Gen AI and agentic AI are already amplifying the impact of classic marketing growth levers, but our Kara5® analysis shows that only a small group of CMOs are truly leaning in.
Across Europe, marketing organizations are “back to basics”: doubling down on proven drivers of growth such as brand building and stricter budget discipline. Yet our research at Kara5® also reveals a major blind spot. While leaders are rediscovering the value of strong brands and financial rigor, most have been slow to fully embrace the step-change potential of AI and modern marketing technology—leaving many European companies on the verge of an AI reality check.
Our analisys shows that 94% of European marketing organizations still rate their gen AI maturity as low or moderate. They are often constrained by cautious leadership, limited internal capabilities, and fragmented pilot initiatives. By contrast, the 6% of CMOs who describe their company’s use of gen AI as mature are already seeing tangible benefits: on average 22% efficiency gains today, which they often reinvest into growth, and an expectation that those gains will rise to 28% within two years.
European marketing is at an AI crossroads
Despite AI’s potential, CMOs put branding at the very top of their agenda, while ranking gen AI and agentic AI near the bottom.
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€463B – estimated potential for AI to boost marketing productivity
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94% – of European organizations report low or moderate gen AI marketing capabilities
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3 in 4 – CMOs plan to increase their marketing budgets, but only 3% can demonstrate MROI above 50% of marketing spend
At the same time, 50% of CMOs say gen AI-enabled marketing is among their three fastest-growing investment areas. Yet when asked to rank priorities for 2026, gen AI and agentic AI come in at 17th out of 20.
This misalignment between what leaders know is coming and what they are actually prioritizing is at the heart of Europe’s AI gap.
Branding is back at the center
Broader adoption and better execution of gen AI could dramatically amplify the impact of branding efforts—which have clearly reclaimed their primacy. For 2026, marketing leaders put brand building as their number-one priority, seeing distinctiveness, a clear value proposition, and creative excellence as vital to long-term differentiation.
Financial discipline is also high on the agenda. 72% of CMOs plan to increase their marketing budgets relative to sales in 2026, even as pressure grows from boards and CEOs to clearly prove the return on marketing investment.
From the 20 priority topics in our research, three broad themes emerge.
Theme 1: Be Trusted
CMOs are rediscovering that brand is not a nice-to-have—it’s the foundation for resilience and long-term growth. As tools accelerate and channels multiply, the fundamentals matter more. To be trusted, brands need to offer clarity, consistency, and a sense of security, built on both emotional connection and responsible data use.
Four of the top five priorities underline this shift away from short-termism toward long-term brand and trust building:
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Branding (#1) – Long-term brand building is focused on distinctiveness, perceived value, and creativity, with two notable shifts: brand building is becoming more interactive and conversational rather than purely one-way communication, and marketers are moving from isolated brand campaigns to full-funnel programs that link equity building with immediate sales triggers.
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Data privacy (#3) – Strong data governance and privacy are central to brand trust, especially in Europe’s strict regulatory environment. Robust privacy practices are now an integral part of brand equity, not just a compliance box.
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Authenticity (#4) – Brands are expected to live their values with transparency and consistency. Authenticity is increasingly what drives emotional resonance, loyalty, and advocacy.
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Employer branding (#5) – The war for talent is pushing companies to communicate who they are internally and externally. Job seekers expect a clear window into a company’s culture and values—reflected in online reviews, social content, and employee advocacy.
To be trusted, European marketers are investing in brands, values, and privacy as long-term assets, not campaign-by-campaign tactics.
Theme 2: Be Effective
Despite cost-cutting in other areas of the business, Europe’s marketing leaders are relatively optimistic. 72% plan to increase their marketing budgets relative to sales in 2026 (compared with 49% who actually did so last year), while 27% expect to keep budgets flat.
That optimism comes with strings attached. Boards are demanding clearer answers on what marketing delivers. To be effective, CMOs must show that every euro drives measurable, repeatable impact.
Five of the top ten topics named by CMOs relate directly to proving and enhancing marketing’s contribution—and they cluster into two main areas:
Budget management and ROI
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Budget management (#2): Sizing, allocating, and controlling marketing spend more intelligently.
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MROI (#6): Measuring, steering, and maximizing the return on marketing activities.
CMOs are under pressure to ensure that every euro of marketing spend is justified. Smarter budget allocation and robust MROI measurement are crucial for maintaining credibility in the C-suite and securing future investment.
Operational effectiveness and integration
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Integration with sales (#7) and customer experience (#8), plus agile ways of working (#9), are key enablers.
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Tighter integration across marketing, sales, and CX helps companies.
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Deliver a more coherent brand experience across all touchpoints.
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Reduce internal friction and inefficiencies between teams and partners.
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Respond faster to market shifts through agile, cross-functional collaboration.
To be effective, leading organizations treat financial rigor, integration, and agility as core marketing capabilities—not supporting functions.
Theme 3: Be Bold
On paper, gen AI and agentic AI are not among Europe’s top marketing priorities—ranked #17 out of 20. In practice, need for action is high.. To be bold, CMOs must move AI from the margins of their agenda to the core of how marketing works.
Gen AI is already reshaping marketing economics. The small group of leaders who put gen AI in their top five priorities report average efficiency gains of 22%. They are either banking those savings or reinvesting them into further growth initiatives. Those who keep AI at the bottom of the agenda risk falling structurally behind.
The lesson is clear: the challenge is less about vision and more about execution. Many organizations are stuck in pilot mode, running isolated proofs of concept that never scale across channels, markets, or business units.
Four AI-related topics stand out:
Gen AI and AI agents (#17) Executives see strong potential in areas like media optimization, content generation, and personalization at scale—but often lack:
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Solid data foundations
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A clear strategy or operating model
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A plan to drive adoption and change across teams
B2C players tend to focus on customer-facing use cases, while B2B organizations are more likely to confine AI to internal efficiencies.
Data-driven marketing (#10) and martech/adtech (#18) as enablers
Without quality first-party data, consented identities, secure data collaboration environments, and modern measurement, gen AI cannot operate at full potential. Equally, the martech and adtech stack must be able to connect tools and workflows so AI can be deployed consistently across channels and use cases.
Personalization at scale (#12)
AI is radically changing the cost and speed curve of personalization. What was once prohibitively complex—true 1:1 experiences at scale—is becoming realistic:
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Automated generation and adaptation of creative variants
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Modular content and dynamic assembly
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Real-time orchestration of next-best actions, within brand and privacy guardrails
Where action is most urgent
Our research points to four areas where Europe’s marketing leaders see both high importance and high urgency:
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Branding
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Budget management
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MROI
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Gen AI and AI agents
To be bold, CMOs will need to push AI beyond pilots, integrate it into the core of marketing, and close the gap between belief in AI’s potential and the commitment to scale it.
The path forward: Get the basics right, then scale AI boldly
As gen AI increasingly shapes how consumers discover, evaluate, and choose brands, the role of marketing is shifting. Functional benefits are no longer enough; emotional relevance, creativity, and trust become core differentiators.
Our Kara5® analysis shows that Europe’s marketing leaders are trying to balance three imperatives:
- Deepening brand connection and through authenticity, creativity, and trust.
- Proving impact via stronger budget discipline and clearer MROI.
- Unlocking AI’s potential by moving from experiments to scaled, integrated use of gen AI and agentic AI.
Those who manage to combine brand fundamentals, financial rigor, and bold AI adoption will be best placed to lead the next wave of marketing innovation in Europe.
