McKinsey: AI can rescue martech and $215bn in spend

Advertising and marketing professionals might still be fretting about the AI-driven future, but the technology could finally kick-start the martech revolution, realising its potential and preventing over $215bn worth of spend from going down the plug-hole.

That is the bold conclusion of a new “Rewiring MarTech” report from McKinsey & Company, which warns any such revival will not be simple, as martech will also have to be elevated to the C-suite and anchored on an agentic AI “orchestration layer”.

The report reckons that much of martech’s spend – projected to hit $215bn by 2027 – fails to deliver due to fragmented stacks, data silos and an inability to measure return on investment. In fact, not one of the senior CMOs interviewed for this report was able to quantify the ROI of their martech stack.

McKinsey partner Robert Tas said: “Martech has the opportunity for revival with AI. But only if CMOs eradicate complex stacks and anchor it as a strategic priority in the C-suite.

“Only then can brands activate AI-powered customer journeys to realise the potential jump in conversion that AI promises, and see this growth engine in action.”

The report highlights a number of fundamental issues that would speed up the martech revival.

A revenue-accountable chief experience officer should lead the transformation: A CXO could measure the total cost of ownership, drive cross-functional adoption, and link investments directly to business outcomes.

Stacks should be simplified; complexity has increased by 1,400% in the past decade: Martech tools have grown from 1,000 to 15,000 solutions in a decade, with many organisations underestimating the number of tools they use by up to 10 times. With over 3,000 AI-native tools added in 2024, organisations are now forced to rethink the fundamentals of their tech stack.

Spend should be scrutinised: Over the next five years, 80% of CMOs plan to increase their martech investment, with more than a quarter expect it to boost it by up to 25% in the next three to five years. However, that investment will be wasted if it adds layers of complexity instead of focusing on AI-powered agents that can automate integration, surface redundancies, and intelligently coordinate workflows.

Organisations need to enhance their martech maturity: Over half (52%) of businesses claim to be “operational” in their martech maturity and 13% “developing” and just 35% reported transformational capabilities – the ability to execute advanced omnichannel personalisation, integrated data platforms, and automated workflows.

Training, change management, and capability building should be prioritised: Some 34% of buyers cite under-skilled teams as a key reason for underperformance, with many businesses underinvesting in training, change management, and capability development.

Complexity, choice, and silos that stifle growth must be eradicated: Nearly half (47%) of decision-makers say stack complexity, as well as system and data integration challenges are key blockers that prevent (or could prevent) them from getting value from their martech tools.

Customer journeys need to be reimagined to realise the 20-40% boosts in conversions AI offers: Without foundational fixes to data, governance, and integration, AI risks amplifying existing dysfunction at scale.

McKinsey senior partner Kelsey Robinson concluded: “We need to apply the same discipline and focus that has long guided media investment, to martech.

“By connecting spend directly to outcomes like revenue growth, conversion, and engagement, organisations can unlock far greater value. But it requires a rethink of the tech, reskilling of talent and C-suite sponsorship. Only then we can turn martech from a cost-centre to a growth driver.”

McKinsey: AI can rescue martech and $215bn in spend

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