CMOs Face Headwinds Even as Marketing Value and AI Impact Grow

Marketers are increasingly pessimistic about the economy, with sentiment reaching its lowest level since the pandemic in 2020. In response—and facing organizational pressures for returns—marketing activities are contracting, lowering spending and prioritizing existing customers over expansion opportunities.

At the same time, companies are accelerating adoption of artificial intelligence, projecting that AI will account for more than half of all marketing activities within three years. Yet this rapid technological progress is outpacing organizational readiness, with no marketing technology activity currently delivering at its full potential.

These are among the findings of the 35th edition of The CMO Survey, directed by Professor Christine Moorman of Duke University’s Fuqua School of Business and co-sponsored by Deloitte and the American Marketing Association.

The survey was conducted from January 7 to January 29, 2026. It polled 308 marketing leaders at for-profit U.S. companies, 97% of whom are VP-level or higher.

Economic pessimism drives a turn toward the core

More than half of marketers report being less optimistic about the economy than the previous quarter, the highest level of pessimism since mid-2020. This shift is not just sentiment; it is reshaping how companies allocate resources and pursue growth.

Tariffs and broader economic pressures are pushing companies to raise prices with nearly half of companies raising or planning to raise prices this year. While 60 percent of marketers report no impact of tariffs on business investments, the share of firms cutting investments outnumber those increasing them by nearly four to one.

Against this backdrop, and faced with cuts to marketing spending, marketers are focusing on what they can control. Nearly half are prioritizing customer retention over acquisition, and the majority of growth spending is now directed toward selling more to existing customers rather than expanding into new markets.

"Faced with uncertainty, marketers are pulling back toward what they know," Moorman said.

AI adoption surges, but execution lags

AI adoption continues to accelerate at a rapid pace. Usage has more than doubled in two years, with generative AI growing even faster. AI is playing a central role in content creation, personalization, and analytics. Generative Engine Optimization (GEO) is being used by 4 in 10 companies—a notable result for a capability that did not exist in previous surveys. Companies expect AI to power the majority of marketing activities within three years.

Importantly, AI is delivering measurable business impact. Marketers report improvements in sales productivity, customer satisfaction, and reductions in overhead costs.

However, technology adoption is outpacing organizational execution. Across a wide range of marketing technology activities, no capability scores above 5 on a 7-point performance scale, and performance levels have not improved over the past two years.

The limiting factors are organizational: insufficient budgets, integration challenges, limited bandwidth, and talent constraints.

Focusing on this organizational readiness gap, Moorman noted, "Companies will need to ensure that their investments in technology are matched with investments in the capabilities needed to use it effectively."

Capability ambitions outstrip investment

Marketing capabilities—the bundle of skills, know-how, and organizational processes that enable companies to implement marketing activities and adapt to marketplace changes—are widely seen as essential to business success. 

Surprisingly, Moorman noted, despite dramatic changes in marketing technology over the past six years, how companies develop new marketing capabilities has remained nearly unchanged since 2020, with 60+% building them on their own. "It is striking, given how much the requirements of marketing have shifted, particularly the growing centrality of analytics, AI, and technology skills, which might have been expected to push more companies toward partnering or acquiring these capabilities externally,” she said.

And yet, companies are not investing accordingly. Training budgets have declined to 3.8% of marketing spend, and headcount growth has dropped by 50% since last year. This disconnect is evident in the survey’s findings: the most cited capability shortfall is not a missing skill, but a lack of resources—insufficient people, time, and budget to make existing capabilities effective. This challenge is especially acute in areas related to AI, analytics, and marketing technology, where demand for new skills continues to grow. 

Expanding responsibilities, uneven support

Marketing’s role within organizations continues to expand. Leaders are taking on greater responsibility for revenue growth, customer insight, and public relations, and are increasingly present in board-level discussions.

Yet this expanded scope is not matched by stronger organizational alignment. Collaboration with finance remains limited, and the partnership between CMOs and CFOs has improved only marginally in recent years.

At the same time, pressure to demonstrate marketing’s value remains high. In response, marketers are shifting toward short-term impact: more than 70% report prioritizing immediate results over long-term gains, often relying on established strategies rather than new investments.

"Rather than investing in deeper customer insights, most marketers focus on developing stronger performance tracking as the primary way to demonstrate value," Moorman said.

Spending decisions reveal a reactive posture

Marketing budgets have declined to 9.0% of company revenues and 9.6% of overall budgets, with overall spending growth slowing to just 1.7%, the weakest rate in several years.

When financial performance falls short, companies are more likely to cut costs than invest in growth, and marketing is frequently among the first areas to be hit. 

Another disconnect is emerging between strategy and spending. While marketers emphasize the importance of loyalty and retention at times of economic uncertainty, acquisition budgets remain 26% larger than retention budgets—despite retention delivering stronger performance outcomes than acquisition.

"Together, these patterns suggest that marketing spending decisions remain more reactive than strategic," Moorman said.

Growth narrows even as channels expand

While growth strategies reflect a continued focus on the core—existing products and services in existing markets—companies are expanding how they reach customers. More than half have increased the number of channels they use, adding digital, social, retail media, and face-to-face channels in parallel.

"This broad channel expansion stands in contrast to the inward orientation visible in other parts of the survey, and suggests that marketers see the customer interface as a place worth investing even in a cautious environment," Moorman said.

Performance highlights marketing’s long-term value

Despite economic headwinds, company sales growth has edged up, though profit growth has slightly declined, signaling margin pressure.

Customer retention has emerged as the strongest performance driver, outpacing both acquisition and brand value.

"This is a notable reversal of the historical pattern in which acquisition and brand investment tended to lead," Moorman said.

At the same time, the effects of marketing investments are becoming more durable, with impact lasting longer than in prior years—the median duration of marketing impact on customers lengthened to six months, with meaningful shifts toward one year or longer in the impact distribution.

"This finding, along with the retention performance data, suggests that the cumulative value of marketing investments may be greater than short-term measurements capture. This is a relevant consideration given the persistent pressure on marketing leaders to demonstrate immediate financial returns," Moorman said.

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The CMO Survey was founded in 2008 and is the longest-standing survey of marketing leaders worldwide. Find more details, industry breakdowns and past results at https://cmosurvey.org/