The future belongs to brands that invent, not just optimise

You might be forgiven for thinking that geopolitical turmoil and evaporating economic confidence are good reasons for a brand to hunker down and focus only on what’s working, rather than finding alternatives. Consumers certainly follow this pattern, becoming more risk-averse when faced with a recession.

But bold brands see tricky financial situations as a prime opportunity to experiment and stand out from their rivals. Smart CMOs bet on innovation in many guises – new products, creative approaches and fresh brand strategy – believing it will deliver growth in a volatile market.

That’s a key theme running through the findings of our Dentsu Creative CMO Report, conducted among almost 2,000 senior marketing decision-makers across 14 markets.

Today’s marketers are embracing experimentation to get ahead, conscious that the older levers of growth are no longer working as hard as they once did, and that they can no longer pay to interrupt or optimise their way to long-term effectiveness. 

Innovating away from the algorithm

The good news is that a large majority of marketers expect their budgets to increase over the next 12 months. This is true of respondents in all regions studied: for instance, 87% in North America and 86% in Latin America, although falling to 71% in EMEA.

It’s also worth noting that 72% of CMOs feel economies around the world will improve; another nod to the optimistic outlook required to think bigger and bolder about brand strategy.

With this in mind, marketers are keen to move beyond the tried-and-tested methods of the past. More than three-quarters (79%) agree that “optimising for the algorithm risks creating a sea of sameness”. In other words, the repetitive rhythm of optimising for trends largely beyond a brand’s control increases the risk of getting lost in the noise.

So, it’s instructive that almost as many respondents (70%) plan to spend a fifth (20%) or more of their budget on innovation. In total, 40% predict they’ll allocate 20% to 30% of their budget.

This is a sharp increase from 28% when the study was previously conducted in 2024. Strikingly, 90% say that they want to see innovation deployed against their most urgent business challenges. They won’t treat finding new ways to build brands, create culture or capture demand as a side project. With disruption accelerating at an ever-increasing pace, businesses must keep up.

What innovation looks like to marketers

The definition and role of innovation vary depending on where marketers work, both in terms of business type and region.

For almost half of the respondents (45%), innovation means a fundamental transformation of the business model. For others, it’s a lighter touch exploration of what’s possible (35%).

While 42% focus on innovation to surprise and delight customers, another 40% focus on bringing innovation to their operating models and reimagining their content supply chain.

Senior marketers also feel strongly that the whole business benefits when they take the lead on innovation. Globally, 47% claim innovation that starts with the marketing team can impact the entire business, showing what’s possible. There’s also a recognition that meaningful innovation doesn’t necessarily need to start with product and R&D teams.

Cautiously betting on AI for innovation

Having committed to creating new operating models and exploring new possibilities, marketing leaders must now decide how to turn their visions into reality. That conversation can’t take place without considering AI.

As organisations adopt AI at scale, they place an ever-greater premium on originality and innovation. As far-reaching as the technology already is, there’s also widespread acknowledgement that craft and originality remain vital. 

While the research shows that brands are embracing AI at pace, marketers also remain committed to the power of human creativity. They believe AI and human creativity can come together to unlock new possibilities, spot new patterns and shape new futures: key ingredients for the culture of innovation they are keen to build.

More than three-quarters (78%) currently think generative AI will never replace human imagination, up from 65% in 2024. The challenge for innovators is to find the right balance between human ingenuity and technology’s power to scale.

In ring-fencing spend for experimentation, senior marketers are demonstrating their belief that innovation is no longer a nice-to-have but a business imperative in navigating economic, technological and cultural volatility. 

Come what may over the next 12 months and beyond, in domestic and global economies, they believe innovation can elevate their brand above the competition.

A new era of original thinking can also give consumers new and fulfilling experiences, benefiting people, business and society. 

Fiona McArthur is chief growth officer EMEA at Dentsu Creative