Public Enemy’s anthemic Don’t Believe the Hype might be nearly 40 years old but it seems the sentiment could not be more fitting for modern marketers, with a new study exposing a major AI roadblock, as 94% of CMOs are yet to advance their GenAI maturity, due to scattered initiatives, insufficient capabilities, and cautious leadership.
On the plus side, according to McKinsey’s State of Marketing Europe 2026 report, those who have matured their GenAI capabilities have already seen 22% efficiency gains, which they often reinvest in growth and have expectations to reach 28% within two years.
This leaves many European companies on the cusp of an AI reckoning, as frontrunners capitalise on AI’s $463bn productivity potential in marketing.
This drive to exploit AI – such personalisation at scale – could remain stalled by what McKinsey calls “the self-declared prioritisation paradox”.
On one hand, 50% of CMOs rank gen AI-enabled marketing as a top three fastest growing investment area; on the other, GenAI and agentic AI rank towards the bottom of their 2026 priority list – 17th out of 20 marketing priorities.
This disconnect could mean AI initiatives will not scale towards maturity and bottom-line impact but instead remain stuck in pilots.
Meanwhile, branding is reasserting its power. It is cited as the number one priority for 2026, with distinctiveness, clear value proposition, and creativity seen as the competitive currency.
Confidence in marketing also remains strong, with 72% of CMOs planning to increase their budgets relative to sales, despite wider cost-cutting programmes. But, to turn that investment into a real advantage, organisations must fix the attribution problem: only 3% of CMOs can explain more than 50% of their marketing spend through MROI measurement.
The report outlines five key trends shaping Europe’s marketing future:
Gen AI, agentic AI, measurement, and insights will see the highest increases in investment in 2026. Gen AI-enabled marketing is among the top three areas for increased marketing spend in 2026, followed by marketing return on investment (MROI) measurement (42%), and consumer insights (38%). Other leading categories include digital media (36%), product innovation and R&D (28%), and content and creative production (28%).
Brands move to break through ad fatigue with non-classical formats to differentiate. With click-through rates down 50%, brands are evolving how they earn attention. Over the next two years, they plan to expand immersive experiences (+29 points), gamified content (+24), anti-advertising formats (+22), behind-the-scenes storytelling (+20), and shoppable content (+17) to differentiate.
The shift marks a move away from traditional campaigns to interactive, entertainment-driven experiences, blending authenticity and commerce.
AI-driven search is shifting growth from last-click activation to long-term brand trust. Four of CMOs’ top five priorities for 2026 – branding (#1), data privacy (#3), authenticity (#4), and employer branding (#5) – signal a shift from short-term activation towards long-term brand and trust building. As AI-driven search reshapes how people buy, visibility, trust, and credibility are becoming decisive factors in brand preference.
Full-funnel integrated campaigns replace one-off campaigns to balance near-term growth and long-term brand salience. Marketers are moving away from one-off campaigns toward multi-purpose, full-funnel activations that link brand and sales.
In 2025, 71% of CMOs adopted integrated campaigns – up 30 points year-on-year. These activations merge storytelling with conversion; for instance, Coca-Cola evolved its Share a Coke campaign into a full-funnel initiative, spanning awareness to purchase.
Gen AI leaders see the technology’s greatest potential in customer focusing use cases, rather than back-office tasks. Firms classified as GenAI leaders (those with the highest maturity) share a common trait: they are focusing on complex but high potential customer-facing use cases.
Some 80% of GenAI leaders see the highest potential from the technology for personalised content at scale, 60% for media optimisation, 57% for product discovery, and 47% for creative efficiency.
As algorithms handle functional tasks, emotional connection and authenticity will increasingly define brand strength. Here, 62% of CMOs say human expertise remains essential for producing high-quality creative concepts and content.
McKinsey senior partner Jesko Perrey commented: “GenAI is the tip of the spear for marketing. To make inroads organisations need to match their increased GenAI spend with clear attention and attribution. If these don’t come together, CMOs are in danger of a marketing own-goal.
“The true winners will be those who strike the right balance between building their GenAI marketing muscle and rekindling the fundamentals of branding and marketing.”
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