Are CMOs Missing GenAI’s Potential?

• According to their CMOs, just 20% of enterprises use GenAI in the most strategic and impactful ways.
• 4 in 5 CMOs using GenAI for low-impact tasks primarily employ it to support market research.
• Routine application users expect full GenAI integration for their organizations within eight years.

As novel uses of generative artificial intelligence (GenAI) come to light, chief marketing officers (CMOs) are evaluating how their firms can best benefit from the technology.

Enterprises employing the technology more strategically have tended to experience the most significant benefits. In general, these firms report the highest returns on investment (ROI) and enhanced marketing effectiveness. As a result, more CMOs see GenAI as a source of efficiency and innovation.

Integrating this technology is not without its challenges, however. A substantial share of CMOs report obstacles. Even large shares of CMOs from the most advanced firms struggle with unfamiliarity with GenAI’s full capabilities (42%) and integration complexities (42%). Notably, integration issues are slightly higher for enterprises using the technology on low-impact tasks (46%). Overcoming these challenges, from integration to oversight, is crucial for CMOs to maximize GenAI’s potential in enterprise marketing.

These are just some of the findings in “How Simple, Routine GenAI Use Can Remake Enterprise Marketing,” the latest edition of the 2024 CAIO Report. This PYMNTS Intelligence series offers a monthly recap of the players and innovators using GenAI to revolutionize how they manage key parts of the enterprise. This edition looks at the landscape of GenAI applications, and the impacts and challenges CMOs face during integration at U.S. firms. It draws on results from a survey of 60 CMOs from U.S. firms that generated at least $1 billion in revenue last year. Survey data was collected from April 5 to April 13.

• What’s at Stake
• Financial Impacts of Strategic GenAI Use
• Integration Challenges to GenAI Adoption
• Conclusion
• Methodology

What’s at Stake

CMOs’ use of GenAI reflects some broader trends in technological adoption. Routine users take a cautious approach to integration, focusing largely on basic tasks like drafting summaries or reviewing literature. However, CMOs employing the technology for strategic tasks like product or service innovation demonstrate a deeper commitment to driving significant business outcomes. More strategic uses can result in enhanced marketing effectiveness, highlighting GenAI’s potential to improve the profitability of marketing practices. Executives aiming to keep the enterprise ahead of its competitors have embraced these more advanced applications.

Strategic importance of GenAI depends on application complexity

Nearly 4 in 5 CMOs consider GenAI to be very or extremely important to providing a positive customer experience. Three-quarters also consider GenAI very important for conducting market research, indicating a strong focus on understanding consumer behavior. Product marketing and marketing analytics also rate highly, reflecting an emphasis on data-driven strategies. Meanwhile, marketing strategy, advertising and promotion reflect the use of GenAI in comprehensive planning and outreach. Finally, brand management and lead generation and sales enablement highlight the value of GenAI in maintaining brand identity and driving sales. The importance CMOs place on GenAI across various functions points to its growing impact on marketing practices.

However, CMOs prize some uses of GenAI over others, depending on the task’s potential impact on the enterprise. High-impact CMOs — those using GenAI for the most complex, risky or strategic tasks — prioritize its use in marketing strategy and brand management. By contrast, low- and medium-impact users place greater emphasis on operational applications, such as customer experience monitoring. By addressing integration challenges and providing comprehensive training to overcome unfamiliarity, low- and medium-impact CMOs can help their teams maximize GenAI’s potential across marketing functions.

Financial Impacts of Strategic GenAI Use

ROI increases with application complexity

Enterprises using GenAI in the most strategic ways run about three more applications than those using it for routine tasks. Notably, 50% of firms using the technology in highly impactful and strategic ways report very positive ROI. In contrast, only 7.1% of firms using the technology for routine and less impactful tasks report very positive ROI. These findings emphasize the more significant financial benefits of adopting the technology for more complex, risky or strategic tasks across marketing operations.

Implementation Timelines Track ROI Expectations

Highly strategic uses of GenAI also correspond with more optimistic views on the time required for full integration. CMOs with the most impactful GenAI applications and very positive ROI expect full integration within three years. By contrast, medium-impact users expect integration within five years, and low-impact users expect integration in roughly eight years. Firms with negligible ROI predict a 14-year timeline for full integration.

Integration Challenges to GenAI Adoption

Even the most sophisticated CMOs still struggle to deploy GenAI effectively

Unfamiliarity with GenAI’s full capabilities and integration complexity remain significant challenges for all users. Overall, 43% cite unfamiliarity as a drawback to their organization’s GenAI adoption, with almost as many also reporting headaches from integration complexity (42%). However, these findings highlight challenges common to implementing almost any new technology.

A significant share of CMOs also cite the importance of addressing GenAI’s risk to the enterprise. The lack of human oversight and transparency represents a drawback unique to GenAI adoption for 33% of CMOs, with 30% also reporting data security and privacy concerns that stress the need for proper training to maximize its potential safely and securely.

Although most firms encounter these challenges, CMOs express varying degrees of concern with them depending on their level of GenAI usage. Overall, these concerns underline the necessity for comprehensive training and enhanced oversight to fully realize the technology’s benefits. For example, high-impact firms are more likely to face additional hurdles such as employee resistance (reported by 42%) and ongoing maintenance expenses (33%). Meanwhile, medium-impact users tend to struggle with reliance on GenAI vendors (cited by 35%) and high costs (30%). In this way, marketing organizations require support tailored to suit different usage levels.

Conclusion

Most CMOs surveyed consider GenAI essential for enhancing customer experiences and conducting market research. These strategic uses are linked to significant financial benefits, with high-impact firms up to seven times more likely to report higher ROI than those using it for routine tasks. However, even the high-impact CMOs surveyed still face challenges like unfamiliarity with GenAI’s full capabilities and integration complexity.

Despite these obstacles, the potential for GenAI to transform marketing practices is immense. High-impact users expect full integration within three years, while routine users anticipate a timeline of eight. Tackling integration challenges with comprehensive training is crucial for maximizing GenAI’s potential to improve the profitability attributable to marketing initiatives. By doing so, enterprises can revise their marketing strategies to improve operational efficiencies and achieve more substantial business outcomes.

Methodology

“How Simple, Routine GenAI Use Can Remake Enterprise Marketing,” a PYMNTS Intelligence exclusive report, is based on an analysis of 60 responses from CMOs from companies earning at least $1 billion in revenue in the U.S. The survey was held from April 5 to April 13. It looked at how enterprises use these tools, what issues they experience, what impact GenAI has on their bottom lines and how executives see its role in the future of work.

For the analytical framework, PYMNTS Intelligence considered 13 different tasks done by GenAI. Each task is classified based on how routine, complex, risky and impactful it is to the business. Based on this system, we developed a proprietary weighting scheme assigning firms a total score to show how impactful the applications are. A firm with just a few routine applications would fall into the low-impact group. Conversely, a firm with multiple highly strategic applications would be considered high-impact. This framework considers how many people are involved in the task, how many inputs are considered and to what extent GenAI helps one person complete a task rather than an entire process.

Read the previous edition of the 2024 CAIO Report Series “Accounts Payable Cycles: The Potential for AI” for more.