New Delhi: A new study by the World Federation of Advertisers (WFA) has revealed that while 63% of brand owners are utilizing generative AI in their marketing strategies, there are significant concerns regarding its use by creative and media agencies.
Eighty percent of multinational brands have expressed reservations about how their agency partners are employing generative AI (gen AI) on their behalf. Legal (66%), ethical (51%), and reputation (49%) risks have been identified as major hurdles to broader adoption. Marketers have also acknowledged a lack of capabilities in this area (55%) and a general deficiency in AI maturity (49%).
Despite these concerns, the use of gen AI is on the rise, with adoption rates significantly higher than last year. In 2024, only 9% of brands indicate no current plans to utilize gen AI for their marketing.
To address the legal risks associated with gen AI in agency contracts, the WFA, in collaboration with marketing consultancy R3, has developed voluntary guidance. This guidance aims to assist companies in reviewing their media and creative agency contracts to cover the specific risks and benefits related to AI usage.
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The new guidance follows an earlier WFA publication on commonly adopted responsible AI principles and standardized definitions.
The findings are based on responses from 54 of the world’s largest companies, with a combined annual marketing spend of $102 billion.
Most brands are still in the early stages of their gen AI journey. Just over a quarter (26%) claim to be ‘aware’ of gen AI and its potential, while 58% are at a ‘developing’ stage. Only 12% consider their organizations’ use of gen AI as ‘mature,’ and a mere 2% as ‘leading’ or ‘transformational.’
Stephan Loerke, WFA CEO, emphasized the importance of understanding the legal and compliance implications of gen AI. He stated, “To fully harness the potential of gen AI, brands must first address the legal and compliance challenges.”
Currently, only 36% of companies have introduced terms governing how their partners can use generative AI on their behalf, and just 29% have reviewed their media and creative contracts to include AI-related clauses. However, 48% are planning to introduce such terms, and over half intend to review their contracts.
The primary motivation behind these plans is to ensure compliance with data governance, introduce warranties and indemnities, and safeguard ownership of outputs.
While only 9% of brand owners are reviewing contracts with creative talent to address generative AI use, nearly half (46%) are planning to do so.
Other key findings from the research include:
- Generative AI is most commonly used for content creation (79%), content ideation (67%), and task automation (54%).
- Brands prioritize the use of gen AI for efficiency over marketing effectiveness.
- There is caution surrounding the use of AI-generated content in marketing assets.
- Brands are developing responsible AI principles and guidelines.
- Over half of brands have an AI governance board in place.
The survey results will inform the future work of the WFA’s AI Community.
