What is generative AI?
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Generative AI is a tool that can generate text and images in a broad array of styles and formats from simple text-based “prompts.” From creating a taco ad in the style of Salvador Dali to writing social copy for a new product launch, new generative AI tools can create sophisticated and personalized outputs quickly, pulling from a vast library of data about human language and aesthetic styles.
This makes marketing an arena where generative AI can drive massive transformation if implemented correctly. The ability to rapidly generate personalized, contextually relevant text and images offers the potential to achieve true personalization at scale for many marketing organizations. But the tools are not without their challenges and costs.
Is your organization ready to welcome generative AI as a creative partner in your next campaign? Here are five questions to consider first:
1. Which key benefits are you hoping a generative AI program will bring to your marketing organization?
Each organization’s needs are different, hinging on its specific goals, budget, and planning horizon. Before you begin implementing generative AI, be sure you are crystal clear on what success looks like for your business. Is your goal to:
2. How can generative AI help you keep the customer first?
Having a well-thought-out AI strategy that learns to adjust and interpret customer behaviors and desires in real-time will more likely be welcomed than rejected by your customers. To develop your AI strategy, consider these recommendations:
3. How can generative AI help you enhance and support the creative talent in your organization?
Use generative AI as a starting point for ideas instead of a final output for solutions. When tackling a challenging problem, AI can help creatives develop concepts to build on, but it shouldn’t replace creative jobs. Consider these recommendations:
4. How can you ensure that generative AI outputs will be trustworthy and ethical?
Customers should be able to trust that the data they share will be used ethically and without bias by organizations and the AI algorithms they employ. By focusing on AI bias and emphasizing AI ethics, companies can help protect customer data—while building brand equity and customer trust. Deloitte’s Trustworthy AI Framework offers these guiding principles:
5. How will you measure generative AI’s effectiveness in connecting with customers?
Quantity of output does not equal quality of results. A successful implementation will need to carefully think through what KPIs will be your best signal of successful integration. Here are a few steps you can take to assess impact:
Whatever your goals may be, implementing generative AI can have surprising impacts on many aspects of your organization. From delivering new operational efficiencies and helping your staff build new skillsets, to providing technology support or a new set of policy implementations, the opportunities are endless and you’ll need to have a clear and cohesive roadmap and change-management plan to ensure that your implementation is achieving its intended results.
As streaming video, social media, and social gaming blend together into a richer, more interactive media and entertainment landscape, industry leaders must throw out their old playbooks and create a flexible environment fueled by modern cloud-based technology. An agile platform can drive companies’ ability to create a new digital entertainment reality while still realizing profits.
Major entertainment providers will increasingly link up with gaming companies to capitalize on gaming’s immersive technologies and create new ways to interact with consumers. Media and entertainment leaders will look for innovative ways to combine streaming video, social media, user-generated content, and gaming to enable new business models and fundamentally reshape our definition of entertainment.
While the lines separating these categories will grow blurrier, one reality is crystal clear: This era of combining and redefining will require agility and resilience. Driven by evolving content creation, distribution channels, and monetization strategies, partnerships and mergers and acquisitions (M&A) will remain always in play—so media and entertainment companies need flexible systems and immediate access to data for faster, better decision-making.
Here are five truths that media and entertainment organizations must acknowledge to thrive in the face of constant disruption.
Streaming video, social media, and social gaming are reshaping the media and entertainment landscape, enabling new business models and fueling greater interdependencies between them.
The impetus for combining these channels comes from younger consumers, who have never known a world without digital content platforms and expect to be able to engage across them as seamlessly—or actually, more seamlessly—than they engage “IRL.” According to research from Bain & Co., nearly half of people between the ages of 13 and 34 would rather socialize with their peers in a video-game setting than in the real world. This will drive up gaming’s revenue, helping it to grow to almost 11% of overall media and entertainment spending by , nearly double where it stands today. And by , McKinsey estimates that more than 50% of live events could be held in the metaverse.
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As consumers spend more time engaging with content via nontraditional entertainment channels, they will demand a curated, streamlined experience. In fact, according to Accenture, 6 in 7 consumers globally want an all-in-one platform to simplify their entertainment experiences with video streaming, fantasy sports, social media, e-commerce, and more.
To be able to deliver these consumer expectations, organizations must consistently innovate and drive their digital strategy to become more agile as enterprises. However, a Workday survey found that only 23% of media executives categorized their businesses as leaders in digital growth and organizational agility.
Successful innovation requires sustained rigor—which is why more than half of organizations fail to meet their original transformation objectives, according to a report from Workday and MGI Research. “Firms that lack transformational excellence tend to underestimate the cost and complexity of transformational events, and rely on older, calcified systems that are hard to integrate and evolve,” the report notes. Meanwhile, companies that succeed use modern, cloud-based tools that allow them to “react to change with agility and execute transformations to achieve above-average outcomes at below-average cost.”
Even as the streaming video revolution has created a golden era of content, a hard reality remains: On-demand streaming is fundamentally less profitable than traditional television. Some reasons for this: Many streaming services are predominantly ad-free; many consumers selectively subscribe to only a small number of services; and a slew of new entrants to the “streaming wars” have been willing to operate without profits for years to gain customers.
But as streaming cancellations have increased and operational costs remain high, media and entertainment companies feel increased pressure to stay firmly in the black. To grow profitably, they’re prioritizing existing customers—with 63% of media firms anticipating a renewed focus on revenue retention, according to research from the Alexander Group.
Personalization is the name of the retention game with organizations vying to deliver relevant content and advertising via machine learning (ML) techniques that dig deep into customer behavior and demographics. New digital delivery and rapidly evolving subscription models will also continue to define the futures of media and entertainment companies.
“Organizations will rely on multiple revenue streams to drive profitability,” says Justin Joseph, Workday’s senior director of product strategy for communications, tech, and media. As a result, “they’re going to have to support and understand the pricing and automate [everything] to make sure they have the right touchpoints for each customer.”
To increase offerings in a way that meaningfully improves revenue growth, profitability, and customer satisfaction, media and entertainment companies need a platform that allows data to flow seamlessly from end to end. They need to go beyond billing and revenue management to understand the broader landscape that includes customer service and other elements—and they need to forecast continuously. Systems with artificial intelligence (AI) and ML functions can provide the key insights these companies need to make faster, data-driven decisions.
Increasing profitability in the streaming era requires a holistic approach that looks at every aspect of the business and uses real-time data to make better, more financially viable choices.
Increasing diversity, equity, and inclusion (DEI) in the media and entertainment industry is more than a moral imperative—it’s also an important way to drive profits. That’s because movies that lack authentic, inclusive representation underperform by about 20% of their budget at the opening-weekend box office, according to UCLA research, and films with fewer than 11% underrepresented actors perform the worst. On the other hand, strong representation can drive stronger sales, and 64% of consumers said a diverse or inclusive ad influenced their purchasing behavior, according to a Google survey.
To win the streaming wars—and, increasingly, the industry’s highest honors—media and entertainment companies need to produce diverse content that resonates with diverse audiences. They also need to demonstrate DEI progress to achieve an array of corporate priorities, from improved employee wellbeing and engagement to a strong ability to attract and develop talent. Future success hinges on companies’ ability to employ a diverse workforce and build inclusive internal cultures.
The media and entertainment industry acknowledges this reality and has made strides in recent years, but most organizations still fall short. In , the World Economic Forum (WEF) released a first-of-its-kind report benchmarking diversity and inclusion progress within media and entertainment. While TV and film outperformed news, magazines, and gaming, all sectors demonstrated significant room for improvement.
To continue driving lasting change, the WEF recommended that organizations use audience perceptions to identify shortcomings and set clear representation priorities, as well as connect DEI to clear, measurable key performance indicators. Accordingly, DEI requires the same data-based, technology-enabled approach that organizations use to monitor, track, and report on other corporate objectives. Yet 60% of companies report that recording DEI data is a challenge, according to Workday’s DEI survey—and 48% don’t measure the business impact and perceived value of DEI initiatives at all.
The good news is that executives know they can’t improve what they don’t measure, and 59% of respondents to Workday’s survey said they had seen an increase in DEI investment over the past year. Top-performing companies are investing in technology that allows employees to self-disclose relevant diversity data in a way that upholds privacy and regulatory compliance. Self-reporting creates a richer picture of an organization’s workforce by capturing more aspects of diversity in greater detail. The top tools that 37% of organizations report using are internal communication tools such as intranet, instant messenger, and chat, Workday’s DEI survey found.
As organizations embrace technology to drive DEI progress, their HR functions must also commit to diving deep into the resulting data, understanding it, and using it to create more accountability.
As media and entertainment executives confront unyielding industry disruption, they must be even more responsive as they react to changing market conditions and potential threats and opportunities.
One company that’s no stranger to transformative M&A activity, media conglomerate The E.W. Scripps Company credits its success to integrated HR, financial, and payroll systems.
“It’s important to make sure leaders have input on processes and have their voice heard in terms of the unique challenges it’s going to create for their area, and have everyone come together and agree, so you don’t have HR working in a silo from IT and from finance,” says Kevin McDonald, Scripps’ vice president of people services and insights.
Siloed systems are notorious opportunity killers because they create bottlenecks, trap critical information in spreadsheets, and render data stale. They’re also a major problem in media companies, as nearly 8 out of 10 C-suite executives surveyed by Accenture said that between 50% and 90% of their data is “unstructured and inaccessible.” Meanwhile, 57% of media executives agree that employees should have full access to data that would enable better decision-making.
Media and entertainment organizations must be able to operate at a new level of speed and agility, performing seamlessly in real time and quickly rewiring business processes when necessary. To keep up, these companies must adopt cloud-based platforms and AI-powered functional tools that enable digital transformation by providing a complete picture of financial, people, and operational information in a unified data core.
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