By Justin Jefferson, VP of Strategy & Insights at Keen Decision Systems

The CPG industry has faced a turbulent few years, with COVID-19 changing consumer shopping behaviors and economic uncertainty around tariffs and rising inflation. As a result, consumers have cut back on spending altogether or are opting for cheaper alternatives. With brands fighting to win over cautious shoppers, they’ve had to adjust their advertising spend to focus on channels that lead to better results.

However, what is working currently might not work months from now, so brands need to plan accordingly. As retailers start planning their budgets for 2026 and beyond, we’ll look at current spending among CPG brands and how they can use these findings to set themselves up for success in future quarters. 

The Illusion of Search 

In 2025, our data shows that search had the largest share of spending among CPG brands, checking in at 22%. The growth in search spending was driven by retail media networks, which have over-indexed on lower-funnel search format campaigns. 

Not surprisingly, these retail media search campaigns typically show strong ROAS in a retailer’s attribution model, because they're placed at the point of conversion, generating a profit ROI of $1.69.

But these tactics aren't driving the incrementality that justifies this significant level of spend. As such, we recommend that brands decrease their share of spending on search to 15% in 2026 and 2027. 

It’s also best for brands to shift their retail media investments towards off-site ads or up the funnel into display, video or social formats. This shift in spend allows brands to target channels that deliver more incrementality, especially as the retail media industry gets more crowded. 

Linear Lives 

Despite trailing streaming video in TV watch-time, linear TV still maintains a significant share of ad spend among CPG brands at 21%. Linear television has historically been a tactic that sees massive flighted campaigns, with large investments in short periods of time. 

With changing consumer tastes, we recommend a slight decrease in spending in 2026 and 2027, down to 20%, as current profit ROI is just $1.45. In practice, this means slightly reducing annual budgets and executing at lower levels of investment across all weeks instead of short bursts of activity.

This approach ensures that brands have an always-on campaign, which can help boost visibility and long-term brand equity, which is key in the ultra-competitive CPG industry. 

Shift to Streaming 

With consumers now spending over four hours with digital video each day, streaming video tops the list of recommended investments in 2026-2027. Currently, streaming video makes up 20% of ad spending among CPG brands, tied for third in share with social media. 

In recent years, streaming has started to gain ground within CPG and has room to grow over the next few years thanks to strong profit ROI of $1.65. This has come at the expense of social media, which has seen budgets stay consistent or declining since 2023.

As time spent with digital video continues to grow, it makes sense for CPG brands to follow the viewers. As such, we recommend that streaming video should make up the largest share of spending 2026 and 2027 at 21%.

The Power of Partnerships 

Partnerships, where a brand partners with another organization or a celebrity, only account for 1% of the category’s spending in 2025, but they’re worth another look. Partnerships deliver a strong profit ROI of $1.71 and can serve as a valuable opportunity to reach consumers on the ground at sporting events or concerts. 

Consumers are highly engaged audiences when attending an event for their favorite artist or team, so we advise increasing investments into experiential or event-based marketing to 6%. For brands who might be hesitant to go all-in on partnerships from the jump, testing a smaller event or concert to gauge performance can serve as a solid starting point.

With nearly three-fourths of CPG brands jumping on the retail media craze, there has been a massive increase in search spending. However, this represents a leap of blind faith, as search spending is not always delivering real incremental value. Instead, CPG brands would be smart to invest in streaming video, as it represents an area of growth, and partnerships and sponsorships, which deliver strong profit ROI.