MarTech spending risks USD $215 billion loss without clearer ROI
New research from McKinsey reveals that none of the Fortune 500 Chief Marketing Officers interviewed can currently quantify the return on investment of their marketing technology (MarTech) spending, potentially leading to a projected USD $215 billion black hole by 2027 if unaddressed.
The report, titled "Rewiring MarTech: From cost center to growth engine", highlights a dramatic rise in MarTech stack complexity over the past decade. The number of MarTech tools available to organisations has increased by 1,400%, expanding from 1,000 to 15,000 solutions, while many businesses underestimate the number of tools in use by as much as tenfold. This complexity underscores a need for urgent simplification and better management of MarTech investments.
Complexity and measurement issues
According to the research, a significant challenge facing firms is their inability to measure and communicate the direct impact or value generated by MarTech spending. Notably, none of the Fortune 500 CMOs interviewed for the study could quantify the ROI of their MarTech investments. The report forecasts that without changes to address this gap, collective MarTech expenditures could create a massive financial void by 2027.
The study indicates that organisational MarTech maturity remains low, with only one in three respondents stating they can execute advanced omnichannel personalisation, integrated data platforms, and automated workflows. The majority-52%-described their capabilities as only "operational," while 13% identified as "developing."
AI potential and organisational priorities
Artificial intelligence is seen as a potential accelerator for marketing performance. The report suggests that AI could double the speed of marketing activations and boost conversion rates by up to 40%. However, it cautions that such benefits will only be realised if marketing leaders eliminate existing stack complexity and integrate MarTech more strategically at the organisational level.
Robert Tas, Partner at McKinsey & Company said: "Martech has the opportunity for revival with AI. But only if CMOs eradicate complex martech stacks and anchor it as a strategic priority in the c-suite. Only then can brands activate AI-powered customer journeys to realize the potential jump in conversion that AI promises, and see this growth engine in action."
One of the key recommendations from the report is for organisations to appoint a revenue-accountable executive, such as a Chief Experience Officer, to lead the transformation of MarTech integration. This role would be responsible for evaluating the total cost of ownership, ensuring alignment across departments, and directly linking technology investments to measurable business outcomes.
Growth in investment and associated risks
The research finds that 80% of CMOs plan to increase their MarTech spending over the next five years, with more than a quarter expecting increases of up to 25% in the next three to five years. McKinsey warns that these investments risk being ineffective unless businesses focus on reducing complexity and prioritising AI-powered technology that can automate integration, identify redundancies, and coordinate workflows across teams.
Another significant barrier identified is the skills gap within marketing teams. Just over a third of buyers (34%) cite under-skilled staff as a primary reason for underperformance, and many organisations are said to be underinvesting in training, change management, and capability development.
Obstacles to MarTech effectiveness
Nearly half of surveyed decision-makers said that system and data integration issues, along with stack complexity, are critical obstacles to fully realising the value of their MarTech tools. The proliferation of choices and increased siloing across functions further complicates efforts to leverage these technologies for measurable growth.
The report stresses that, to unlock conversion uplifts of 20% to 40%, as enabled by AI, organisations must first resolve foundational issues in data governance, integration, and management. Otherwise, AI adoption risks magnifying existing inefficiencies at scale rather than solving them.
Kelsey Robinson, Senior Partner, McKinsey & Company said: "We need to apply the same discipline and focus that has long guided media investment, to MarTech. By connecting spend directly to outcomes like revenue growth, conversion, and engagement, organizations can unlock far greater value. But, it requires a rethink of the tech, re-skilling of talent and c-suite sponsorship. Then we can turn MarTech from a cost-center to a growth driver".
The research was based on a survey of 233 senior marketing and technology leaders from companies with annual revenues above USD $500 million, including both national and multinational organisations investing substantial sums in MarTech and AdTech, excluding media spend. The survey targeted decision-makers in North America and spans both upper-mid-market and enterprise segments.
