Generative AI (GenAI) is a branch of artificial intelligence that creates content such as text, images, and videos by learning patterns from large datasets. It uses advanced algorithms, particularly large language models, to generate new data based on user prompts. So why are the majority of organizations stuck with low ROI for GenAI?
- Generative AI (GenAI) ROI Concerns: Experts highlight high spending with insufficient returns, but research and experience suggest otherwise for fully enabled organizations.
- Research Findings:
- Coleman Parkes study: Organizations using GenAI for advanced applications see strong ROI.
- 2024 AMA study: 85% of marketers report GenAI boosts productivity, with half noting time savings and improved creative content quality/quantity.
- Barriers to Productivity Gains:
- Most organizations limit GenAI to basic tasks (e.g., copyediting, text creation, video production).
- Advanced use cases (e.g., personalization, customer satisfaction, predictive analytics) yield higher ROI but are underutilized.
- Leadership Knowledge Gap:
- Many CMOs and marketing leaders lack full understanding of GenAI’s potential, hindering adoption (per Coleman Parkes study).
- Training and Development Needs:
- Marketers must combine creativity with data skills to leverage GenAI effectively.
- Initiatives like #MyFocusFridays and workshops (e.g., ANA’s creative problem-solving) foster skill-building and innovation.
- Governance Challenges:
- 61% of survey respondents cite data security/privacy as a top concern.
- Only 1 in 10 companies have a robust governance framework, risking fines, reputational damage, and loss of trust.
- Solution: Establish a center of excellence to create policies with legal teams, balancing innovation and safety.
- Cultural Shift for Innovation:
- Marketing leaders must encourage experimentation and risk-taking to foster innovation.
- Create a safe environment for idea-sharing and learning from failures, drawing parallels to lessons from competitive figure skating.
- 2025 Outlook: With proper training, governance, and a culture of innovation, GenAI can transform marketing productivity and customer experience.