Klarna has reduced its sales and marketing spend by 11% in the first quarter of 2024, despite increasing its number of campaigns and marketing updates.
The financial services company said artificial intelligence is responsible for 37% of the cost savings, which equates to about £7.8m ($10m) on an annualised basis.
Its spending on external marketing agencies has been cut by 25% with run rate annual savings of £3.1m ($4m). Services affected by the spending decrease include production, CRM and social agencies.
Alongside cost reductions to external agencies, the payments brand has saved £4.6m ($6m) annually on its image production costs through the use of AI. Generative AI tools like Midjourney, DALL-E and Firefly have saved Klarna £1.1m ($1.5m) in Q1 2024 alone.
Generative AI has created more than 1000 images in the first three months of this year for the brand, and reduced the image development cycle from six weeks to seven days. This includes checks for brand consistency, image quality and legal compliance.
David Sandström, chief marketing officer at Klarna, 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."
The streamlined process enables weekly updates to Klarna’s app and website images, reflecting key retail events such as Valentine's Day, Mother's Day, spring refreshes, graduation, and summer sales.
Sandström 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.”
Campaign asked Klarna how cuts caused by AI would affect staff numbers. The brand said: "Things that previously took people a lot of time can be done much faster and much shorter with the help of AI. For that reason we have paused actively recruiting. The majority of open roles are engineering, and others may be backfilling."
Klarna is also using AI to drive savings in writing its marketing copy. Klarna has built an AI-powered copywriting tool, “Copy Assistant”, which uses AI for 80% of all copywriting.
In a close partnership with OpenAI, Klarna employees across the company have built more then 300 AI models for internal use.
The payment brand's previous work includes "That's smoooth" starring Paris Hilton (pictured), created in-house with Hilton’s media company, 11:11 Media.
Klarna appointed Mediacom as its global retained media agency in 2022.
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