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Marketing capabilities — the complex bundles of skills, processes, and organizational know-how that enable companies to implement customer-related activities and adapt to marketplace changes — are rated by marketing professionals as important to business success. At the same time, artificial intelligence is rewriting the rules of content creation, customer targeting, and performance measurement. Responsibilities such as managing generative engine optimization (GEO) are emerging as vital online capabilities that did not exist even two years ago.
Eighteen years ago, one of us (Christine) launched The CMO Survey, polling marketing executives about the state of the industry and their organizations. In January 2026, we conducted the 35th edition of the survey, which received 308 responses from marketing leaders at for-profit U.S. companies. The results are troubling.
It’s our assessment that two critical things are happening right now. The first is that the requirements of effective marketing are shifting faster than at any point in The CMO Survey’s history, led by the need to figure out where and how to incorporate AI capabilities. The second is that the state of the marketing profession is not ready for this moment. Instead, marketing teams are systematically undermining their own ability to build the capabilities important to their success.
This is not a minor inconsistency. We see a pattern — visible across budgets, hiring, organizational behavior, and strategic priorities — that raises fundamental questions about how companies today are making decisions about investing in marketing capabilities. Our prediction is that this soft commitment to what we believe is critical marketing know-how will cost organizations competitively if it is allowed to continue as it is today.
Underinvestment Looms Large
Nearly 60% of marketing leaders reported that their primary approach to building marketing capabilities is through internal training and hiring rather than via external partnerships or acquiring other companies. This preference hasn’t changed since we last asked about it in 2020, despite six years of dramatic shifts in what successful marketing requires. And despite this reliance on internal resources — and surveyed leaders’ belief that marketing capabilities are important to business success — getting financial support for capability building remains a challenge.
In particular, when we look at what companies are actually doing to support that stated commitment to training and hiring, the details tell a story of underinvestment. Training and development budgets have declined steadily for years and now stand at just 3.8% of marketing spend — down from a pre-pandemic high of 5.8% in 2019. Marketing head count growth has dropped sharply, falling more than 50% from last year’s rate. And when asked what capability is most lacking in their organizations, the most common response from marketing leaders was not a skill deficit but inadequate resources: not enough people, time, or budget to make existing capabilities function effectively.
Strategic intent and resource allocation point in opposite directions. Companies say that they build their capabilities through people, but they are systematically reducing or slowing their investment in those same people. We call this disconnect the marketing capability paradox.
A closer look at agility and skills investment illustrates this contradiction. Seventy-one percent of marketing leaders in our survey said that agility is key to their organization’s success. Marketers reported performing reasonably well at this, able to quickly revise priorities and shift resources in response to change. But at the same time, they reported that their weakest-rated activity across all agility dimensions is “building the capabilities that facilitate agile marketing actions.”
Companies see themselves as good at reacting to change, but they are weaker at building the organizational foundation that would make those reactions less costly and more effective. This distinction — between responding to the present and investing in the future — is a troubling signal that runs through every dimension of how marketing capabilities are managed in organizations.
Seven Barriers to Capability Building
Cuts in training and declines in head count are the most visible symptoms of this paradox, but other data hints at larger structural challenges. From our survey results, we identified seven interconnected forces that are working against capability development. Understanding them together reveals why this problem is so resistant to easy solutions.
There is a serious gap between the adoption of technology and marketing teams’ preparedness for using it. Technology adoption is outrunning organizational readiness. Companies are investing in technology faster than they are building the human capacity to effectively use it, which means each new tool widens the capability deficit rather than closing it. One survey respondent succinctly described their biggest barrier to maximizing the impact of marketing technology as “attracting the right talent, retaining them, and keeping them up to speed on changes happening.”
Asked to rate elements of their marketing technology activity on a 7-point performance scale (where 1 is going “poorly” and 7 is doing “very well”), survey respondents didn’t give even one activity a score above 5. Performance levels have not improved over the past two years, even as marketing departments have scaled up their deployment of AI tools. The two lowest-rated activities — hiring employees to manage marketing technologies (3.7) and training employees on emerging marketing technologies (3.9) — are the very ingredients needed to close the gap between deployment and effective use of technology.
This is not a minor issue. AI use in marketing activities has nearly doubled since 2024, from 13.1% to 24.2% today. Respondents projected that AI will account for more than 50% of all marketing activities within three years as it increasingly delivers measurable improvements in sales productivity, customer satisfaction, and marketing overhead costs. Gains from AI are rising year over year, but the people power to keep pace is not.
Too many marketers have a structural orientation toward the present. Every year since 2019, marketers have reported in our surveys that they devote roughly 68% of their time to managing the present and 32% to preparing for the future. This ratio has held constant across the COVID-19 years, the digital transformation era, and now the AI revolution. This tells us that the ratio is not a situational response to any particular economic pressure but a structural orientation that is remarkably resistant to change.
But capability building is inherently a future-oriented investment. It requires sustained attention, a multiyear commitment, and a willingness to accept near-term costs for long-run returns. In an environment where organizations have consistently prioritized the present over the future for the past seven years, that kind of investment cannot take root. As one respondent noted, “There is little time for future thinking. We have a strategy, but our actions are tactical and short term, making it difficult to prove effectiveness.”
Current economic pressures are intensifying a condition that predates them and have pushed 70.6% of marketing leaders toward short-term impact over long-run gains and 26.8% toward explicitly emphasizing spending over building capabilities, according to our survey data.
Marketers aren’t highlighting strong data around impact and retention. Our survey found that marketing’s impact on customers is growing more durable, meaning that payoffs are being felt further out in time than previously was the case. The median duration of marketing’s impact has lengthened from several months in 2022 to six months in 2026, with a meaningful shift toward effects lasting one year or longer.
In addition, customer retention, the metric most directly linked to the depth of marketing capabilities, is growing at 12.8%, well above the growth of customer acquisition, at 7.4%.
In spite of this, marketers continue to focus on short-term impact. This is a missed opportunity: The cumulative value of sustained marketing investment may be greater than short-term measurement approaches currently capture.
Ties with the C-suite are weak. Building and sustaining marketing capabilities requires organizational buy-in and support that extends beyond the marketing function. Yet the partnership between marketing leaders and CFOs, measured on the 1-7 scale, stands at just 4.5 for building a business case for marketing spending — barely a change from 4.3 in 2021. Without a strong CFO relationship, marketing leaders will find it difficult to make a credible internal case for capability investment. This is key to why training budgets and head count suffer.
The result is a vicious cycle. A weak CFO partnership leads to underinvestment in capabilities, which weakens marketing’s ability to demonstrate value, which further erodes the CFO relationship. This deficit also shows up in weak collaboration with technology leaders: Only 55.7% of marketing leaders reported collaborating with their CIO or CTO on digital activities. That leaves the rest without the technical partnership that adopting AI tools increasingly demands, especially if they’re to be adopted at scale.
A rigid build-versus-partner mindset stifles development. AI-related capability gaps spanning analytics, generative AI, GEO, and demand generation were cited by a combined 35.7% of marketing leaders as their most pressing unmet needs. These are precisely the areas where external partnerships and acquisitions might accelerate capability building more effectively than internal development. Yet the build preference persists, even as the resources available to execute it continue to decline.
It’s genuinely surprising that despite six years of dramatic change in what marketing capabilities are required (particularly the growing centrality of AI, analytics, and technology skills), how companies approach capability development has remained unchanged since we started conducting our survey in 2020. The overwhelming preference for building capabilities internally through training and hiring — the choice of nearly 60% of our surveyed marketing leaders, as mentioned earlier — was a reasonable strategy when capability requirements were relatively stable. It is a much more problematic strategy when the technology capability landscape is shifting as rapidly as it is today.
The foundation is too weak to sustain new initiatives. Perhaps the most telling finding in this year’s survey is that the most cited capability gap is the inadequate resourcing of existing capabilities — not enough people, time, or budget to make what companies already have function effectively. Companies are not failing to build the right capabilities; they are failing to sustain the ones they already have. The implications are significant: Even if companies were to invest in the right new capabilities, they would be building on a foundation that is already crumbling.
Marketing’s essential purpose has a framing problem. How marketing leaders think about the value of skill building may be contributing to their underinvestment. Nearly 4 out of 5 surveyed marketers (78.2%) said capabilities matter primarily because they deliver higher ROI for every marketing dollar spent. Fewer named reasons that are more strategically durable, such as increasing the effectiveness of managing customers (cited by 52.1%), making it more difficult for competitors to imitate them (37.0%), or attracting and retaining top talent (33.3%). When capabilities are justified primarily on short-term ROI grounds, they will always lose the budget argument to investments that demonstrate returns more quickly and more visibly.
The deeper strategic case for investing in marketing capabilities, including the argument that they build organizational resilience, create competitive barriers, and compound in value over time, is largely absent from how marketing leaders think about capabilities and communicate them to others. This framing problem affects more than the conversations marketers have with CFOs. It shapes how marketing capabilities are more broadly prioritized internally, how they are resourced, and how quickly they are cut when financial pressure mounts. Leaders who cannot articulate why capabilities matter beyond their immediate financial return will find it difficult to protect them.
What Companies Should Do
What makes this situation particularly concerning is that the seven forces are not independent. They reinforce one another in ways that make the capability deficit self-perpetuating. Short-termism reduces the organizational appetite for capability investment. Reduced capability investment weakens marketing’s ability to demonstrate value. A weakened ability to demonstrate value increases pressure from CEOs, boards, and CFOs — which drives more short-termism. Meanwhile, technology adoption accelerates the demand for corresponding capabilities; the CFO partnership remains too weak to fund a response; the build strategy persists even as its resources erode; and the framing of capabilities as an ROI tool rather than a strategic asset ensures that they will always be outcompeted for budget by investments with more immediate and visible returns.
Our survey data suggests three priorities for marketing leaders and their organizations.
First, executives across the C-suite should wake up to the need to decouple capability investment from short-term financial pressure. Marketing training budgets and staffing are currently treated as variable costs that can be cut when profits disappoint. Indeed, our surveyed executives reported that marketing expenses are cut 45.4% of the time — more frequently than other areas of the company — when executives face profit shortfalls. But treating capability investment like discretionary spending mischaracterizes its nature entirely. Capability investment is analogous to R&D: Cutting it saves money in the short run while compounding the capability deficit in ways that are costly to reverse. Companies that protect capability investment through economic cycles will be better positioned when conditions improve.
Second and relatedly, marketing leaders need to reframe the case for capability investment. Marketing leaders who justify it primarily on ROI grounds are making their own investment case harder to win. The more compelling and durable argument connects capability investment to competitive advantage, organizational resilience, and the ability to attract and retain the talent that the AI era requires.
Third, markers must revisit the build-versus-partner assumption. The stability of the build preference across six years of surveying in an age of dramatic change in marketing’s requirements is striking. For AI-related capabilities in particular — where the speed of change and the specialized knowledge required make internal development especially challenging — a more aggressive partnering strategy is likely to be more effective. This does not mean abandoning the build approach, but it does mean subjecting it to the same scrutiny applied to any other strategic assumption that has not been tested in years.
The capability paradox is not just an operational problem but also a strategic one. Companies are underinvesting in the very capabilities that the evidence suggests are generating their most durable and valuable results. In a competitive environment being reshaped by AI, where the capability gap between leaders and laggards will widen rapidly, that is a costly mistake to make and a difficult one to reverse.