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2023’s CMO: Report shows AI, social toxicity, and data privacy forge the future of marketing

by | Dec 20, 2022 | Marketing, Public Relations

With budget cuts, data analysis challenges, and increased consumer skepticism plaguing marketing leaders throughout a tough 2022, CMOs continue to face mounting scrutiny over their operations. What challenges does 2023 hold? Business insights firm Gartner offers valuable insights with its top five predictions that marketing leaders must incorporate in their strategies in 2023 and beyond to drive results and regain the confidence of business leaders.

“Against a backdrop of unrelenting social and economic pressures, marketing leaders look toward a future where smarter marketing leads to deeper, more valuable connections between customers and brands,” said Andrew Frank, VP analyst in the Gartner Marketing practice, in a news release.

“From managing misinformation to ensuring effective first-party data collection, this year’s predictions prioritize the trends that marketers and advertisers can no longer afford to ignore,” Frank said.

The top five predictions for marketing leaders are:

By 2027, 80 percent of enterprise marketers will establish a dedicated content authenticity function to combat misinformation and fake material

The proliferation of generative AI and user-generated content will dramatically increase the volume and variety of content brands must monitor. Proactive reputation management is critical, but scanning for inaccurate or defamatory content at scale in real-time is increasingly difficult in a polarized and high-velocity landscape.

2023’s CMO: Report shows AI, social toxicity, and data privacy forge the future of marketing

“The advancement in the scope and sophistication of misinformation creates a growing concern for CMOs,” said Chris Ross, VP analyst at Gartner, in the release. “Just as AI and other technologies contribute to the content problem, they will also be part of the solution, especially when complemented with dedicated teams that listen, engage, and escalate brand interests across the digital content ecosystem.”

By 2025, 70 percent of enterprise CMOs will identify accountability for ethical AI in marketing among their top concerns

Privacy-related restrictions on data collection, economic pressures, and AI breakthroughs are driving marketing teams to rely more heavily on AI and machine learning to optimize campaign performance and lower costs.

Simultaneously, regulators and advocacy groups are vocalizing concerns about manipulative and biased uses of AI through developments such as the AI Act in the EU or the AI Bill of Rights in the U.S. Several brands have come under fire over their use of advanced technology to influence consumers in creepy and inequitable ways.

2023’s CMO: Report shows AI, social toxicity, and data privacy forge the future of marketing

“Marketing is uniquely positioned to understand the superior CX AI affords as well as its trust and reputational risks,” said Frank. “This puts the onus on marketers to address the ethical issues that AI is raising in their practices, and the impetus to do so must come from the top.”

By 2024, 70 percent of brands will redeploy at least 10 percent of their media budget to product placement in entertainment content

Consumers with means are working harder than ever to avoid online ads: Gartner anticipates that by next year, 85 percent of consumers with household incomes above $120K will pay for entertainment subscription tiers, software, hardware or mobile devices that allow them to avoid advertising entirely.

“The game of cat-and-mouse has become very expensive,” said Kate Muhl, VP analyst at Gartner, in the release. “Brands pay top dollar to reach high income consumers via digital advertising, but such impressions become less meaningful as this audience figures out new ways to tune them out. Marketers who cling to traditional digital ad formats will increasingly reach an audience composed largely of digital have-nots.”

2023’s CMO: Report shows AI, social toxicity, and data privacy forge the future of marketing

Instead, brands that shift budgets toward product placements in entertainment content such as streaming TV will persevere: Two-thirds of the 301 consumers surveyed in October 2022 said they prefer this format rather than seeing separate ads.

One-in-three businesses without a loyalty program today will establish one by 2027 to shore up first-party data collection and retain high-priority customers

At present, loyalty programs are most prevalent in the travel, hospitality and retail industries. However, there are opportunities in other verticals, such as banking and consumer packaged goods. Only 36 percent of 1,068 brands Gartner analyzed in 2022 had a loyalty program.

Effective loyalty content generally drives higher open rates than non-loyalty emails, improving wallet retention and growth among high-priority customer segments. By 2023, both B2B and B2C companies will increase their investments in loyalty programs as a percentage of their total marketing budget.

2023’s CMO: Report shows AI, social toxicity, and data privacy forge the future of marketing

“The competition for customers’ attention and first-party data will increase as more companies launch and revamp loyalty programs,” said Brad Jashinsky, director analyst at Gartner, in the release. “CMOs running best in-class loyalty programs will elevate their approach beyond transactional benefits and recognize personalization as a critical differentiator.”

By 2025, organizations that use AI across the marketing function will shift 75% of their staff’s operations from production to more strategic activities

The use of AI in marketing operations will reduce friction and eliminate redundancy, allowing marketers to shift their budgets and resources to activities that support a more dynamic marketing organization.

For example, marketers can leverage AI in the creative process to automate the capturing, processing, and analyzing of real-world images and videos, improving image quality and developing digital twins. “AI will continue to refine marketing operations processes to drive more agile, data-based responses to the challenges ahead that have no signs of slowing down,” said Nicole Greene, senior director analyst at Gartner, in the release.

2023’s CMO: Report shows AI, social toxicity, and data privacy forge the future of marketing

Gartner clients can download the report here. A free download is available in the associated eBook.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter

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