Klarna slashes marketing spend by 11% thanks to AI

Klarna has revealed has cut its sales and marketing spend by 11% in Q1 this year, despite increasing the number of campaigns.

Thanks to AI, the online payments app decreased its spending on external marketing suppliers by 25%, including translation, production, CRM, and social agencies while running rate savings of $4 million.

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The company also cut image production costs by $6 million in its first quarter having tapped AI tools such as Midjourney, DALL-E, and Firefly for image generation and Topaz Gigapixel and Photoroom for final adjustments.

This move saved Klarna $1.5 million in the first quarter of the year, it revealed.

Using Gen AI, the company added it has reduced the image development cycle from six weeks to just seven days, which includes checks for brand consistency, image quality, and legal compliance.

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

“We’re actually driving more marketing activity while saving tens of millions of dollars a year.”

Meanwhile, the streamlined process also enables weekly updates to Klarna’s app and website images, reflecting key events such as Valentine’s Day, Mother’s Day, Spring refreshes, Graduation, and Summer Sales.

He added: “Traditionally, it would have been very costly to cater to these occasions with bespoke imagery but with AI that is no longer an issue and we can create relevant imagery to support practically any event. Essentially, we have removed the need for stock imagery.”

The news comes as the payment app recently revealed its OpenAI assistant is doing the equivalent work of 700 full-time agents following its launch in March.