Over several past decades, TV and even the big screen were the media that captured most of our attention as consumers. Huge budgets were lined up by FMCG spenders to fill Prime Time advertising spots that linear TV offered, and for good reasons. It worked.
When we’re repeatedly exposed to the same branded packaged foods, detergents, aftershaves, or skin creams over a long period, we tend to start buying them—and often keep doing so for years, even after the advertising stops.
Advertising budgets later shifted to accommodate a new trend of digital commerce. Clicks, impressions, likes and shares took center stage when more people shifted away from the TV and spent more time on their mobile and computer screens.
Though they worked for a long while, these vanity metrics are no longer good enough for marketing and ad budgets.
The market collectively reached a new crossroads with AI now taking center stage in reshaping how brands connect with consumers.
“The retail landscape is no longer just about shelves; it’s about screens. In the GCC, the race is on to be the first screen that matters in an increasingly non-linear consumer path,” said Shailesh Jejurikar, COO, Procter & Gamble (P&G), discussing the ‘New Media Reality’ in January, 2026.
AI is collecting our willingly provided first-party data, while also unwittingly tracking our buying behavior, habits, and preferences—24 hours a day, 365 days a year. This has meant that advertising clients now need justification for their investments, not in clicks and likes, but in actual purchases for every dollar spent.
“Most CPG budgets now need a provable path to purchase, not just reach. The challenge is GCC fragmentation. Retail media, delivery apps, social commerce, and creators all sit in different stacks. Brands are prioritizing partners who can connect activation and measurement across those touchpoints without rebuilding the plan mid-flight,” Nick Walsh, Founder and CEO of Migrate, said.
Walsh launched his Dubai-based consultancy in 2025 to help global independent agencies enter and thrive in the Middle East, following two decades in senior roles across WPP, including leadership positions at Ogilvy, Geometry and VML, working across London and the Middle East.
CPG Budget Fragmentation
In specific regions like the GCC, TV remained a significant portion of monitored ad spend through late 2025. For example, one dataset showed that TV accounted for more than half of monitored advertising expenditure across the Gulf.
Yet for CPG brands, 2026 will see traditional “Big TV” advertising lose more ground to a fragmented distribution model, where every ad spend must demonstrate a path to purchase within a closed-loop ecosystem that tracks the consumer from first click to final buy.
The print media is feeling the brunt of the scaled down ad spend. Dentsu Global estimates that traditional print media will decline by another three percent in 2026, as CPG brands reallocate those funds into Connected TV (CTV).
Ad spend will be channeled towards pathways AI will algorithmically define as the most likely to generate recurring returns.
As of early 2026, Statista and Dentsu confirm that digital channels now command nearly 69 percent of all global ad spend. Within this, search and social media combined spending constitutes roughly 54 percent of WARC’s total advertising investment predictions for 2026, scaling to $1.3 trillion. This number is aligned with GroupM and Dentsu’s 2026 Global Ad Spend Forecasts.
CPG brands will benefit from a global retail media spend expected to exceed $190 billion in 2026, according to WPP.
Dentsu reported that digital advertising spend is forecast to grow by 6.7 percent in 2026, representing 68.7 percent of total investment. Retail media remains the fastest growing digital channel with 14.1 percent growth, followed by online video at 11.5 percent and social at 11.4 percent. Programmatic advertising is expected to account for more than four-fifths of digital investment.
Traditional channels are also set for moderate growth with television up 2.4 percent, out of home up 4.1 percent and cinema up 2.2 percent. Print is expected to decline by 3 percent in 2026.
GCC shift: from traditional to digital
The GCC region is exhibiting distinctive ad spend profile modifications. Statista reports that although traditional TV and outdoor advertising still command a large share of monitored spend, digital channels and programmatic are gaining traction as marketers chase consumer engagement data and measurable conversion signals.
It said GCC forecasts point toward digital sources capturing an ever-greater share of total ad revenue by 2030, despite the current manifestation of fragmentation.
“Precision Media and other retail media networks in the UAE are now fully digital and AI-enabled. We are transforming physical shopping environments into high-frequency media channels that complement digital formats, often delivering a 58% uplift compared to traditional in-store signage,” Majid Al Futtaim said of its Precision Media Strategy in Jan 2026.
Statista estimated the GCC advertising spend space to have at least reached $7.2 bn in 2025, with the digital share accelerating in value.
Commenting to Arab News on MENA CPG growth potential, Faisal Sheikh, Senior Partner at Bain & Co. said:
“CPG leaders should view MENA as a true growth arena. The opportunity is real, but the bar is rising. Consumers are more time-starved, more intentional, and increasingly focused on trust and relevance.”
A notable 88 percent of CEOs in the GCC adopted GenAI between 2024 and 2025, with 68 percent reporting improved efficiencies in their own work and that of their employees, according to key findings from PwC’s 28th Annual CEO Survey of global and regional business leaders. The survey gathered responses from 4,700 CEOs worldwide, including a record 300 participants from 11 countries across the Middle East in 2025.
“UAE data shows consumers are already using AI in the shopping journey not as a novelty, but for high-intent behaviours: 41 percent use AI for product research and 40 percent use it to compare prices and find deals,” Hicham Auajjar, MENA operations leader at Heroiks, said.
The company is a France-founded growth strategy and media activation group recently set up in the Gulf, co-founded by Auajjar, who has been based in the UAE for 15 years, previously launching and scaling Keyade in MENA and holding leadership roles at WPP Media and GroupM.
Retail giants like Noon and Majid Al Futtaim are rapidly deploying AI-driven search and retail media. According to a 2026 CPG Trends Report, CPG brands in the Gulf must optimize for transparent product facts, verifying ingredients, allergens, and sustainability claims to ensure retailer algorithms and AI assistants confidently surface their products.
Generative Engine Optimization (GEO)
In 2026, CPG clients will be seeking “Intent-rich” data over “Reach-heavy” metrics. This means no more money poured into passive reach that doesn’t generate first-party data. No more hit or miss campaigns that target bulk audiences. Brands will go after consumers who have shown a strong intent to buy.
AI-integrated tools such as Generative Engine Optimization (GEO) will ensure brands show up in AI-generated responses to consumer questions.
GEO, the 2026 evolution of SEO, optimizes a brand’s digital footprint so that it is accurately cited, summarized, and recommended by AI-driven engines like ChatGPT, Google Gemini, Claude and others.
“The digital shelf is where your product ‘exists’ (retailer PDPs, marketplaces, quick commerce catalogues, reviews, creator content, your owned pages). GEO is the layer that makes that product truth legible to AI, so when consumers ask ‘which one should I buy?’, the system doesn’t improvise; it retrieves, compares, and recommends you for the right reasons,” Auajjar said.
Amazon Advertising says retail media display ads are seeing conversion rates of 10–15 percent, compared to the 1–2 percent industry average for traditional web display that industry benchmarks showed in 2025.
Agency forecasts emphasize that algorithmic and AI-enabled strategies now power a large share of media placements, retail media activations, and performance advertising.
AI efficiencies are enabling more dynamic allocation, real-time optimization, and better measurement of downstream sales and revenue values.
“Integrated AI enables frictionless data flow, real-time decision-making, and dynamic scaling,” said a 2026 PwC Strategy & CPG outlook.
Generative AI is projected to create $400 to $660 billion of annual value for retail and CPG brands by raising productivity in marketing and supply chain planning, said a recent McKinsey/Reuters report.
Abbey Klaassen, Global Brand President, Dentsu Creative said:
“Technology, driven by AI-led product launches and innovation in connected ecosystems, is forecast to be the fastest-growing sector in 2026.”
McKinsey’s 2026 Marketing Report said failure to use AI-integrated tools leaves 30 percent of CMOs less confident in their ability to measure ROI across fragmented channels.
It reported that early adopters of “Agentic AI” in marketing witness effimarily from automating creative output and demand planning.
“The shift toward ‘Agentic AI’ for ad buying is the top area of focus for 78 percent of buyers in 2026. Large enterprises now account for over 53 percent of the AdTech market, using AI to gain behavioral insights and forecast purchase likelihood within a closed loop,” a 2026 Fortune Business Insights Outlook report said.
“Today, every dollar invested needs a purchase hypothesis: what behavior am I driving, through which signal, and how does it translate into sales? That’s non-negotiable. But closed-loop ecosystems aren’t the full truth. They’re the most convenient truth. They over-credit what they can observe, and they under-value what creates demand upstream,” Auajjar said.
What CPG clients stopped paying for
Brands appear to be cutting spend on influencers who offer reach without resonance and on social campaigns that focus only on “likes” rather than “intent signals.”
“The most significant trend is the holistic integration of the creator into the core marketing engine. Community is the new algorithm; we now look for creators who understand how to influence actual buying decisions, not just charisma,» Sanchit Sareen, RVP of Influencers & Creators at Impact.com, said last December.
Around 35 percent of consumers in 2026 purchased directly through platforms like Instagram or YouTube, transforming social from an “awareness” tool to a “commerce” engine, according to Capgemini Research Institute.
“The most successful brands in 2026 will be those that blend technological intelligence with emotional intelligence, pairing efficiency with empathy and innovation with imagination,” Klaassen said.
Threat: Digital fatigue
Here is a word of caution.
Dentsu’s Creative 2026 Trends Report revealed that there was a growing desire to switch off online life, with 45 percent of Gen Z consumers saying the online world feels stressful. This is five percentage points higher than for the overall population.
AI’s next mission might be to learn how to alleviate that digital overload spreading among one of the most tech-integrated generation, or else risk running out of key data.
One way to do that is to deal with “blue light fatigue”. 2026 has already seen a surge in Ambient/Voice AI. The tech is also prioritizing notifications, interrupting consumers only for urgent or meaningful matters.
Brands may need more than a budget shift to maintain profits. They could need a different AI mindset to prevent consumers from losing focus, interest or both.
