2027 Marketing Budgets: Why New Categories Beat Bigger AI Line Items via @sejournal, @gregjarboe

Almost a year ago, I recommended that chief marketing officers should “hire an economist or chief economist” to weather a perfect storm of challenges that included changing consumer behavior, rapid technological advancements, and economic uncertainty.

Earlier this month, nearly 200 economists and tech leaders signed a letter to policymakers warning that AI “could bring risks, including large-scale job displacement.” Basically, the letter called for policymakers to do more to understand and respond to potential disruptions from artificial intelligence.

Very few CMOs have hired an economist or chief economist. And I’m skeptical that policymakers are going to move as quickly as artificial intelligence, which is transforming the economy faster than any previous technology. So, as most managers, directors, and executives plan their marketing budgets for 2027 sometime after Labor Day, they may want to recall what the poet June Jordan wrote back in 1978, “We are the ones we’ve been waiting for.” What should they do?

They should start by using an audience research tool to find out who their target customers are, what they are doing, and why they are doing it.

Then, they should craft a prompt like this one:

“Based on original reporting, research, data analysis, or evaluation from authoritative and trustworthy sources with industry experience and expertise, should I consider shifting my budget into some entirely new categories? Yes, I know this could trigger the dreaded reorg or agency review. But now is the time to analyze what’s working and what isn’t without fear or favor. How should I proceed over the next six weeks before I need to submit my budget for 2027?”

Next, they should enter this prompt into Google to compare what the AI Overview and AI Mode recommend. They should also enter this same prompt into ChatGPT, Claude, and Gemini to evaluate what all three recommend. In addition, they should fact-check, ground truth, and look for the receipt of whatever recommendations search and AI tools make.

Finally, they should adopt David Ogilvy’s old-school practice of “going for a long walk, or taking a hot bath, or drinking half a pint of claret,” which he recommended in his classic book, Ogilvy on Advertising.

I did most of this last week, although I updated Ogilvy’s suggestions. Instead, I came up with some critical data, market trends, strategic insights, and tactical advice.

The legacy channel buckets on most 2026 budget templates are measuring a version of the customer journey that is disappearing. Ewan McIntyre, the Gartner analyst who runs the firm’s CMO Spend Survey, put numbers on how fast. CMOs are now allocating 15.3% of marketing budgets to AI initiatives, yet only 30% say their organizations are actually ready to scale that investment. At the same time, awareness and conversion now claim 62.6% of total media spend, a jump of more than 10% since 2024, while spending on loyalty and retention has fallen 29% to less than 15% of the total. McIntyre’s data found one exception to that shift. The most AI-mature organizations hold onto a larger share of loyalty and retention spend rather than chasing acquisition, which suggests less mature organizations are over-indexing on whatever AI can measure and automate most easily. That is not a contradiction. It is a reallocation already underway, and most budget templates have not caught up to it.

Christine Moorman, who directs The CMO Survey out of Duke’s Fuqua School of Business, found something that points in the same direction from an entirely different source. The 35th edition of her survey, fielded in January among 308 marketing leaders, found that generative engine optimization (GEO) is already in use at four in 10 companies, a category that did not exist in her survey until recently. At the same time, she found no marketing technology activity scoring above a 5 on a 7-point performance scale. That gap is exactly where a budget reorganized by function, not by legacy channel, earns its keep.

So instead of asking which channel gets more money, I think CMOs should build their 2027 budgets around five functional categories.

AI visibility and citation management. This replaces a chunk of the SEO line, but not all of it. The job is no longer only ranking a page. It is earning inclusion in the answer itself, tracked through something closer to what I’ve been calling Citation Share of Voice than through keyword rank.

Trust verification. I wrote mid-July that only 28% of Americans trust AI search results. That gap is a budget line now, not a footnote. Brands that fund the work of getting their facts, credentials, and reviews structured so an AI model can verify them are the ones who close that trust gap before a competitor does.

Distribution engineering. This is where the DIRHAM 2.0 framework I taught in Dubai this spring actually earns its keep. Content built once and pushed through owned, earned, and AI-crawled surfaces at the same time, instead of funded channel by channel, is a budgeting decision as much as a production one.

Human judgment and editorial oversight. Gartner’s own data argues for this line item indirectly. Labor rose from a mean 21.9% of marketing budgets to 24.5% this year, even as 43% of CMOs told Gartner they expected to cut labor spending. The CMOs winning that argument internally are the ones who can show what a trained editor or strategist catches that a model does not.

Measurement rebuild. Last click attribution cannot see a customer who asked ChatGPT for a recommendation and never clicked anything. On May 20, 2026, AMEC (the International Association for the Measurement and Evaluation of Communication) launched its GEO Principles. These and a genuine Citation Share of Voice metric are a more honest place to put next year’s measurement dollars.

None of this means SEO, paid media, content marketing, social media marketing, or digital marketing go away. It means the org chart for your budget stops mirroring the outdated PESO media model (paid, earned, shared, and owned media), which did real work to sort budgets and assign campaigns to channels. But that framework was answering a distribution question, not the one marketers actually face now. Knowing where to place content doesn’t tell you whether it gets seen, and visibility today is decided by algorithms, not people scrolling a feed.

Your 2027 Budget Reorg: 3 Steps Before You Submit

 Step 1. Re-tag last year’s spend against the five functions, not the old channels. Pull 12 months of budget data and sort every dollar into AI visibility, trust verification, distribution engineering, human oversight, or measurement rebuild instead of SEO, paid social, email, and display. This alone usually surfaces work you’re already funding that has no name on your budget template yet.

 Step 2. Run your audience data against each function, not each channel. Use SparkToro or GWI to check where your customers are actually spending attention right now. Fund the function where the gap between spend and attention is widest first, not the channel that’s loudest in the planning meeting.

 Step 3. Walk into the CFO conversation with one number that isn’t last click. Bring your Citation Share of Voice, or an equivalent GEO metric, as the evidence for the reorg. A CFO who hears “AI is changing things” will push back. A CFO who sees a citation trend line next to last year’s flat organic traffic will ask what’s next.

I’ll conclude this column by saying the part Gartner’s press releases won’t. A CMO who submits a 2027 budget organized around outdated channels, in an environment where AI is already reallocating attention faster than any technology I’ve covered in 20 years, is not being prudent. They’re being unprepared.

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