CMOs Plan Big Investments In AI For The Next Three Years

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Marketers are preparing to take the next leap forward with AI. Boston Consulting Group’s annual survey of marketers found that 71% of CMOs plan to invest more than $10 million annually in generative AI over the next three years, and 83% are optimistic about the technology. Worry about the technology has fallen to 23% among CMOs, half of what it was just two years ago.

“It’s clear that GenAI has become a core part of how modern marketing teams operate,” Lauren Wiener, BCG managing director and global lead for the firm’s marketing practice, said in a release. “What separates the winners is a commitment not just to scaling the technology, but to empowering the people who use it. Those CMOs investing in tools and talent are the ones rewriting the playbook.”

So far, content creation is a top use of AI technology. More than three-quarters of CMOs are actively using AI for image generation, creating animated videos, writing copy, and translating text into multiple languages. About 30% have plans to pilot live-action-style video generation and enhancement in the near future.

Personalization is also a top use of AI-powered analytics. Half of CMOs have already deployed personalized product recommendations at scale, while more than two out of five are piloting AI tools for content performance forecasting, audience segmentation and optimization, ROI forecasts for advertising spend and demand forecasting. The top priority for investment in AI, the study found, goes back to the consumer: improving digital customer experience.

Aside from content creation and personalization, AI can help marketers dive into data and determine what works and what doesn’t, showing actual results from a campaign. International food giant Kellanova took a step in this direction when it used clean room technology to figure out if specific targeting could improve their sales of Special K in the U.K. I talked to Global Senior Director of Insights and Intelligence Louise Cotterill and Chief Growth Officer Charisse Hughes about the technology and process. An excerpt from our conversation is later in this newsletter.

SOCIAL MEDIA

As Elon Musk leaves Washington, D.C., he plans to add a new function to social networking app X, formerly known as Twitter, part of his campaign to make it an “everything app.” XChat, an encrypted messaging feature, is set to start rolling out to X users this week, Musk said in a recent post. This update will bring X directly in competition with Meta’s WhatsApp and the encrypted messaging platform Signal. XChat will allow for file sharing, vanishing messages, and audio and visual calls made without a telephone number. The new functionality is an update to X’s Direct Messages feature, and has reportedly launched early to some premium subscribers.

Meta is making a long-desired update to its Instagram app: allowing images with 3:4 aspect ratio. For years, Instagram photos could only be squares, meaning the vast majority of photos taken on phones needed to be cropped before they could be posted on the social network, writes Forbes senior contributor Paul Monckton. Now, users can post photos just as they were taken, allowing for a fuller look at each picture. Monckton said the rollout seems to be staggered, and not all users have access to this capability yet.

There have also been reports that Instagram is coming to the iPad, which has never offered the app. Forbes senior contributor David Phelan writes that Bloomberg reported Meta employees are actively testing a version of the app for the larger screens on the tablet devices. Meta has been busy extending its social apps to iPads this year; WhatsApp debuted there last month, Phelan writes.

NOW TRENDING

As women’s sports continue to grow in popularity, Major League Baseball entered a strategic partnership with the Athletes Unlimited Softball League, a four-team women’s professional softball league that kicks off its first season this month, writes Forbes senior contributor John Perrotto. Sportico reports that the partnership includes an eight-figure financial investment. MLB will also work to raise the visibility of the new league through its marketing, events, editorial, digital and social content arms. Some of the AUSL games will also be broadcast on MLB Network and MLB.TV.

MLB Chief Baseball Development Officer Tony Reagins told Perrotto that conversations leading to the partnership have been in progress for a year and a half, and MLB was convinced to make this investment due to the leadership of AUSL. Athletics Unlimited, which also owns and operates professional women’s volleyball and basketball leagues, was founded in 2020 by Jon Patricof and Jonathan Soros. Longtime MLB executive and former Miami Marlins general manager Kim Ng is the AUSL’s commissioner.

Women’s professional sports leagues have existed for decades, but they are now starting to see growing support and dedicated fan bases. Forbes’ Justin Birnbaum talked to Michele Kang, the billionaire owner of three women’s soccer teams—the National Women’s Soccer League’s Washington Spirit, France’s Première Ligue’s OL Lyonnes, and England’s Women’s Super League’s London City Lionnesses—about her investment in women’s sports. She took control of the Spirit in 2022 at a $35 million valuation, which was then seen as an astronomical price—though Forbes estimates the team is now worth $130 million. “This is not charity; this is not some corporate DEI project,” Kang said. “I’m on a mission to prove that this is good business—not just a business, but a good business.”

MARKETING MATTERS

If you’re looking to attract attention in a B2B campaign, LinkedIn is a key platform. Today, the professional networking site rolled out updates to improve its B2B video advertising offerings to help brands stand out. According to LinkedIn’s own research, 75% of B2B marketers feel that video helps them reach decision makers, and 93% feel video is better at driving brand recall than single-image ads.

LinkedIn’s expansion allows companies to buy First Impression Ads: vertical video ads for single-day campaigns that can target users in specific businesses, and are guaranteed to be the first ad that those members see during the day. For campaigns lasting longer than 24 hours, B2B marketers can place their sponsored content in the top spot of users’ feeds through LinkedIn’s new Reserved Ads. The professional networking site has also improved its CTV advertising capabilities and reach, now adding Paramount’s premium content and improving tagging to better target the right viewers.

LinkedIn also announced an integration with Adobe Express, bringing the popular video editing tools to its platform to help marketers create the best quality videos.

ON MESSAGE

How Clean Room Technology Can Show Marketing Impact

Last year, international food giant Kellanova (part of the company formerly known as Kellogg) was hoping to improve sales of its Special K cereal in the U.K. as competition increased. Their hypothesis: Targeted audiences would buy more Special K with messaging and content that focused on the quality and value of the cereal. In order to test the theory, Kellanova used data clean rooms, a high-tech and AI-powered way to penetrate deep into data. The company was able to show their targeting worked—sales increased 9% among price-conscious shoppers, and 36% among premium shoppers—and has since been using clean room technology for more aspects of marketing.

I talked to Kellanova’s Global Senior Director of Insights and Intelligence Louise Cotterill and Chief Growth Officer Charisse Hughes about how they used clean room technology to find success in this campaign and others. This conversation has been edited for length, clarity and continuity. A longer version is available here.

How did you land on using clean room technology to do this?

Cotterill: The most important thing to do is start with a business problem, because if you start with the technology, it will never land and never get embedded in the business. My role is to look at how do we better use advanced sciences in marketing. Media is by far our largest expenditure. We saw a 1% to 2% improvement in media effectiveness and efficiency. That’s a significant improvement to our commercial bottom line. We started with that as the objective: How do we create more effective and efficient consumer connections? What that took us to was the role of data collaboration.

Kellanova is one of the most trusted companies. We have to do it at the gold star standard of privacy. The gold standard is a clean room where we can anonymize that data as much as possible. And so that was really where it went.

The crucial part is that it’s very easy to be seduced by data, the idea of technology and these shiny objects. If you don’t start with a problem that you’re [actually] trying to solve, all you get is a very expensive tool that never gets used.

What’s been great about the clean room is that we have not only been able to demonstrate impact, it’s repeatable into our processes and practices, and that’s the key unlock for anything that we do in these AI and data science programs.

When you embarked on this project, was there any pushback, confusion or hesitancy among the team to do something this high tech and bring so many data resources into it?

Cotterill: It was a clear business need, so it was a much easier sell than perhaps it might be [if we said] let’s just chase this shiny AI tool. It came with a solve for a problem, but I’ll be totally transparent: We didn’t knock it out of the park the first time. It wasn’t a magic turnkey solution. We had senior leadership who believed in it. And so when we don’t see the results the first time, we still have the confidence to keep going and the belief that that will drive a meaningful impact in our business.

That’s what we saw with Special K, and now that’s embedded into many campaigns in multiple markets. The beautiful thing is these models just get smarter every time we deploy, every time we target, every time we get a result, we are getting smarter and more understanding.

Hughes: When you think about this space that we’re all operating in, which is new and unknown by many, it’s uncomfortable because it’s not how we’ve always done it. It’s techy. All those dynamics, we faced those. Add to that in some cases, you’re spending more dollars because you’re targeting a smaller group of people. So your CPMs are arguably going up, but you’re driving a better return on investment at the end of the day.

For sure it takes some convincing and some test-and-learns. We failed at first, and this spirit of failure, and failing fast and failing cheap, has to be a part of what you’re building in terms of the muscle of the organization. It definitely takes time.

My prior life was in retail, and you’re able to recover a little bit faster because you’re naturally accustomed, moving at that pace and testing and learning and adapting. When you’re a bigger organization like Kellogg/Kellanova, you’re building more of the internal confidence and belief in what’s possible. Then you’re using this test-and-learn approach to demonstrate what’s possible, but you build it through words, collaboration and a partnership, bringing everybody together to talk through the plans, and really build that allyship and confidence. We are really fortunate that we had Lu, a digital marketer who comes from an agency background, who could be our champion and wave the flag around, and, from my standpoint at the executive level, is bringing my CEO and CFO along on the journey as well.

How do these results compare with ones you’d seen earlier, both through panels, but also through online data before privacy was such a widespread concern?

Cotterill: The biggest shift for us is the granularity that we’re able to see what’s going on in our business. Panel data has been fantastic, but often the exciting parts in marketing are on the fringes. That’s where you identify the insight or the opportunity. Those edges have been softened out for a long time. Whilst you talk about the clean room potentially as a targeting tool, we’re bringing it further upstream in our strategy and business planning process because it gives us an incremental visibility we’ve never had before. We can see things like geographic divides in how our food is sold, or price sensitivity. We can understand that, amazingly, not all women are the same. There’s different nuances, and we can target and speak to those in different ways.

Most exciting is the measurement piece: You’re not just relying on model data. You’ve got actual real data. For me, it’s really hard to go back to working because the precision you’ve got, it looks so illuminating and so exciting. As a marketer, you just want to lean into it as much as possible.

Hughes: Being able to talk to our consumers more directly about their behaviors, versus taking a retrospective and constantly having to look back; actually seeing what they’re doing and how they’re reacting in real time [is great], but the measurement part is probably the most exciting. There are those people who believe marketing is just a line item in the P&L to be cut, that is not really delivering on what we know it can deliver: growth, engagement and long-term business and brand acceleration. Now, we can demonstrate the sales impact as well as the brand impact. Being able to communicate that you need both is critical. Now we have the data, we have the test-and-learns, we have the insights and the capabilities to do that better than ever.

COMINGS + GOINGS

• Tech-powered creative agency Accenture Song announced Ndidi Oteh would step into its chief executive officer role, effective September 1. Oteh, who is currently leading the firm’s Americas business, will succeed advertising industry giant David Droga. Droga will continue to advise as a vice chair at Accenture.
• Luxury fitness company Equinox appointed Bindu Shah as chief marketing officer and chief digital officer. Shah most recently worked as EVP and global CMO/CDO at Tory Burch, and has also held senior leadership roles at Sephora and Gilt Groupe.
• Software and biotechnology firm Schrödinger hired Mannix Aklian as executive vice president, chief commercial officer, and global head of software sales and marketing. Aklian joins the company from Certara, where he served as senior vice president, global software sales.

STRATEGIES + ADVICE

Brands can hold enormous and lasting power over consumers, and can inspire dedicated endorsers on social media. Here are seven ways you can build your brand into one that customers brag about.

President Donald Trump’s tariffs—both proposed and in effect—have brought consumer confidence levels way down, and resulting higher prices could interfere with brand loyalty. But the situation creates some opportunities for brands to improve their customers’ experience and deepen their loyalty. Here are some tips to work with customers through the economic uncertainty.

QUIZ

Which musician announced last week that she has an anime series coming out on Amazon Prime Video?

A. Taylor Swift

B. Megan Thee Stallion

C. Chappell Roan

D. Charli XCX

See if you got the answer right here.