Study: Brands Concerned About Agencies' Use of Gen AI

A recent study by the World Federation of Advertisers (WFA) reveals that 80% of multinational brand owners have concerns about how their creative and media agency partners are using generative AI on their behalf. The report also shows that many brands see legal, ethical, and reputational risks as major roadblocks to the more widespread adoption of Gen AI in the industry. 
 
The research indicates that most brands are still in the early stages of implementing Gen AI. A quarter (26%) of respondents said their companies use Gen AI sporadically, while over half (58%) claim they're at a developing stage with a strategic plan for its use already in place. Only 12% consider their organization's use of Gen AI as mature, meaning they have an all-encompassing strategy for its application across all business units or teams. 
 
Interestingly, just 2% say Gen AI is embedded into driving innovation within their organizations and influencing changes to traditional business models. 
 
To help alleviate some concerns around legal risks associated with this technology's usage, WFA has partnered with marketing consultancy R3 to develop guidelines designed to mitigate these issues within agency contracts. Despite these measures being available, only 36% of companies have set terms dictating how partners can utilize Gen AI on their behalf. Even fewer (29%) have reviewed and updated creative and media contracts with partners to introduce relevant clauses related specifically to artificial intelligence. 
 
However, there seems to be growing realization among businesses about such contractual obligations; more than half (55%) stated plans for contract reviews purposefully aimed at addressing this issue. 
 
When it comes down to practical applications currently seen in various sectors, content creation tops the list, where GenAI is used by almost four-fifths (79%), followed by content ideation utilized by two-thirds (67%). Task automation saw slightly above half the respondents employing genAI (54%). 
 
Despite potential benefits like boosting revenue or enhancing returns on investment through marketing effectiveness, a significant majority (70%) are prioritizing the use of Gen AI for efficiency-related advantages like saving time and costs. 
 
The adoption of "responsible" AI principles is already prevalent among 63% of brands, with another 21% in the process of developing them. The most widely adopted principles include privacy (78%), transparency (76%), responsibility (70%), and respect for intellectual property rights (65%). 
 
Over half (54%) have instituted an AI governance board to oversee its usage within their organizations. Of these respondents, two-thirds (68%) confirmed that this body specifically addresses genAI's use in marketing initiatives. 
 
This research was based on responses from representatives at 48 multinational firms representing a cumulative annual marketing spend in excess of $102 billion. These findings highlight both the opportunities and challenges posed by generative AI as it becomes more ingrained into business operations worldwide.