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Marketing spending shows signs of growth, but AI adoption is slow: report

Contrary to what some popular action movies might have viewers believe, AI isn’t always trying to destroy humanity.

At least, that’s not how it feels in marketing, where AI seems to be having a largely positive impact, according to the CMO Survey, a biannual report from Deloitte, Duke University’s Fuqua School of Business, and the American Marketing Association. With that said, there’s an important caveat: Companies aren’t using AI for the vast majority of their marketing activities, the report found.

In addition to asking about AI, the report, conducted Feb. 6–March 5, surveyed 292 marketing leaders at for-profit companies in the US about their marketing spend and how they’re addressing a range of other topics such as sustainability and the climate crisis. We rounded up some of the big takeaways below.

Highs and lows: Overall marketing spending has been about flat since last spring, but as of the most recent survey, marketers said it has increased by about 2.5% in the past year. In the coming year, they expect it to increase by 4.7%.

  • Marketers expect growth in digital marketing spend to slow slightly from its 8.9% increase over the past year to 8% in the year to come.
  • Social media as a percentage of total spending fell from 16% of marketing budgets last fall to 11% this spring, but marketers said they anticipate it will climb back to 12.2% in the next year, and up to 16.3% in five years’ time.

Marketing spend as a percentage of company budget has been on the decline since 2022, when it reached a high of 13.8%, according to the survey. As of this spring, it fell to about 10%, down less than a percentage point from the fall 2023 edition of the survey. It’s not quite as low as it was in August 2021, when it clocked in at 9.8%, a pandemic-era low, according to the survey.

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On the other hand, marketing budgets as a percentage of company revenues increased from about 9% last fall to about 10% this spring, the survey found.

Artificial excitement? AI was the talk of the marketing world for much of last year, and this year, there are signs that some brand marketers plan to embrace the tech even more. But there’s also been some hesitancy surrounding AI, and marketing leaders reported that they are only using AI in their marketing work about 7% of the time.

While the report found that AI is still helping to increase sales productivity and customer satisfaction and decrease overhead costs when used in marketing, it’s happening at slightly slower rates compared to what marketers reported in the fall.

Sustainability surge: Marketers expect the percentage of their budgets allocated to sustainability or issues related to the climate crisis will spike 137% over the next five years. Currently, that share sits at 1.9%, up from 1.2% a year ago. The B2B services sector is projected to see a particularly sharp increase in the next five years, from 2.5% to 8%.

About one-third (32%) of companies represented in the survey, though, reported taking “no specific marketing actions…to reduce the risk of climate change.” That share is down from about 40% in February of 2022, per the report. Among the companies that are taking action, the most common steps include changing products and/or services, changing partners, and changing marketing promotions “in order to reduce the negative impact of…marketing-related activities on the ecological environment.”

Originally Appeared Here

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