Marketers More Confident about their Generative AI Options; Abandoning Metaverse Plans
72% of respondents surveyed by Sitecore firmly believe that now is the best time to invest in generative AI tools such as ChatGPT.
The metaverse and generative AI technologies are now competing for attention and space in the annual marketing budgets in various industries. In a survey of marketers last year, 1 in 10 respondent had mentioned that they would spend between 26% and 50% on metaverse technology for marketing and advertising campaigns. These actions were in response to the customer behavior switching to the metaverse-like platforms for work, shopping, social networking and gaming. By 2026, 25% of people would use the metaverse to interact with digital worlds powered by immersive virtual content.
The important thing to note here: When these numbers were published, ChatGPT3 hadn’t arrived yet! Fast-forward to May 2023, the shiny fan-following of metaverse has disappeared and seemingly embraced the more potent and ROI-centric technology, called generative AI. Tools like ChatGPT3 and ChatGPT4 have clearly made more progress than metaverse technology, attracting marketers to quickly embrace new AI capabilities, found the new survey by Sitecore. The survey found that marketers are ready to remove Metaverse and Field Marketing from their budgets and allocate the funds to boost adoption of generative AI tools such as ChatGPT.
Recommended: 5 Ways to Use ChatGPT in Marketing and Sales
Sitecore data shows 3 in 4 marketers are considering or already using generative AI to personalize content, dig deeper into customer needs and improve the overall customer experience (CX). Would this have an impact on the overall spending in generative AI that displaces metaverse technology from marketing and advertising?
According to McKinsey’s June 2022 report, the economic value of metaverse varies greatly across different industries, with e-commerce providing the biggest ground for adoption in the current decade. By 2030, metaverse technology would be valued at $5 trillion, with an impact of $200 billion and $125 billion on the advertising and gaming industries respectively. Compared to these numbers, the market for generative AI technology is still in its very early phase, anticipated to grow from $11.3 billion in 2023 to $51.8 billion in 2028.
But then, metaverse is sliding in attention, paling in front of all the great things that are happening in the areas of generative AI and LLMs. Sitecore points to the charging momentum in ChatGPT adoption among the marketing and advertising professionals. While it has only been publicly available for less than six months, the generative artificial intelligence (GAI) platform ChatGPT has quickly gained momentum among U.S. business users, with more than 80% of marketers reporting they have experimented with the technology. Sitecore’s “AI & Composable Marketing Software Survey” report also found that many marketers are reallocating budgets away from planned metaverse investments toward GAI. So, will generative AI replace metaverse from marketing and advertising budgets in 2023? What kind of contraction would metaverse economy witness if Generative AI tools become more powerful and easily accessible to business consumers?
Let’s explore more on these areas.
Impact of ChatGPT on the Marketers
ChatGPT is a state-of-the-art language model that uses machine learning to generate text that sounds like a human wrote it. In its current form, marketing technologies (Martech) used by the modern marketing and advertising professionals can handle generative AI in some way or the other, with a majority using it to write contextual content, build CX ad copies and write outbound sales emails.
Sitecore found that 80% of marketers that were surveyed for the report have already experimented with ChatGPT-like tools. While 79% of marketers consider AI as a key component in their Martech investments, three in four marketers are considering or currently investing in AI to support marketing and CX, with 78% stating their belief that GAI will get them closer to their desired CX through greater personalization (75%) and the ability to get a deeper understanding of customer needs (74%).
Ahead of the announcement, I spoke to Sitecore’s Chief Product Officer, Dave O’Flanagan.
Here’s what Dave had to say about the changing role of AI and the emergence of generative AI tools such as ChatGPT in Marketing and customer experience management.
Hi Dave, marketers seem to be the fastest to ChatGPT adoption. Is it their creative hunger or desperation to catch up with Data Scientists when it comes to making it big with generative AI tools?
Dave: It’s certainly not a desperation to catch up – it’s an exciting push to quickly integrate and start realizing the benefits of gen AI.
While ChatGPT has only been publicly available for less than six months, our recent survey shows that more than 80% of marketers have experimented with the technology. And that’s because marketers know that if they harness this technology correctly (and transparently) it can help them get a deeper understanding of customer needs and quickly get them closer to greater CX personalization.
How do Generative AI tools like ChatGPT fall in the mix of modern CMO’s marketing solutions for customer experience management?
Dave: It’s a tool that certainly should be added to the marketing portfolio, but its addition requires care and diligence. Before integration, marketers must clearly define how they’ll use it, how they’ll measure its performance and how they’ll communicate its use to customers (as we know consumers want transparency on how AI is being leveraged). It can certainly create measurable impact on marketing campaigns, and we believe AI assistance has the potential to dramatically improve customer service and overall customer loyalty.
GAI developments are happening incredibly fast, and marketers want to know that their technology can handle the AI demands and costs required to maintain growth. We anticipated this need and our new OpenAI integration provides marketers the ability to integrate GAI across our entire portfolio of composable software solutions, giving them language-based AI capabilities at every level of their martech stack.
Do you think Gen AI tools would be perfect catalysts in the Web 3 economy? Or, has web 3 fallen behind the race amid all the talks about GAI developments taking chunk of budgets this year for major brands?
Dave: Web 3 seems to be losing momentum and we’re seeing GAI platforms (like ChatGPT) quickly eclipse Web 3. In fact, our recent survey found metaverse projects have fallen behind GAI, as AI is the top investment priority for 79% of marketers. Furthermore, two in five marketers reported reallocating budget from metaverse projects to support AI deployments.
What are the benefits of using ChatGPT tools for customers from the Gen Z segments?
Dave: Our Brand Authenticity Report found that 70% of consumers crave a deeper connection with their preferred brands. Gen Z and millennial consumers, in particular, desire deeper digital connections with their brands of choice. GAI’s near mastery of conversational language enables brands to offer a customer service chatbot feature that closely mimics a customer service interaction with a human agent. As a result, many will opt for AI customer service which reduces the strain on human agents, reduces the long wait times that are a perpetual irritant for consumers, and provides an enhanced overall digital experience. This is just the tip of the iceberg, or one example from a plethora of potential benefits for brands who leverage AI-powered tools.
How does a CX-centric company like Sitecore prepare for the road ahead with GAI deployment? What measures are you taking to help marketers quickly pivot AI tools in the virtual world?
Dave: We recently launched a full-scale integration of OpenAI across our entire portfolio of composable software solutions, enabling brands to leverage language-based AI capabilities at every level of their martech stack. The OpenAI integration is a game changer for marketers, who despite confidence in their stack’s ability to integrate AI (77%), expressed concerns over the cost of implementations (45%) and system modernization needs (26%). Our integration effectively alleviates both concerns. By partnering with Sitecore, marketers have all the advantages of fully composable digital experience software, with the added benefit of OpenAI at every rung of the martech stack’s ladder.
Within our integration, the new AI-powered website search feature is particularly helpful from a CX perspective. According to our research, 54% of marketers have noticed changes in consumer search patterns. Our new AI-powered search feature can effectively recognize and respond to a wider variety of consumer keywords, phrases, and prompts. As a result, we’ve experienced 25% higher click-through rates since implementation.
Dave added, “The recent rate of innovation in marketing technology has been truly remarkable. Rather than becoming overwhelmed and exhausted by these advancements, however, we’ve found marketers to be bold and experimental in embracing technologies like ChatGPT. Unlike other platforms that have been challenging to implement, generative AI shows promise in not only being relatively easy to integrate into composable software offerings and wider martech stacks, but also quick to have a measurable impact on marketing campaigns.”
GAI platforms like ChatGPT have quickly eclipsed other recent technologies heralded as the next big thing for marketers. Last year, the metaverse had marketers scrambling to stake a claim in the virtual world. Today, however, it appears to be losing momentum.
Metaverse-like technologies are still popular but falling behind AI and digital experience software projects
72% of respondents surveyed by Sitecore firmly believe that now is the best time to invest in generative AI tools such as ChatGPT.
Sitecore’s 2022 Perceptions of the Metaverse report found that more than half (56%) of marketers had invested in “metaverse-like technologies.” This recent survey found metaverse projects have fallen behind AI (79%) and digital experience software (56%) as a top priority, with just more than a third (36%) of respondents ranking it as the most important. Additionally, two in five (38%) reported reallocating budget from metaverse projects to support the deployment of AI.
- Keeping up with the Competitors: 38% of respondents agreed that seeing their competitors use generative AI has actually convinced them to invest in these frontier capabilities. If asked to remove budget from other divisions, marketers are more likely to choose Metaverse (38%) and Field Marketing (38%) to do so.
- Benefits to Customers: Customer service is considered the top function that will benefit most from AI assistance (24%), with improved customer loyalty among the primary objectives of AI deployments. To fund these deployments, two in five (39%) respondents said they planned to invest 21-40% of the following year’s budget into AI programs.
- Marketers Quick to Pivot: While martech trends have flooded marketing teams in recent years, nine in ten remain excited about learning about – and implementing – new technologies (88%). However, quickly pivoting among new technologies has resulted in budgetary headaches for three-quarters of all marketers (76%), who admit to continually shifting budgets to accommodate investments in new martech functionality.
- Brands March Forward – Cautiously: While 77% of marketers said they were confident their martech stack was equipped to leverage GAI, concerns remain. Chief among them were the cost of implementation (45%), data privacy vulnerabilities (41%) and required system modernization (26%).
- Creativity will Improve with AI: 64% of marketers think AI will help them meet customer expectations by delivering creative customer experiences. 67% agreed to using AI to create a steady stream of relevant content and 53% of marketers chose AI as a means to streamline the back-end operations.
The survey was designed to determine marketers’ interest in GAI, the opportunities for GAI to disrupt current CX strategies and what backend technology would be needed for a successful GAI deployment. More than 400 brand marketers took the survey online between March 17-30, 2023.
The Metaverse and generative AI tools such as ChatGPT could play an important role in the current Creator Economy, helping marketers create a more immersive and “stickier” content with AI-engineered algorithms. Earlier, Sitecore had mentioned that a whopping 90% of the marketers agree that the Metaverse — if built correctly — can help solve unique business challenges. With AI in the mix, this combination could creating winning marketing strategies for the CX-centric brands.
Building a metaverse ecosystem could become easier and more customer-centric with generative AI tools, bringing creativity and efficiency to the virtual world entertainment and engagement. From using AI to create personalized and gamified avatars to building an immersive dynamically-designed brand storytelling platform, bringing metaverse and generative AI together in marketing and advertising would be the biggest game-changer for brands in 2023. While we are still scratching the surface of GenAI for marketing and advertising, having a CX-centric strategy that pivots the metaverse and AI could help reduce the dependence on human creators for performance marketing.
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