Awareness and Conversion Account for 62.6% of Total Media Spend, Gartner Finds

Why It Matters

The reallocation toward awareness and conversion signals a short‑term growth focus that could erode long‑term customer value, while rising labor costs highlight the need for skilled talent to realize AI benefits.

Key Takeaways

• Awareness and conversion now 62.6% of total media spend.
• Digital media exceeds two‑thirds of spend, up 18% since 2024.
• Loyalty spend falls to under 15%, a 29% decline.
• AI‑mature firms allocate more to loyalty, less to digital channels.
• Labor share rises to 24.5% of marketing budgets in 2026.

Pulse Analysis

Gartner’s latest research shows a decisive pivot in marketing budgets, with awareness and conversion now consuming roughly two‑thirds of total spend. The surge in digital media—up 18% since 2024—reflects CMOs’ confidence that AI‑driven personalization can accelerate customer acquisition. As AI tools become more accessible, marketers are reallocating funds from traditional offline channels to programmatic platforms that promise measurable ROI, reshaping the overall media mix for 2026.

While the focus on acquisition is clear, the decline in loyalty and retention spending—down 29% to less than 15% of the budget—raises strategic concerns. Companies that over‑invest in short‑term, AI‑optimizable touchpoints risk neglecting the long‑term relationships that sustain revenue. Gartner notes that AI‑mature firms counter this trend by preserving a larger share of budget for loyalty initiatives, suggesting a more balanced approach that leverages AI without sacrificing brand equity.

The human element remains critical. Labor’s share of marketing budgets climbed to 24.5% in 2026, underscoring the growing demand for skilled talent to manage AI tools, data governance, and strategic execution. With 70% of CMOs reporting immature internal processes and only 30% feeling AI‑ready, the industry faces a talent gap that could limit the promised efficiency gains. Investing in training, governance frameworks, and cross‑functional teams will be essential for turning AI capabilities into sustainable business outcomes.