For insights, the recent CMO Survey —the longest-running noncommercial survey for and about the field of marketing, conducted since 2008 — sampled more than 300 marketing leaders at for-profit U.S. companies. It found that the return on AI investment varies depending on adoption time, the company’s digital transformation stage, and its level of experimentation with artificial intelligence. In an online article for MIT Sloan Management Review, Christine Moorman, a professor at Duke University’s Fuqua School of Business and the founder and director of the CMO Survey, and Colleen Hickey, an MBA student at Fuqua and research fellow at the survey, wrote about their findings. When respondents rated how the use of AI in marketing has affected outcomes, the results showed gains in three areas: a 6.2% increase in sales productivity, a 7.0% increase in customer satisfaction, and a 7.2% decrease in marketing overhead costs, on average. But the researchers found that returns don’t follow a linear trajectory over time: Payoffs accelerate once companies gain a full year’s experience deploying AI models, weaken from years 2 to 5, and accelerate again after five years. Why? During the first full year, many companies deploy minimum viable products and demonstrate ROI to secure the budgets necessary to scale AI projects. Having established executive sponsorship and investment for expansion, they set up AI competencies, such as more data models for different use cases and machine learning operations capabilities, while monitoring and retraining AI models. These efforts flatten positive returns in years 2 through 5 — but payoffs eventually trend positive, doubling by year 5. Although gains might not be realized upon AI’s initial adoption, the growth potential of these payoffs soars over time. Read Moorman and Hickey’s article “When AI Investments Pay Off in Marketing” at sloanreview.mit.edu/x/65408.

How Long for AI to Pay Off?

525,740,589,62,1257,1622

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is the World's largest and fastest growing self-service, cross-platform digital newsstand with over 88 million users since its inception in 2011 and thousands of magazines and newspapers across 40+ categories and 60+ languages. Headquartered in New York, Magzter has its local presence in Amsterdam, London, Mexico City, Chennai, Mumbai, New Delhi, Bengaluru, Singapore, and will soon be expanding to other countries. Founded by global entrepreneurs, Girish Ramdas and Vijay Radhakrishnan in June 2011, Magzter enables magazine and newspaper publishers around the world to create and deliver digital editions of their titles to global consumers.

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{{magzter}} is the World's largest and fastest growing self-service, cross-platform digital newsstand with over 88 million users since its inception in 2011 and thousands of magazines and newspapers across 40+ categories and 60+ languages. Headquartered in New York, Magzter has its local presence in Amsterdam, London, Mexico City, Chennai, Mumbai, New Delhi, Bengaluru, Singapore, and will soon be expanding to other countries. Founded by global entrepreneurs, Girish Ramdas and Vijay Radhakrishnan in June 2011, Magzter enables magazine and newspaper publishers around the world to create and deliver digital editions of their titles to global consumers.