Klarna Using GenAI To Cut Marketing Costs By $10 Million Annually

Fintech firm Klarna, one of the early adopters of generative AI said on Tuesday it is using AI for purposes such as running marketing campaigns and generating images, saving about $10 million in costs annually. From a report: The company has cut its sales and marketing budget by 11% in the first quarter, with AI responsible for 37% of the cost savings, while increasing the number of campaigns, the company said. Using GenAI tools like Midjourney, DALL-E, and Firefly for image generation, Klarna said it has reduced image production costs by $6 million.

Brawndo, it's got electrolytes!

[LazarusQLong]

"Brawndo, it's got electrolytes!," marketing brought to you by AI.

Re:

[blue trane]

Did we just spot the marketing worker confronting the idea that a high basic income is their best hope?

What are they measuring

[schwit1]

To know if they are getting as good or better results with AI?

Re:

[blue trane]

Does number go up?

Re:

[93 Escort Wagon]

To know if they are getting as good or better results with AI?

The bonuses allocated to them by the board.

Re:

[Nrrqshrr]

As the saying in marketing departments goes: "We know that half our marketing budget is wasted, we just don't know which half."

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[unrtst]

What are they measuring to know if they are getting as good or better results with AI?

Seriously! And the numbers are so bonkers I wonder if they're measuring any of the savings or budget correctly. Sounds like AI wrote the (very short) article!

The company has cut its sales and marketing budget by 11% in the first quarter, with AI responsible for 37% of the cost savings

37% of 11% = 4.07%
IE: AI cut the cost of sales and marketing by 4.07%

it is using AI ... saving about $10 million in costs annually

Is $10mil the 4.07% of sales and marketing that was saved, or a totally different bucket of money?

Using GenAI tools ... Klarna said it has reduced image production costs by $6 million"

OK, is this figure, $6mil, the same as the "AI responsible for 37% of the cost savings"? Beats me. Do any of these numbers have any relation to one another?

If the $6mil in savings represe

Re: What are they measuring

[ISayWeOnlyToBePolite]

I believe they're talking about the total budget change (-11%) and that's affected by the cost savings listed but also cost increases which are not listed. The original press release on which the article was based https://www.klarna.com/interna... [klarna.com] which I'm quite sure was checked by one of the best compliance departments money can buy being a publically traded company.

Re:

[unrtst]

Apologies in advance. I know I'm just grumbling about stuff I don't even care about, and I don't know why I found these press releases so frustrating.

It still seams like a meaningless press release. Few, if any, of those figures can be directly related to one another.

* AI helps Klarna cut marketing agency spend by 25%
* Klarna has cut its sales and marketing spend by 11% in Q1 2024
* AI is responsible for 37% of the cost savings, or about $10 million on an annualized basis.
* Klarna has decreased its spending

Re:

[ISayWeOnlyToBePolite]

I think you're overthinking this. I've only had a cursory look but to me it reads like a plea for some AI valuation of the company. Throw som numbers at the market and hope something sticks.

Quelle surprise

[zeeky boogy doog]

You thought techbros and beancounters hate paying minimum wage to replaceable slave-drones?

I'll tell you the only thing they hate more: Paying a professional's wages and benefits to people who aren't interchangeable drones.

Mudder and Fodder

[Tablizer]

Russia would probably send humans in lead suits to do the work. Many died of radiation poisoning to rush their first nukes. Russia has always had a habit of throwing "disposable" humans at a problem.

Putin's latest recruiting gimmick for the Ukr. war is to promise a juicy bonus to middle age men. But they are sent to the very front lines where most die such that the state doesn't have to pay the bonus. (Widow gets less.) Their real job is to expose the Ukr. gunner positions by charging their direction and be

Re: Quelle surprise

[SuperDre]

Well looking at the cost they saved by using AI instead of 'professional' and apparently the marketing works just as good if not better as using those humans.

What's the long term strategy?

[Mordain]

After they make all the graphic artists and web designers redundant and they move on to other careers, who will be left to make new content for the AIs to copy? Things will be a bit uniform eventually me thinks

Re:

[oumuamua]

Glad you asked, the long term strategy is post-scarcity society where robots do all the work. We are now in the painful transition where we try to stick with the old framework while jobs get automated. However, if AI keeps improving as it has it may only be as short as 5 years.
Question: How will the economy work if everyone loses their jobs:
Answer: https://www.youtube.com/watch?... [youtube.com]
And if that does not work out, and no UBI, you and your out of work friends can harness AI to feed yourselves: https://www.ge [genolve.com]

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[iAmWaySmarterThanYou]

5 years to turn next word guessing LLM into AGI despite LLM not being the right underlying tech for AGI?

Don't plan your retirement on that.

Re:

[Junta]

Of course, one issue is that it won't be post-scarcity, it'll be (sort of) post-*labor* scarcity. A lot of important resources are scarce. Including land, making the "buy an automated farm" a challenge, since there's only so much of that to go around.

We still will have some things that society will demand to be human based. A lot of the entertainment industry, child care,legal and political jobs for example are explicitly desired to be human based, no matter how 'capable' the AI technology becomes. This w

Re:

[blue trane]

"there's only so much of that to go around."

If there are 4.6 billion acres of arable land in the world, and if an acre can sustain at least 10 people using primitive, natural farming techniques (see Masanobu Fukuoka's pesticide, fertilizer, and petroleum-free farming that produced yields comparable to his industrial farmer neighbors), is there actually more than enough land to go around and only politics, not physics, is pushing scarcity upon us?

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[Bill, Shooter of Bul]

Klarma not exactly looking to break trends or do anything new. In any case, prompt driven creation results in very unusual designs already as is. is the messed up content it creates bad? better? just different? It might be enough.

Ho hum.

[Petersko]

Well sure. Makes perfect sense. Why wouldn't you give that a shot? Any company with substantial marketing costs absolutely should be trying out these adjustments. It would be really foolish to ignore the easy savings. If it doesn't pan out, they can correct next cycle.

What are hey gonna use it for?

[PCM2]

Hey Klarna, what are you going to use that extra $10 million for? You know, the $10 million that just got added to your budget that you didn't have last year?

What's that you say? You say you don't have an extra $10 million and you're being forced to make these cuts because your business isn't doing so well and the money isn't coming in?

Re:

[mjwx]

Hey Klarna, what are you going to use that extra $10 million for? You know, the $10 million that just got added to your budget that you didn't have last year?

What's that you say? You say you don't have an extra $10 million and you're being forced to make these cuts because your business isn't doing so well and the money isn't coming in?

Whoda thunk that offering finance to people unlikely to pay it back, especially at extortionate rates they couldn't afford wasn't a good business model?

Bullshit

[The Cat]

Ain't no fintech firm on the planet spending seven figures on images every year.

Fragrant bullshit.

Re:

[Bill, Shooter of Bul]

I wouldn't be surprised if they were. on direct labor, management, equipment and marketing decisioning making. You cant waste time with meetings if you've fired all the people who argue about shades of purple.

Re:

[DamnOregonian]

Why not? There are fintech firms worth tens of billions of dollars.

PROFIT

[darkain]

1) Stop all spending on marketing
2) Put out press release about how "AI" is improving your marketing
3) Said press release is published all over the place for free, because "AI"
4) PROFIT!

There isn't even an unknown in this one!

More drivel from a company we already should avoid

[KreAture]

From personal experience I find Klarna to be a company that hides financing contracts in simple purchases where you expect them to just be the card transaction processer. Then they do not communicate with seller and steamroll you for already returned goods and cancelled purchases. Avoid! At least their ads will be even easier to avoid once ai makes em all meaningless repeating drivel.

Who?!?

[Fly Swatter]

So they do marketing campai... So more automated Spam, that's great. Describing them as FinTech means nothing to me. Looks like they are a buy now pay later business model.. Sounds like a company that you should avoid like the plague and then no one will miss them when they go under taking all the startup money with them.

Countdown to copyright infringement

[trawg]

How long before their pet "AI" regurgitates some design that is clearly infringing on copyright (or even better, trademark) and it results in a lawsuit? Yeh sure, OpenAI indemnifies users against at least some of this kind of thing but I cannot see that lasting once these cases pick up.

in other words

[a7sharp9]

company shrank its bullshit-generating expenses by employing automatic bullshit generators

we can only hope that the LLMs have enough time to nuke the industry of the so-called "marketing specialists" before croaking the same way as all the "X, but on the blockchain" startups

Specious rubbish generation

[dubist]

I guess if your entire business is generating specious rubbish then using an AI would be an advantage..

Hmmm

[kaatochacha]

Can we assume Generative AI chose the absolutely stupid name "Klarna", which sounds like a mashup of "Clown" and "Karma"?