Gen AI and agentic AI are already accelerating the impact of classic marketing approaches to driving growth, but McKinsey’s State of Marketing Europe 2026 report finds few CMOs are acting boldly
This report is a collaborative effort by Aurélia Bettati, Jerome Königsfeld, Jesko Perrey, Kai Vollhardt, Thomas Bauer, Tjark Freundt, and Victor Fabius, with Caroline Meder, Dominik Müller, and Sarah Sahel, representing views from McKinsey’s Growth, Marketing & Sales Practice.
Europe’s marketing organizations are going back to basics, rediscovering the power of prioritizing proven growth levers such as branding and budget rigor. But our State of Marketing Europe 2026 report finds almost all are failing to embrace the transformative potential of AI and other technologies—and that could leave many European companies on the cusp of an AI reckoning.
Our report reveals 94 percent of European marketing organizations are yet to advance their gen AI maturity, often hampered by cautious leadership, limited know-how, and scattered initiatives. But the 6 percent of marketing executives who describe their company’s use of gen AI as mature are reaping serious rewards: they have already seen 22 percent efficiency gains, which they often reinvest in growth, and expect gains to hit 28 percent within two years.
European companies are on the cusp of an AI reckoning. Despite AI’s potential, CMOs rank branding as their top priority, while ranking gen AI and agentic AI towards the bottom. AI’s potential to drive marketing productivity is $463 billion, but 94 percent of European organizations report low or moderate gen AI marketing capabilities and while three in four CMOs plan to increase marketing budget, but only 3% of CMOs can show MROI of more than 50% of marketing spend.
While 50 percent of CMOs rank gen AI-enabled marketing as a top three fastest growing investment area, in terms of priority for 2026, it was ranked 17th out of 20. More widespread gen AI adoption and execution could accelerate the impact of branding efforts, which have reasserted their power. Branding was cited as the number one priority for 2026 by marketing leaders, who view its ability to drive distinctiveness, embody a clear value proposition, and showcase creativity as critical to building competitive differentiation. While financial rigor was also a priority, 72 percent of CMOs plan to increase their budgets relative to sales in 2026—although they are under pressure to better explain marketing’s ROI.
The below interactive ranks the full list of 20 topics cited as most important by Europe’s marketing leaders (for more on our research, side sidebar, “About our research”).
Three themes emerge from Europe’s marketing leaders
Europe’s marketing executives are focusing on basics within their control as they navigate renewed trade uncertainty, stagnating economies in major European markets, and declining economic and consumer sentiment indices across the European Union. That makes sense: volatility and uncertainty affect not only companies but also consumers, whose desire for stability and belonging draws them to strong, reliable brands that drive trust and affiliation.
From the 20 priority topics, the following three themes emerged.
CMOs are rediscovering that brand is not a relic but the bedrock of resilience and long-term growth. As tools get faster, the fundamentals matter more: trust and emotional connection become the anchor that gives customers clarity, consistency, and a sense of security. Four of the top five priorities—branding (ranked #1), data privacy (#3), authenticity (#4), and employer branding (#5)—point to a shift from short-term activation toward long-term brand and trust building. We also see a high need to act on brand, underlining its criticality for CMOs.
Branding (#1) is, at its core, long-term brand building. Marketers plan to invest in distinctiveness, clear value perception, and creativity. Three trends stand out. First, interactive brand building is becoming a two-way dialogue. Second, teams are moving from brand-only campaigns to full-funnel programs that combine long-term equity building with immediate sales triggers. Third, gen AI is being adopted for creative exploration and content generation, though skill and technology gaps remain.
Robust data privacy (#3) has long been a critical component of building strong, trustworthy brands, especially in Europe, where regulators have set high standards for data security since the introduction of GDPR in 2018.
Authenticity (#4) is a genuine expression of a brand’s values, mission, and identity through transparency and consistency that builds emotional resonance.
Employer branding (#5) remains a priority and mirrors the broader shift toward authenticity. Today’s job seekers look for meaningful insights into what a company truly stands for: for example, 83 percent of candidates read company reviews before applying for a job and higher online employer ratings significantly boost employer attractiveness.
Despite concerns that marketing budgets could come under pressure due to company-wide cost-cutting programs, Europe’s marketing decision-makers are signaling optimism. A significant 72 percent plan to increase their budgets (compared to 49 percent who actually did so last year, relative to sales), while 27 percent intend to keep budgets constant (versus 49 percent last year). This reflects a belief in the potential for future growth in Europe. However, this optimism comes with increased pressure from the board, as CMOs are increasingly challenged to demonstrate the value of marketing spend and operate more efficiently. Notably, five of the ten topics cited in our survey as most important by Europe’s marketing executives center around proving and enhancing marketing’s contribution to business outcomes, and can be further broken down into two areas:
The interconnected topics of demonstrating the value of marketing through budget management (#2: sizing, allocating, and controlling marketing spend) and ROI measurement (#6: measuring, steering, and maximizing return of marketing activities) not only score high on importance, but the need to act. We see CMOs increasingly focused on ensuring every marketing dollar delivers measurable impact through smarter budget allocation and rigorous ROI tracking. Demonstrating marketing’s contribution via robust ROI calculations is essential to create credibility across the C-suite, justifying budgets and unlocking future growth opportunities.
CMOs are also aiming to operate more effectively by integrating marketing with sales (#7) and customer experience (#8), as well as agile working (#9). Two advantages come from more closely integrating the marketing, sales, and customer experience functions. First, companies can become more consistent in how their brand is portrayed, not only when sending marketing messages but also across touchpoints like product experiences and customer care. Second, it helps to limit internal friction (for example, between departments and functions) and external friction (such as with partners and agencies), enabling cost efficiencies.4 Additionally, CMOs are increasingly adopting agile methodologies to enhance cross-functional collaboration and respond swiftly to market changes.
While Europe’s marketing decision-makers don’t place gen AI and agentic AI among their top priorities (#17 out of 20), the need for action suggests a very different outcome. We believe this ranking underestimates both the urgency and the opportunity. Gen AI is already reshaping marketing economics: Gen AI leaders in our survey place it in their top five priorities and report efficiency improvements averaging 22 percent, which they bank or reinvest in growth. Laggards, by contrast, leave it near the bottom of their agendas. If this gap continues, European brands risk ceding ground to global leaders. The critical challenge is moving beyond isolated pilots toward marketing-wide adoption that consistently creates value. Be bold encompasses the following four marketing topics, grouped in three areas:
Gen AI and AI agents (#17). Executives generally recognize the potential of gen AI for areas such as media optimization and personalization at scale. Yet many have not matched belief with commitment. For laggards, the most common barriers are weak data and technology foundations, as well as insufficient focus on adoption and scaling. Even more advanced players often lack a clear strategy or operating model. Consumer-facing companies are more likely to lead, focusing on customer-facing applications, while B2B firms tend to restrict use to back-office efficiencies.
Gen AI initiatives risk becoming isolated pilots with limited impact without solid data and tech foundations. Two topics in particular act as key enablers: Data-driven marketing (#10), and martech and adtech (#18). High quality first-party data, consented identity, clean rooms, and modern measurement supply the signals models need. The martech and adtech stack integrate tools and workflows so gen AI can be deployed efficiently across channels and use cases.
Gen AI is reshaping the cost and speed curve for personalization (#12). True one-to-one experiences were rarely feasible at scale without gen AI as the unit cost of creating and maintaining thousands of variants, rules, and decision trees was prohibitive. With gen AI, brands can generate and adapt creative variants, assemble modular content, and orchestrate next best actions for everyone in real time, within brand voice and privacy guardrails.
Where action is needed: Four topics
Our research found the priorities cited by Europe’s marketing leaders also require the greatest need for action (exhibit). When it comes to branding, budget management, and marketing return on investment, or MROI, marketing leaders want greater capabilities—although they seem to be confident with their employer branding capability. But there is a contradiction between priorities and the need for action with gen AI and AI agents, driven by a large majority of maturity laggards in that field that still have the ambition to catch up to leaders.The four topics where Europe’s marketing executives see urgency to act.
As gen AI increasingly shapes consumer decision-making, the role of brands is shifting from providing functional benefits to fostering emotional relevance and trust. Our research finds Europe’s marketing leaders are seeking to generate deep connections with consumers by positioning brands as authentic and creative. They are confident in the resilience of their budgets but remain aware of the challenging environment, putting efficiency and effectiveness first. And they are embracing the transformative opportunities presented by gen AI, with an eye to the emerging potential of agentic AI. In short, they’re seeking to get the basics right and position themselves as leaders in the next phase of marketing innovation.
Aurélia Bettati is a partner in McKinsey’s Paris office, where Victor Fabius is a senior partner, and Sarah Sahel is an associate partner; Jerome Königsfeld is a partner in the Cologne office, Jesko Perrey is a senior partner in the Düsseldorf office, Kai Vollhardt is a senior partner in the Frankfurt office, Thomas Bauer is a partner in the Munich office, where Caroline Meder is an associate partner; and Tjark Freundt is a senior partner in the Hamburg office, where Dominik Müller is an associate partner.
