Advertisers raise budgets 9 per cent but struggle to reach new audiences

MUMBAI: Advertising budgets are getting bigger, but the audience pool is refusing to grow with them.

Marketing and advertising leaders increased their paid media and advertising budgets by an average of 9 per cent over the past year, yet 81 per cent admit they continue targeting the same audience segments despite having more money to spend. The finding comes from The Data Advantage Report: Navigating Identity and Intent in a Fragmented Ecosystem, released by Realize, Taboola’s performance advertising platform, in October 2026.

The report exposes a sizeable gap between what advertisers want their incremental budgets to achieve and what those budgets actually deliver. Reaching new audiences was the top stated priority for additional paid media investment, cited by 30 per cent of respondents, but most organisations said their targeting habits continue to pull them back towards familiar audience pools.

The spending increase itself is widespread. More than three-quarters of respondents, or 77 per cent, said their advertising budgets had increased over the past 12 months, with 15 per cent reporting a significant increase of more than 20 per cent and 62 per cent reporting a smaller increase of between 1 and 20 per cent. Meanwhile, 21 per cent kept their spending broadly unchanged and just 2 per cent reported a slight decrease.

That creates a peculiar advertising equation: brands are spending more, but much of that extra money may simply be helping them stay in the same lane. The report cautions that some of the increase could be driven by the rising cost of marketing rather than genuine audience expansion, meaning advertisers may be “spending more to stay in place”.

When respondents were asked what they wanted additional paid media budgets to achieve, reaching audiences they had not previously targeted came out on top at 30 per cent. Increasing frequency or impressions against existing audiences accounted for 24 per cent, while another 24 per cent wanted to test new creative or messaging with existing audiences and 22 per cent planned to bid more aggressively on the same audience pools.

The numbers suggest that marketers are not relying on one single strategy as they increase investment. However, the relatively close split between audience expansion, higher frequency, new creative and more aggressive bidding also indicates that a significant portion of additional spending can still end up chasing people brands already know.

The pressure to prove that extra spending is actually producing incremental growth is building too. The report found that 46 per cent of respondents feel very or somewhat pressured by finance leadership to demonstrate that additional spending is reaching new audiences rather than simply continuing to fund existing ones.

Within that figure, 14 per cent said they were very pressured and 33 per cent somewhat pressured. At the other end, 25 per cent were somewhat unpressured and 7 per cent not at all pressured, while 21 per cent said they were neither pressured nor unpressured.

Yet the execution gap remains hard to ignore. Overall, 81 per cent of respondents agreed that their organisations tend to keep targeting the same audience segments over time even when budgets increase, with 29 per cent strongly agreeing and 52 per cent somewhat agreeing. Only 13 per cent disagreed with that assessment.

In other words, the extra budget intended to widen the funnel can end up making the existing funnel more expensive rather than making it wider. For advertisers chasing incremental growth, that could mean paying more frequently to reach largely the same consumers while the next high-intent audience remains outside the frame.

A major reason for the problem is the increasingly fragmented digital journey. Consumers now move between search, social platforms, publisher websites, apps, email and AI-powered discovery tools, making it harder for marketers to understand whether multiple interactions belong to the same person.

The report found that only 21 per cent of respondents consider their performance marketing channels fully integrated. A much larger 79 per cent are not fully integrated, including 52 per cent that describe themselves as somewhat integrated, 10 per cent that are neither fragmented nor integrated, 12 per cent somewhat fragmented and 5 per cent completely fragmented.

That means a marketer may know that somebody watched a video, read an article and later opened an email, but may not be able to confidently establish that all three interactions came from the same consumer. The result is a patchwork view of audiences rather than a single picture of the customer journey.

The problem becomes even more pronounced before conversion. While 56 per cent said identifying the same customer across multiple pre-conversion touchpoints was very or somewhat easy, 44 per cent said it was not easy. Among the latter group, 26 per cent described it as somewhat difficult and 6 per cent as very difficult, while 12 per cent were neither comfortable nor uncomfortable with the process.

That identity gap matters because advertisers need to distinguish a genuinely new prospect from an existing user appearing through another device, browser, publisher or platform. Without that ability, audience expansion becomes much harder to execute even when the appetite and budget are already there.

The challenge is particularly acute outside the major walled gardens. The report found that 35 per cent of respondents identified limited standardisation of audience and identity data across the open web as the biggest obstacle to understanding consumer intent.

The loss of third-party cookies and other tracking signals followed at 21 per cent, while 17 per cent pointed to the lack of a reliable privacy-safe identity solution across open web publishers. Another 16 per cent cited fragmented or inconsistent data across individual publisher sites, while 11 per cent pointed to lower reach or scale compared with walled garden platforms.

Nearly half of respondents, or 49 per cent, said it was not easy to understand and act on consumer intent outside closed ecosystems such as Google, Meta and Amazon without a robust identity solution. Only 17 per cent considered it very easy, while 35 per cent described it as an outright challenge.

That difficulty helps explain why walled gardens continue to attract advertising money even when marketers say they want to diversify. Closed platforms have spent years building systems that help advertisers identify and target audiences, while the open web offers a much wider collection of publishers and potential consumers but with a more fragmented identity picture.

Despite those concerns, the report suggests the open web has no shortage of advertiser interest. A substantial 81 per cent of respondents said their organisations were very or somewhat open to increasing advertising spend on the open web, including independent publishers, news websites and blogs, compared with walled garden platforms such as Google, Meta and Amazon. Only 6 per cent said their organisations were resistant to such a shift.

The bigger hurdle is confidence. Lower confidence in audience-targeting accuracy compared with walled gardens was the biggest barrier, cited by 18 per cent of respondents. Difficulty proving incremental ROI to leadership followed at 17 per cent, while 14 per cent said they were satisfied with results from their existing platforms.

Tracking a consumer journey from first touch to conversion was another barrier at 13 per cent. Brand safety and content quality concerns also accounted for 13 per cent, while organisational or budget approval processes favouring walled gardens stood at 13 per cent and a lack of internal expertise or tools for open-web campaigns at 12 per cent.

The willingness to shift becomes much stronger when the identity problem is removed. As many as 92 per cent of advertisers said they would be very or somewhat likely to move some budget to the open web if it offered a true closed-loop targeting environment that could confidently identify a single consumer from first interaction through to conversion.

The potential movement of money is significant. Respondents said they would, on average, reallocate 28 per cent of their current advertising budgets to the open web if such a closed-loop targeting environment existed. Notably, zero per cent said they would move nothing.

The report found that 43 per cent would consider shifting a moderate 11 to 25 per cent of their budgets, while 38 per cent would move a substantial 26 to 50 per cent. Another 10 per cent said they could move more than half their budgets, while 9 per cent would shift a smaller 1 to 10 per cent.

Adding another layer to the puzzle is the rapid rise of AI-powered search and discovery. The report notes that LLM-driven queries and AI overviews are changing how consumers search, browse and buy, breaking up the traditional trail marketers have relied on to understand intent.

Instead of moving neatly from search to website to purchase, consumers can now bounce between AI interfaces, social platforms, publishers, apps and traditional search. For advertisers, that means knowing that someone interacted with a brand is no longer enough; understanding whether those interactions belong to one consumer and what that consumer actually intends to buy is becoming increasingly important.

The report was based on a survey of 326 senior marketing and advertising leaders in the US and UK. Respondents worked at companies with at least 1,000 employees and monthly marketing spends of $300,000 or more, across automotive, banking and financial services, and eCommerce, with the survey conducted by independent research company Qualtrics in August 2026.

The respondent base was split 52 per cent US and 48 per cent UK, with 36 per cent from banking or financial services, 33 per cent from automotive and 31 per cent from eCommerce. By company size, 81 per cent worked at organisations with 1,000 to 4,999 employees, 18 per cent at companies with 5,000 to 9,999 employees and 1 per cent at companies with 10,000 or more employees.

The report’s message is ultimately less about advertisers needing to spend more and more about making the extra money work harder. With budgets rising, 81 per cent still recycling familiar audiences and 92 per cent signalling a willingness to shift spending if identity can be solved, the next advertising battle may be less about finding another impression and more about finding the right person behind it.

Realize describes its Realize ID infrastructure as designed to recognise a single user across publishers, devices and domains, combining identifiers such as cookie-based IDs, mobile advertising IDs, publisher IDs, hashed emails and RampID into a persistent profile. The platform says it processes hundreds of millions of these identity clusters daily and that campaigns using directly observed signals have delivered CPAs up to 40 per cent lower and conversion rates up to 144 per cent higher.