GenAI risks raise hackles on the brand side

A recent World Federation of Advertisers (WFA) survey highlights that 80% of global brands are concerned about how their agencies use generative AI, primarily due to legal (66%), ethical (51%), and reputational risks (49%). While 63% of brands have integrated generative AI into their marketing, nearly half admit they lack the expertise to maximize its potential. To address these issues, many brands are revising contracts with agencies, aiming for better data governance and protection around AI-generated outputs. Ultimately, brands, agencies - and the tech providers powering AI solutions - need to work together in good faith to deploy technology responsibly and come to mutually beneficial agreements. Data ownership and liability will be at the core of these negotiations.

From a Campaign piece on the WFA Study:

Nearly two-thirds of global brand owners (63%) are now using generative AI in their marketing strategies, according to research from the World Federation of Advertisers. However, the survey also revealed that many businesses have serious concerns about the technology, especially regarding how it’s being used by agency partners.

The study found that 80% of multinational brands are worried about how their creative and media agencies are using gen AI on their behalf. Legal risks (66%), ethical concerns (51%) and potential damage to reputation (49%) were identified as major obstacles to wider adoption.

Many marketers admitted that they lack the skills to fully use the technology, with 55% citing limited capabilities in this area. Additionally, 49% of respondents pointed to a lack of maturity when it comes to AI use within their organisations.

Despite these challenges, the use of gen AI is growing. The 63% of companies currently using it is a significant jump from the 45% reported in a similar WFA study last year. Only 9% of brands said they have no plans to use generative AI in their marketing.

To help brands address the legal risks of AI use, the WFA has released new voluntary guidelines, developed in partnership with marketing consultancy R3. The guidelines aim to assist the 55% of companies planning to review their contracts with media and creative agencies to include protections around AI use.

Additional coverage at MediaPost.