The AI Dilemma: Navigating Trust and Innovation in Marketing

In an era where AI is rapidly transforming industries, the marketing world finds itself at a critical juncture. Recent research from the World Federation of Advertisers (WFA) has uncovered a significant trust gap between multinational brand owners and their creative and media agency partners regarding the use of generative AI. This revelation comes at a time when AI adoption in marketing is accelerating, bringing with it a host of opportunities and challenges.

The WFA’s study, which surveyed 54 responses from 48 of the world’s largest companies with a combined annual marketing spend of $102 billion, paints a complex picture of AI’s role in modern marketing strategies.

Many Multinational Brands Are Apprehensive of AI

A staggering 80% of multinational brand owners expressed concerns about how their agency partners are utilizing generative AI on their behalf. This apprehension stems from a trifecta of potential risks: legal (66%), ethical (51%), and reputational (49%).

These concerns drive home the need for agencies and in-house teams to truly understand how to operationalize Generative AI ethically and effectively. For example, at Human Driven AI, we deploy our proven TDC Approach to ensure the responsible use of Generative AI by organizing and defining your AI tech stack around the ethical use of each model.

Despite Concerns AI Adoption Continues to Grow

Despite these concerns, the allure of AI’s potential remains strong. WFA’s research indicates that 63% of brand owners are already incorporating generative AI into their marketing strategies.

This adoption rate signals a recognition of AI’s transformative power, even as companies grapple with its implications. Interestingly, only 9% of the brands surveyed reported having no current plans to use generative AI in their marketing efforts, underscoring the technology’s perceived importance in staying competitive.

Marketers Remain Unsure How to Apply AI

However, the journey toward AI integration is still in its early stages for most brands. The WFA’s findings reveal that 26% of respondents consider themselves merely ‘aware’ of the technology, while 58% are in the development stage.

Only a small fraction – 12% – described their organizations’ use of generative AI as ‘mature,’ with an even smaller 2% claiming to be ‘leading’ and ‘transformational’ in their approach.

The primary applications of generative AI in marketing currently revolve around content creation (79%), content ideation (67%), and task automation (54%). This focus suggests that brands are primarily leveraging AI to enhance productivity and streamline workflows.

Indeed, 70% of respondents prioritize using generative AI for efficiencies over marketing effectiveness measures such as increasing revenue and return on investments.

Companies Must Establish Policies on AI Integration

Yet, as companies rush to embrace AI, there’s a notable lag in establishing governance frameworks. Only 36% of companies have introduced terms prescribing how their partners can use generative AI on their behalf, and a mere 29% have reviewed their media and creative contracts to include AI-related clauses.

This gap in governance could potentially exacerbate the trust issues already present between brands and their agency partners. It’s imperative that brands and agencies develop guidelines and policies around the use of generative AI, including public disclosures.

On a more positive note, 63% of brands have adopted responsible AI principles, with another 21% in the process of developing them. This trend towards ethical AI use is crucial in building trust not just between brands and agencies, but also with consumers.

Stephan Loerke, CEO of the WFA, emphasizes the importance of addressing these challenges head-on:

“To harness the undisputed potential of gen AI, brands must first get a grip on the legal and compliance implications.”

His statement underscores the need for a balanced approach that maximizes AI’s benefits while mitigating its risks. If you need assistance developing your generative AI tech stack and company or agency policies, contact us. We are happy to help.

Consumers Are Wary of AI Integration

The trust issues surrounding AI extend beyond the brand-agency relationship to consumers as well. Recent research published in the Journal of Hospitality Marketing & Management reveals a troubling trend: the mere inclusion of AI terminology in product descriptions can decrease customers’ purchasing intention.

This consumer wariness was starkly illustrated by the backlash against a Google ad for its Gemini AI tool during the Paris 2024 Olympics. The ad, which depicted a father using AI to help his daughter write a letter, was quickly pulled after viewers expressed discomfort with the concept of using AI for personal expression.

The incident highlights a fundamental disconnect between the massive investments companies are making in AI – with worldwide spending reaching $235 billion according to International Data Corporation – and consumer acceptance of the technology. Marketers are pouring millions into advertising AI-powered services and products, yet consumers remain skeptical.

Dr. Mesut Cicek, assistant professor at Washington State University, conducted experiments that consistently showed a decrease in purchasing intention when AI was mentioned in product descriptions. This effect was particularly pronounced for products perceived as high-risk, such as AI-powered cars or medical diagnosis services.

The root of this consumer distrust lies in concerns about privacy, security, and the perceived threat AI poses to personal autonomy and job security. Audrey Chee-Read, principal analyst at Forrester, notes that over half of consumers believe AI poses a significant threat to society. This perception is fueled by fears of misinformation, copyright infringement, and questions about AI’s accuracy and reliability.

For companies looking to build trust with consumers, we recommend focusing on transparency and value creation. Don’t just press every AI button available. Instead focus on the specific features that demonstrate the value AI brings to the product or service.

As the marketing industry continues to navigate the AI revolution, the key to success lies in striking a balance between innovation and trust-building. Companies must not only develop robust AI governance frameworks but also focus on creating tangible value for consumers through AI applications. By addressing legal and ethical concerns, ensuring transparency, and demonstrating the practical benefits of AI, marketers can work towards bridging the trust gap and realizing the full potential of this transformative technology.

Remember, AI won’t take your job. Someone who knows how to use AI will. Upskilling your team today, ensures success tomorrow. Customized in-person and virtual team trainings are available. Or, schedule a discovery call for customized AI consulting, including product innovation and a comprehensive strategic roadmap boost your competitive advantage with AI.