Why display ad budgets will be cut by 30 % as AI and CTV take centre‑stage

Display advertising faces its biggest shake-up in decades

The digital marketing playbook is about to be rewritten. Forrester predicts marketers will slash display ad budgets by 30% in 2026, as audiences abandon traditional open web environments for AI-powered summaries, connected TV (CTV), and streaming platforms. This seismic shift forces the MENA region brands to rethink where and how they engage consumers.

The writing is on the wall: declining click-through rates, shrinking reachable audiences, and poor ROI from standard display campaigns signal the end of the scattergun approach. Instead, entertainment-first formats and AI-driven discovery are emerging as the new battlegrounds for consumer attention.

The great migration: where audiences are heading

Consumer behaviour is fragmenting across multiple touchpoints. While people remain cautious about generative AI, they're increasingly turning to AI-generated summaries and chat interfaces that bypass traditional display ad environments entirely. This creates fewer opportunities for brands to reach audiences through conventional banner advertising.

Streaming consumption dominates across the Middle East and North Africa, whilst ad-blocker usage and attention fatigue continue rising. The once-reliable open web display model now looks increasingly obsolete, particularly in mobile-first markets like Egypt and the Jordan where attention spans are shrinking.

"Marketers are set to slash display ad budgets by 30% in 2026 as consumers increasingly move away from the open web." , Forrester Research

Connected TV and streaming audio are capturing the budget reallocation. These channels offer richer storytelling opportunities, longer dwell times, and more controlled environments where brands can access viewers directly without competing with multiple banner ads on a single page.

Agency models transform as principal media rises

The agency ecosystem faces structural upheaval. Traditional "agent" relationships are giving way to "purveyor" models where agencies sell execution, managed services, and proprietary products rather than simply buying media on behalf of clients. Major players like dentsu and Havas Media Network are developing principal media offerings that integrate AI into media trading.

This shift brings job cuts and consolidation. After an 8% average headcount reduction in 2025, agencies will eliminate 15% of positions in 2026. Principal media models, where agencies resell inventory with margins and guarantees, will account for about a third of media under management by 2026.

For related analysis, see: Top 10 AI Tools Transforming the Continent.

"You want to follow where the audience is spending their time." , Krystal Vivian, Federated Digital Solutions

Contract structures are evolving from retainer-based to project-based and outcome-focused arrangements. For MENA clients, this means the agency relationship you established five years ago may look completely different by 2026's end.

Strategic pivots for MENA marketers

Smart brands are already repositioning their media mix. The key is thoughtful reallocation rather than wholesale abandonment of display advertising. In mobile-first Southeast MENA markets, display opportunities still exist through local apps and ad ecosystems, but they require more targeted approaches.

Consider these tactical shifts:

1. Analyse display inventory quality: measure time on site and downstream conversions, not just click-through rates
2. Explore AI-powered discovery channels: voice assistants, chat interfaces, and embedded summaries
3. Invest in premium streaming and CTV formats for richer storytelling opportunities
4. Develop hybrid online-offline campaigns that combine digital reach with physical touchpoints
5. Renegotiate agency contracts toward outcome-based pricing and AI-powered solutions

For related analysis, see: Saudi Arabia Will Replace 16,000 Border Troops With AI Surve.

Regional nuances matter significantly. the UAE and Saudi Arabia may favour digitally-enhanced physical activations, while markets like Qatar and Saudi Arabia might benefit from localised streaming content partnerships. Understanding how AI skills impact career development becomes crucial for marketing teams navigating this transition.

The measurement challenge ahead

Confidence in marketing measurement is declining. Only 72% of B2C marketing leaders will feel confident about measuring business impact in 2026, down seven percentage points from 2025. This uncertainty stems from fragmented touchpoints and evolving attribution models.

Building robust measurement frameworks now becomes critical. Brands need to establish baseline metrics across CTV, streaming, and experiential channels before the full transition occurs. The shift toward AI-powered customer engagement requires new approaches to tracking and attribution.

For related analysis, see: AI Revolution: How Google's Search Updates Could Impact Your.

the Middle East and North Africa's regulatory landscape adds complexity. Data sovereignty requirements and platform restrictions may limit CTV and social measurement capabilities compared to Western markets. Privacy regulations across different MENA jurisdictions demand localised tracking approaches.

What does the 30% display budget cut actually mean for brands?

• It represents a reallocation toward more engaging formats rather than a reduction in total advertising spend. Brands are shifting budgets to CTV, streaming audio, social video, and experiential marketing where audiences spend more time and show higher engagement rates.

Will display advertising disappear entirely in the MENA region?

• No, but its role will diminish significantly. Mobile-first markets in the MENA region still offer display opportunities through local apps and ecosystems. The key is strategic targeting rather than broad reach campaigns that characterised the previous decade.

How should agencies prepare for the principal media shift?

• Agencies must develop proprietary technology, data capabilities, and outcome-based pricing models. Traditional media buying roles will consolidate whilst strategic consulting and execution services expand. Investment in AI-powered tools becomes essential for competitiveness.

For related analysis, see: AI Music Showdown: Major Labels vs. AI Start-ups in Copyrigh.

What offline experiences work best in MENA markets?

• Success varies by market. the UAE and Saudi Arabia favour technology-enhanced activations with QR codes and mobile integration. Markets like Qatar prefer immersive brand experiences that blend local culture with digital elements for authentic engagement.

When should brands start reallocating their display budgets?

• Immediately. Test CTV and streaming campaigns now whilst display inventory remains relatively affordable. Early movers will secure better placements and partnerships before competition intensifies. Establish measurement baselines before the full transition accelerates in 2026.

Further reading: Reuters | OECD AI Observatory