What you need to know

• The greater regard in which marketing leaders are held by their leadership peers has surged over the last two years and is translating into greater responsibility for revenue growth, profitability and control of customer experiences, says Capgemini.
• According to the consulting group's global study, Generative AI and the Evolving Role of Marketing by understanding the entire customer journey, marketers can tailor strategies to engage consumers effectively. That has seen a big increase in the direct involvement of CMOs in managing the end-to-end customer experience.
• Now marketers are embracing the next wave of technology transformation, powered by generative AI, and Australia's CMOs are among the most aggressive early adopters.
• Data analysis, personalisation and campaign creation top the early use cases. SEO is also considered an early candidate for Gen AI improvements.
• But there has also been a rapid drop in the number of marketers who say the benefits of Generative AI outweigh the costs. A majority are still optimistic, but that's down from almost three quarters based on a study last year.
• And the report's authors caution that while generative AI streamlines tasks and content creation, excessive reliance on this technology may undermine the spontaneity and emotional depth of human creativity.

Rapid acceleration in the digitalisation of business fuelled by Covid and instigated in the early years of the decade has proven to be a boon for CMOs around the world, at least in one important regard. Many have leveraged organisations' digital transformations to take more direct control of customer experiences and grow their roles as strategic partners in the c-suite, according to a global study by Capgemini.

And now with their full-throated engagement with generative AI —  especially in Australia —  marketers are well placed to leverage the benefits from the next great technology wave.

Called Generative AI and the Evolving Role of Marketing, the Capgemini study revealed a big uptick in leadership teams that regard the CMO as a strategic partner driving business growth, rather than simply a general manager driving a cost centre. Between 2021 and 2023, the percentage of executives with this more flattering view of the CMO grew strongly from 57 per cent to 71 per cent.

That new regard is also reflected in the responsibilities assigned to CMOs. According to the study, CMOs with direct responsibility for a contribution to revenue growth spiked by more than 100 per cent between 2021 and 2023 from 24 per cent to 49 per cent. Likewise, CMO responsibility for contributing to profits grew from 25 to 44 per cent.

CMOs also seem to be winning control of the customer experience, something first mooted in the middle of the last decade with the rise of marketing tech, but which never quite stuck at the time, particularly given the rise of chief digital officers. The last two years however, have seen a big increase in the percentage of CMOs responsible for CX (and probably explains the emergence of the chief customer officer role). The CMO's direct responsibility for customer experience has grown from from 30 per cent to 47 per cent in just two years. 

“Marketers have evolved beyond promoting products; they now focus on creating personalised customer interactions. Our research shows that 66 per cent of B2C organisations believe their CMOs have increased responsibility for customer experience, compared to 46 per cent in 2021," Capgemini's report stated. “By understanding the entire customer journey, marketers can tailor strategies to engage consumers effectively. Consequently, the direct involvement of CMOs in managing the end-to-end customer experience has risen significantly since 2021.”

Generative AI

Marketers have embraced generative AI, and especially so in Australia, where Capgemini's study finds local CMOs to be world leaders in adoption, third only behind the US and Singapore.

Data analysis, personalisation and campaign creation top the early use cases. SEO is also considered a candidate for Gen AI improvements. However, customer service and measuring and tracking brand metrics languish at the end of the priority list.

Looking ahead, CMOs envisage the opportunity to create personalised customer and brand avatars, the study found.

“The marketing function is swiftly adopting generative AI, witnessing substantial adoption of a technology that gained popularity within the past 12 months," Capgemini said. "In our report on generative AI across sectors and functions published this year, approximately 40 per cent of organisations were adopting a 'wait and watch' approach. This approach now applies to only 12 per cent of organisations in terms of the marketing function.”

According to the report’s authors, “Marketers expect a wide range of benefits from generative AI. Our research indicates 57 per cent of organisations believe the benefits of generative AI outweigh its costs and risks."

However, that actually represents a significant decline as it was 74 per cent in Capgemini's previous report on generative AI across sectors and functions published earlier this year. The decline could be a function of the current challenges of generative AI, including data security risks, copyright issues and ethical concerns, said Capgemini.

It’s a point not lost on General Manager, Marketing at QBE, David Hirsch.

“Generative AI is not just another buzzword; its tangible impact is becoming increasingly apparent and is poised to grow significantly. Marketers have only begun to explore its potential, and it presents a significant opportunity," he said in the report. "However, it also comes with risks - understanding how to harness this technology effectively and without detriment to customers is key to staying ahead.”

Two-thirds of organisations believe generative AI will be helpful in long term brand-building. Among the other benefits marketers expect generative AI to deliver are:

• Enhanced efficiency and customer satisfaction 
• Accelerated content creation, prompt results leading to streamlined marketing processes, 
• Heightened customer satisfaction and engagement, 
• Lowered marketing costs, and an improvement in content quality.

“We are in the early stages, and generative AI technology is just over a year old. Given this, organisations exhibit cautious optimism in anticipating benefits from adopting generative AI in marketing. However, considering the swift advancement and integration of this technology within marketing, the actual benefits are likely to surpass current expectations among marketers,” Capgemini stated in its report.

Follow the money

Excitement over the potential of generative AI is reflected in budgeting too, with the study finding organisations investing in generative AI are allocating significant amounts of their marketing technology budgets to it. The study also found nearly half of those surveyed formed dedicated teams within marketing to implement generative AI and a third more plan to establish them in the coming months.

“Marketing functions are actively establishing governance systems and practices to leverage generative AI. Half of the organisations we surveyed have a dedicated budget to implement generative AI within marketing, and a quarter plan to create one in the next six months," the report continued. "When this is considered alongside the nearly 40 per cent of organisations that already have progressed from experimentation to implementation... it is evident organisations are proactively investing in their forthcoming generative AI initiatives within marketing.”

Media, consumer goods and automotive are the most aggressive investors, with tech interestingly back in fourth pace when it comes to per cent of those with budget allocations already in place.

Challenging creativity

CMOs will need to move carefully to strike the right balance between generative AI and human creativity, said the Capgemini report authors.

“While generative AI streamlines tasks and content creation, excessive reliance on this technology may undermine the spontaneity and emotional depth of human creativity.”

Then there is Gen AI’s well-documented propensity for hallucinations – in other words, making stuff up. “AI-generated content may contain factual errors and flawed logic,” and it's up to humans to check the output, the report agreed.

“In time, generative AI will augment human creativity, not replace it In the longer term [next 5–10 years], marketers believe that generative AI will augment rather than replace human creativity," the report authors argued.