Pull the most recent Gartner CMO Spend Survey and the picture is clear. Paid media is 30.6% of the average marketing budget, the single largest line item. It is also the only category that has grown its share of marketing spend over the past five years, according to Gartner's 2025 survey of 402 marketing leaders across North America, the UK, and Europe.
Every other line has lost ground. Martech sits at 22.4%, labor at 21.9%, agencies at 20.7%, and all three have eroded.
The question every CMO is going to be asked over the next four quarters is whether paid media is absorbing the budget because it works the hardest, or because the budgeting muscle memory has not caught up to where attention actually lives in 2026.
This post walks through what the real numbers say, what they do not say, and where the smart money is already moving.
The actual marketing budget breakdown in 2025
According to Gartner's 2025 CMO Spend Survey, here is what the average marketing budget looks like right now:
- Paid media: 30.6%
- Martech: 22.4%
- Labor: 21.9%
- Agencies: 20.7%
Marketing budgets are flat at 7.7% of overall company revenue, unchanged from 2024. 59% of CMOs report insufficient budget to execute their strategy this year.
The story inside those numbers is what matters. Gartner reports that paid media has grown its share by 11% year over year, while every other category has shed ground. Paid is the only line that has expanded its slice of the pie over the past five years.
Digital channels now account for 61.1% of total marketing spend, with 69% of all digital spend going to paid channels. Paid search alone takes 13.9% of total digital spend.
That is the macro picture. The question is whether the curve keeps bending toward more of the same or something different.
Where experiential marketing actually sits in the budget
The answer to "how much should we spend on experiential" depends heavily on industry.
Across all marketers, event marketing accounts for an average of 14% of total marketing budgets, according to industry reports aggregated by G2 and others.
The average masks significant variation:
- B2C companies dedicate roughly 35% of marketing budget to experiential
- B2B companies dedicate roughly 28%
- Many enterprise marketers fall in the 10% to 30% range
So the "experiential vs. paid media" conversation is not a single ratio. For a B2C beauty brand, experiential may already run larger than paid. For a B2B software company, paid still dwarfs experiential by a wide margin. For the average marketer, paid is roughly 2x experiential.
What is consistent across sectors is the direction of travel.
The momentum signal that does not get the headlines
Gartner reports paid media as the only segment that has grown share over five years. That gets the press cycle.
The signal that does not get the same attention comes from a different set of data points:
- 80% of companies have increased experiential marketing spend
- 74% of Fortune 1000 marketers plan to increase experiential marketing budgets in 2025
- Experiential spend is projected to grow 6.7% in 2025 per The CMO Survey
In beauty and skincare specifically, 84% of companies have increased experiential budgets over the last three years according to Gradient. Per-campaign experiential budget has grown roughly 15% year over year on average.
Read those numbers together. Paid media is winning the share of budget battle right now. Experiential is winning the rate of change battle. The first is a snapshot. The second is a vector.
If your 2026 budget still has experiential at 5% to 10% of total spend, you are not just behind the curve. You are tracking against competitors whose category is shifting around them.
What paid media is actually producing in 2026
Paid media is not getting worse uniformly. It is getting more expensive on most platforms with selective exceptions.
According to recent CPM tracking:
- Global ad spend has grown more than 50% since 2019, with digital responsible for the vast majority of that increase
- CPM prices have risen 2% to 10% across major platforms since 2021
- Display ad CPMs rose roughly 10% between 2021 and 2023, from $2.80-$3.10 to $3.50-$3.80 per thousand impressions
- TikTok US ad CPMs jumped 15.6% in Q1 2025
- Snapchat posted the highest year-over-year CPM growth among major platforms in 2025
Not every platform is moving up at the same pace. Social media CPMs actually dipped 4.4% in Q4 2024 versus Q4 2023, settling around $5.69 per 1,000 impressions according to industry tracking.
The question is not "is paid media getting worse." The question is whether paid media is compounding at the same rate it absorbs budget. For most categories, the answer is no. CPMs rise faster than they fall, organic reach continues to compress, and the relationship between an impression and a measurable business outcome has not improved.
That is the case to make internally for reallocating share, and it is a case you can make with sourced data.
What experiential produces that paid media cannot
This section is opinion grounded in the work we run at National Experiential, not third party research.
We use a framework called Spectacle Math. A well-designed brand activation produces value across four stages:
- The live moment, attended by however many people walked into the activation
- First-wave content, including vertical video, photography, and same-day social
- Second-wave distribution over the four to eight weeks following the activation, including case studies, behind-the-scenes content, and earned media coverage
- A brand artifact that lives in pitch decks, recruiting materials, investor presentations, and culture content for the next 12 to 24 months
Most brands budget for stage one. The dollars stop the night the activation ends. The cameras pack up. The measurement stops.
The brands producing the most leverage from experiential are budgeting for all four stages from day one. Production teams, content capture, distribution planning, and asset library work are part of the brief, not afterthoughts.
This is the part of the math that rarely shows up as a separate line item. It is also the part that determines whether the activation produced 10% or 100% of its possible value. Paid media produces an impression and then the budget ends. Experiential produces an asset that keeps working for the next 12 to 24 months.
The measurement question that decides every reallocation conversation
The most common pushback on increasing experiential marketing investment is "we cannot measure it the way we measure paid media."
That is a tooling problem, not a budget problem.
Experiential marketing ROI measurement in 2026 looks like this:
- UTM-tagged links on every social mention of an activation
- Branded search lift during and after the activation window
- Share-of-voice measurement across organic social and earned media
- First-party data capture at the activation itself, through forms, QR codes, and opt-ins
- Attribution modeling that credits experiential as the first touch in the customer journey
Any brand running this stack can measure brand activation budget performance with the same precision as paid media. Most brands are not running this stack because they have not invested in building it, not because the measurement is impossible.
Under Instrumented channels lose budget fights every time. The fix is to build the measurement stack before you make the case for the reallocation.
What the 2026 marketing budget allocation question actually looks like
The honest version of this conversation is not "paid media is broken, shift everything to experiential."
The honest version is two questions every CMO should be answering for 2026.
First, is paid media in your category still compounding at the rate it absorbs budget? Look at your CPM trend, your branded search lift per dollar, and your funnel attribution. If paid is rising in cost faster than it produces incremental return, the share you have allocated to it is wrong.
Second, are you measuring experiential the way you measure paid? If not, your dashboard is making experiential look soft when the issue is instrumentation, not impact.
If both answers point the same direction, the budget should follow.
How to think about reallocation in the next four quarters
If you are a CMO planning 2026 allocation right now:
- Audit your share by channel against the Gartner benchmark. If you are meaningfully above 30.6% on paid media without a category-specific reason, ask why.
- Look at the rate of change in experiential within your industry. If your peers are increasing experiential and you are holding flat, you are shrinking against the field.
- Build the experiential measurement stack before the budget conversation. UTMs, branded search tracking, attribution modeling, first-party capture. The data wins the room.
- Treat content production and experiential as one integrated line. The brands producing four-stage value have stopped separating them in the budget.
The data shows the smart money is already moving. 80% of companies have increased experiential marketing spend. 74% of Fortune 1000 marketers plan to increase it further in 2025. The question is whether your 2026 marketing budget reflects where the field is going or where it has been.
Ready to rethink your 2026 marketing budget?
We work with brands reallocating toward experiential marketing right now. If you are a CMO or marketing lead building the internal case, we have the case studies, the measurement frameworks, and the activation roadmaps to back you up.
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