total revenue of $60.80 billion, up 28%¹⁵. Amazon reported advertising services revenue of $19.8 billion, up 26% from $15.7 billion in Q2 2025¹⁶. Alphabet reported YouTube ad revenue of $11.06 billion, up from $9.79 billion a year earlier, on total company revenue of $119.8 billion, up 24% from $96.4 billion¹⁴.

The mechanics behind Meta’s growth are unusually visible. Ad impressions across its Family of Apps increased 14% while the average price per ad rose 12%¹⁵, meaning volume and price contributed roughly equally. Family daily active people averaged 3.60 billion in June 2026, up 3%¹⁵, so the impression growth came from more advertising per user rather than materially more users.

Notably, Amazon’s leadership discussed advertising only briefly on its earnings call, focusing instead on AI and AWS, despite the segment growing 26%¹⁶.

Advertisers Are Buying More Volume, Not Pricier Volume

Advertiser-side data separates price inflation from real volume growth. Tinuiti’s Q2 2026 Digital Ads Benchmark Report is built from more than $4 billion in annual ad spend under management¹³, which makes it account-level measurement rather than survey response.

Google Search spending grew nearly 14% year over year in Q2 2026, down from 15% growth in Q2 2025, while average search CPC increased just 1%¹². Almost all of that spend increase was additional clicks, not more expensive ones. Google paid search clicks had risen 14% year over year in Q1 2026¹².

Elsewhere in the same report, Google Shopping spending grew 18%, YouTube spending increased 15% (down from 20% growth a year earlier), Instagram spending rose 17%, and Facebook spending was up 7%¹². Amazon Sponsored Products spending increased 38% year over year, or 23% once adjusted for the Prime Day calendar shift¹², and Amazon DSP spending increased 67%¹³. Reels now account for 35% of all Instagram ad impressions¹³.

Set the Google Search figures against Meta’s. Meta’s growth split roughly evenly between 14% more impressions and 12% higher prices¹⁵, while Google Search delivered nearly 14% more spend at 1% higher CPC¹². Two of the largest channels in the market grew at similar rates through opposite mechanisms.

What Marketers Say They Are Doing Does Not Match What Got Spent

Survey data on marketer intentions contradicts itself depending on who is asked, and diverges from the measured outcome.

Nielsen’s 2025 Annual Marketing Report, based on 1,400 global marketing professionals surveyed February 25 to March 6, 2025, all at manager level or above with annual budgets of at least $1 million, found that over half of global respondents, 54%, were planning to cut ad spending, rising to 60% in Europe⁹.

HubSpot’s 2026 State of Marketing Report, drawing on more than 1,500 global marketers, found the opposite posture: 79.2% expect at least a slight budget increase for 2026, 21.2% expect a significant increase, and only 6% expect decreases, though 73% report their budget receives more scrutiny than in the past¹¹. Forrester found 83% of B2B marketing decision-makers expecting increased investment over the next 12 months, with 37% in the US expecting an increase of 5% or more¹⁰.

HubSpot surveys its own martech audience, which plausibly skews optimistic, and Nielsen’s fieldwork ran a year earlier under different conditions. The measured outcome, 13.9% market growth³, sits closer to the optimistic surveys than to Nielsen’s cut-planning majority.

Stated objectives are also shifting away from acquisition. The IAB Outlook found customer acquisition named as the top objective by 54% of buyers, down 10 points, while focus on repeat purchases nearly doubled to 25% from 13% in 2024⁴. Budgets have not followed that stated shift: The CMO Survey found acquisition budgets remain 26% larger than retention budgets even though nearly half of companies say they are prioritizing retention¹.

Measurement capability is a plausible constraint on all of this. Only 32% of Nielsen’s global respondents say they measure their media spending holistically, falling to 23% in Europe⁹, and measuring ROI was the single most cited challenge in HubSpot’s data at 33%¹¹.

The Forecasters Do Not Agree Either

Five forecasts for 2026 span a range wide enough to change any budget decision built on them.

dentsu forecasts global ad spend growing 5.0% in 2026 to $1.06 trillion, with digital at a 69% share⁵. WPP Media forecasts 8.9% growth to $1.3 trillion, revised upward from the 7.1% it published in December 2025⁶. WARC forecasts 9.1% growth to $1.3 trillion, roughly $150 of advertising per person globally⁷. The IAB projects US ad spend growing 9.5%⁴. MAGNA, forecasting in June 2025, projected global ad sales rising 6.3% to pass $1 trillion for the first time, with the US growing 7.8% to pass $400 billion⁸.

The dispersion is 4.1 percentage points between dentsu’s 5.0% and WARC’s 9.1% for the same global market in the same year⁵,⁷. dentsu’s own framing keeps that in perspective: even its conservative 5.0% outpaces the IMF’s global GDP growth projection of 3.1% for 2026⁵.

Timing explains part of the spread. MAGNA’s June 2025 forecast of $979 billion for 2025 was itself a downgrade of 1.2 percentage points from its December update⁸, and WPP Media revised 2026 upward by 1.8 points between December 2025 and June 2026⁶. These are moving numbers, not fixed ones.

What the Data Supports

Three conclusions hold across the full source set.

Company marketing budgets are close to static, at 9.0% of revenue and declining on The CMO Survey’s measure and 7.8% of revenue on Gartner’s, up a tenth of a point¹,², while the advertising market those budgets buy into grew 13.9% in 2025³. Those facts coexist because spend is concentrating: roughly 80% into three channel groups⁷ and 57.6% into three sellers outside China⁶.

Channel growth rates diverge by a factor of three within a single year, from display’s 9.8% to social’s 32.6%³, so channel-level averages are close to useless for planning.

And the mechanism of growth differs by platform. Google Search grew on click volume at flat pricing, Meta grew on volume and price together¹²,¹⁵. Treating “rising ad costs” as a single market-wide phenomenon is not supported by the data.

One caution on the numbers above. The two headline budget-share figures come from panels that are not comparable, and the 2026 market figures are forecasts with a 4.1-point spread. The only measured actuals in this analysis are the IAB and PwC 2025 results³, the Tinuiti account-level benchmarks¹²,¹³, and the three companies’ reported quarterly revenue¹⁴,¹⁵,¹⁶.