Gartner Study: Marketing Budgets dipping. AI the savior?

MarketingHQ is back with more meaningful insights! This week, we have a massive martech change to the big-red streaming behemoth. There are also plenty of AI headlines, as we’ve come to expect.

Martech News & Analysis

1. Netflix's ad-supported tier has reached 40 million monthly active users. Almost half of new signups are now for this less expensive option. Alongside this ad revenue comes a change in programming philosophy, with live football games and professional wrestling moving to the streamer. They are even launching their own ad tech platform. But that doesn’t mean they want a free-for-all approach. Netflix’s President of Advertising, Amy Reinhard, spoke at an Upfront presentation, saying, “We’re being incredibly strategic about how we present ads because we want our members to have a phenomenal experience. We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”

2. It appears that marketing budgets are dipping, and, as with so many headlines in 2024, GenAI is being labeled as the savior. Gartner’s latest research suggests marketing budgets are down from 9.1% of total company revenue in 2023 to 7.7%. That’s in the face of ever-rising paid media spending—which is now sitting at 27.9% of 2024 marketing budgets. CMOs are saying that GenAI might be able to compensate for the 15% budget drop, but one wonders if that’s the case when everyone’s competitors will be doing the same thing. And then there are the long term implications of relying on GenAI to meet yearly targets. As content output potentially increases despite dropping budgets, there will likely be little incentive to bring those budgets back up.

3. Google is now rolling out its AI-generated overviews in the US, and marketers are generally unhappy with the change. Once known as Search Generative Experience, this platform led to a 20 to 60% drop in organic traffic for publishers during its beta run last year.

Google’s own announcement of expanding its Gemini language model is predictably quite sunny. The key feature is the improved functionality of its AI overview, which synthesizes information to answer questions. That undermines a huge swath of bread-and-butter SEO tactics. The overall implications will radically change the way many companies do content marketing—with Ziptie research saying the GenAI answer covers 82% of queries. In the beauty industry, that number leaps to a shocking 99%.

Marketing Career Opportunities

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Until Next Time…

That's it for this week’s Through the Funnel. Until our next edition, keep yourself informed on the last news and browse marketing career opportunities at www.marketinghq.io.

Happy hunting!

- The MarketingHQ Team