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Is Gen AI the solution to SG firms making marketing dollar cuts?

Is Gen AI the solution to SG firms making marketing dollar cuts?

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Singapore brands are seeking to drive efficiencies by deploying technology solutions that improve workflow efficiency (70%) and implementing generative AI (59%). This comes as brands in Singapore prioritise customer experiences to drive growth, but are challenged by reduced budgets, according to new research from Adobe.

To save on costs, organisations in Singapore are cutting their marketing and customer experience budgets – 28% have already done so, and 35% will in the next 12 months.

Don't miss: Will performance marketing outweigh brand marketing in a world of shrinking budgets in APAC?

In Southeast Asia, only 64% of brands across Malaysia, Singapore, and Thailand, are investing in technologies that improve workflow, and 56% are implementing generative AI.

Yet, the research suggests that formal business rollouts of generative AI among Singapore brands lag well behind consumer demand and employee usage.

Consumers in Singapore are excited by how generative AI can improve products and services (33%) and the customer experience (37%). Interestingly, 39% of Singapore consumers believe leveraging generative AI is necessary for businesses to remain competitive, as compared to 35% in SEA.

What’s happening in the workplace? 

In the workplace, a large majority (94%) of Singapore employees said they had already used generative AI in marketing and customer experience campaigns. This is contrasted by only 31% of Singapore respondents saying the company they work for currently uses generative AI tools.

Employees are using text-to-image generators to create promotional brand materials and content (58%), as well as develop concepts and mock-ups for campaigns (55%). Where conversational AI is concerned, half of employees (50%) use the tool for copy generation as well as research and insights.

Similarly, 95% of employees across SEA are leveraging generative AI tools in marketing campaigns, while only 42% of SEA respondents say their company is currently using generative AI tools.

“A large majority of employees across SEA are incorporating generative AI tools at work, underscoring an urgent need for organisations to get ahead of the curve in AI usage regulations and policies,” said Simon Dale, VP and managing director, of Southeast Asia and Korea, Adobe. “As generative AI technologies continue to evolve, an absence of a set of strong guardrails and AI ethics principles can pose risks to the organisation and even erode consumer trust.”

Where are Singapore brands failing?

Adobe’s research found that in a challenging economic environment, brand trust is a key determining factor for consumer spending. Almost half (46%) of consumers in Singapore said they are more likely to stay loyal to brands they trust, while 36% are more likely to spend more.

In a challenging economy, the number one factor in building consumer trust is keeping data safe and using it respectfully. This is followed by the provision of products and services that benefit people and the planet, and that are at the same time developed ethically. These factors are also likely to increase the amount a customer spends with a brand.

Conversely, a large majority (93%) of Singapore consumers say they will decrease spending with brands that do not keep their data safe and respect their privacy, including almost half (46%) that will refuse to spend at all. An inaccessible experience that does not support the needs of people with disabilities will also prompt 94% to spend less, while 80% will cut spending if a brand does not comply with sustainability regulations and requirements.   

Despite its impact on consumer spending choices, 43% of Singapore brands fail to see data safety as important to attracting and retaining customers. For accessible and sustainable products and services, that number rises to 50% and 49%, respectively.   

“Consumers are growing mindful of data privacy and how brands are delivering on sustainability and accessibility. To maintain brand trust amidst market shifts and evolving consumer behaviour, brands must demonstrate responsible practices and social accountability. This includes leveraging emerging digital technologies as a business advantage to not only improve engagement but also keep consumer data safe,” said Dale.

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