Klarna uses AI to save $10M on marketing annually while upping output

Dive Brief:

Klarna’s use of artificial intelligence was one of the ways the company was able to reduce its sales and marketing spend by 11% in Q1 2024, despite running more campaigns and creating more marketing materials, according to a press release.
The Stockholm-based fintech has decreased spending on marketing suppliers by 25%. For image generation and editing, it saved $1.5 million in Q1 by using generative AI tools like Midjourney, DALL-E and Firefly, reducing the image development cycle from six weeks to seven days.
Klarna's decreased costs and increased efficiency speaks to what many marketers have looked to achieve by adopting generative AI in their operations. The company has a close partnership with industry leader OpenAI.

Dive Insight:

Klarna — which launched a personalized shopping feed powered by artificial intelligence last year — is seeing significant positive results by using the buzzy technology in its marketing functions. More than one-third (37%) of the company's marketing savings in Q1, about $10 million on an annualized basis, are attributable to AI.

“AI is helping us become leaner, faster and more responsive to what our customers care about, leading to a much, much better experience,” said CMO David Sandström in the press release.

Klarna has decreased its spending on external translation, production, CRM and social agencies, with a run rate savings of $4 million, and saved an additional $6 million in image production costs despite running more campaigns and creating more images. The company generated more than 1,000 images in the first quarter and AI has helped it streamline updates to its app and website around retail events such as Valentine's Day and Mother's Day. AI has removed the need for stock imagery, Sandström said.

Klarna also uses generative AI for 80% of all copywriting, using an internal AI tool called Copy Assistant. There are a dozen AI-driven projects within the company's marketing department and more than 100 across the organization. Nearly nine out of 10 employees (87%) use generative AI in their daily work.

The company is among the growing number of marketers and ad platforms looking to adopt generative AI in their operations and products, from Meta and Google to Coca-Cola and Estée Lauder. Similar to Klarna’s successes, Ally Financial last year said that a proprietary large language model helped make its marketing operations more efficient.

Klarna boasts a close partnership with OpenAI, with the tech company's chief operating officer, Brad Lightcap, noting that the fintech is at “the very forefront” of practical AI adoption. With more than 37 million U.S. users, Klarna is reportedly preparing an initial public offering.