What the survey found
Gartner surveyed 401 CMOs across North America, the UK, and Europe between January and March 2026. The number that should get your attention: awareness and conversion now account for 62.6% of total media spend, up more than 10 percentage points since 2024.
At the same time, loyalty and retention spend has dropped 29% and now sits below 15% of total media budgets.
Digital media is absorbing the gains, now representing more than two-thirds of total media investment, up 18% since 2024. CMOs are citing AI optimization as the reason: Meta and Google are better at driving cold acquisition at scale, so that's where the money is going.
Why the shift makes sense on paper
The logic isn't wrong in isolation. Meta Advantage+ and Google PMax have gotten meaningfully better at finding new buyers at acceptable CPAs. AI-optimized acquisition campaigns generate the conversion volume that feeds platform learning faster than retention campaigns do. The algorithm rewards what you put into it.
So CMOs are following the incentives. They're concentrating spend on what's measurable, what reports well in dashboards, and what platform AI is actively optimizing. Retention programs — email, loyalty offers, repeat-purchase flows — are harder to attribute, slower to report, and don't generate the kind of data the big platforms can run their experiments on.
The rationalization writes itself.
The problem
CPMs aren't cooperating.
Google Ads CPCs hit a 5-year high this year, up 12% across most industries year over year. Meta CPMs rose through the World Cup window and haven't fully come back. AI Mode is pulling organic clicks away from results pages, which increases reliance on paid. On the exact channels where CMOs are concentrating acquisition spend, costs per new customer have risen significantly over two years.
When acquisition costs are rising and you've cut the programs that keep customers coming back, the unit economics start to break. A customer who cost $80 to acquire in 2024 might cost $110 now. If your retention is weak, you need another one — and pay $110 again.
At current acquisition cost levels, retention isn't a nice-to-have. It's the variable that determines whether your model is profitable.
The 70% problem
Here's the part of the Gartner survey that doesn't get enough attention: 70% of CMOs say their internal processes are not mature enough to effectively implement and scale AI. Only 30% report mature or fully developed AI capabilities.
So the reallocation is happening — cut retention, fund AI-driven acquisition — but the majority of organizations doing it can't yet execute the AI side well enough to get the efficiency premium they're counting on.
Labor's share of marketing budgets rising from 21.9% to 24.5% tells the same story. Companies are hiring people to manage the AI they bought, which means the cost savings expected from automation haven't arrived. AI spend and headcount are both up simultaneously.
What to check in your account
Pull your Q2 media mix. What percentage of spend is going toward cold acquisition vs. retention and loyalty? If you're below 15% on retention, you're at the floor Gartner found, betting that acquisition costs will stabilize or AI will deliver efficiency gains you haven't seen yet.
The existing-customer economics are compelling enough to act on regardless. Someone who already bought from you converts at 3–5x the rate of a cold audience. Reaching them via email, SMS, or paid retargeting costs a fraction of what finding a new customer costs. That lever is being systematically defunded across the industry.
You don't have to reverse the whole allocation. Adding 5 percentage points to retention spend — pulled from mid-funnel awareness campaigns that are hardest to attribute directly — is probably the highest-ROI budget move available right now for most e-commerce accounts.
If you want to see where your retention vs. acquisition ratio lands against what your ROAS actually suggests, the free audit at Gromerce surfaces that in three minutes.
The market is paying record CPMs to find new customers. The brands that win aren't the ones spending the most to acquire — they're the ones losing the fewest once acquired.
Sources: Gartner, Marketing Dive, Martech, June 2026
