How marketers can navigate transparency in AI-generated ads

Artificial intelligence (AI) has quickly become an advancement in technology that cannot be avoided. This is especially seen in the advertising and marketing industry where generative AI (Gen AI) has become among the top three business priorities for 83% of APAC C-suite executives. 

Not only that, consumers are becoming more discerning too with 50% of consumers being able to spot AI-generated copies. With AI continuing to reshape the advertising industry and audiences becoming increasingly perceptive, is there are need to declare the use of it? Ad agency leaders that MARKETING-INTERACTIVE spoke to seem to be split on it.

Don't miss: Study: 60% of APAC customers trust organisations that use gen AI

Nathan Petralia, former MD of Merkle Hong Kong, said ads made by AI should be declared. "Transparency is increasingly important in all forms of communication, especially in advertising. Audiences are becoming more attuned to the sources of the content they consume, and AI is often perceived with a mixture of fascination and skepticism," said Petralia. 

Petralia added that declaring that an ad was made by AI can foster trust as it allows the audience to make informed judgements. Furthermore, there are ethical considerations surrounding AI-generated content as it may be perceived differently in terms of creativity and intent.

"For some consumers, knowing that an ad was created by AI may affect how they relate to the message, while for others, it may not matter at all, as long as the ad is relevant and engaging," added Petralia. 

Interestingly, a recent study by Vodafone Business reveal that six in 10 consumers in APAC say they trust organisations the same or even more when Gen AI is used. Conversely, 39% of APAC customers say that the use of gen AI would make them trust an organisation less.

On the other hand, Jeffry Gamble, chief creative officer of GBA and dentsu Hong Kong is of the opinion that declaring the use of AI should be on "need to know" basis. "I think we need to ask ourselves why do we need to do this? Do consumers care if an ad is created by a person or AI, will it affect their decision-making?" said Gamble.

"So, I suppose it will depend on the content rather than is it AI or not. If the product is generated by AI then I think consumer’s need to know, but if it is just a generic background, then, in my opinion, probably not," he added. 

Demarcation of AI-led ads

Aditya Kilpady, regional strategy director of UM APAC said that the explosion of AI in content creation has given a rise to 'AI washing'. Kilpady explained that 'AI washing' is when brands use AI to generate content that appears to be authentic but is actually manipulated.

In fact, creators are already beginning to reproduce themselves online as AI clones said Kilpady. As such proper guidelines to demarcate AI-generated ads will become necessary, adding that: 

"There must be proper policy guidance to disclose the use of AI-generated content; such as the "paid partnership" tag used across influencer campaigns."

This is especially since brands such as Dove have pledged never to use AI to distort women’s images in advertising, explained Kilpady. For other brands, accountability initiatives can be set in the form of a disclosures as well as the implementation of a watermark on AI-generated content in influencer campaigns. 

Kipaldy said that: 

"By declaring that an ad is made by AI, we will be championing a culture of influencer authenticity and consumer transparency in an AI-powered landscape."

Gamble agrees, adding that labelling AI-generated ads could help maintain ethical standards in advertising. This could be especially important if AI is used to target specific consumer groups or create hyper-personalised content.

"However, whether this demarcation becomes mandatory will likely depend on how consumers perceive AI-driven content over time. If audiences begin to demand more clarity in distinguishing AI from human-created content, regulatory bodies or industry standards may evolve accordingly," Gamble explained. 

Who should drive this initiative?

According to Petralia, the initiative to drive transparency in AI-generative ads should be a collective effort involving multiple stakeholders including: 

1. Advertising and marketing bodies: Industry groups and trade organisations should take the lead in creating guidelines and best practices for the use of AI in advertising, ensuring they reflect the ethical concerns and demands of both consumers and advertisers.

2. Regulatory authorities: Governments and regulatory bodies may need to step in to establish clear rules for transparency and consumer protection, particularly as AI technology continues to evolve.

3. Brands and advertisers: Brands should prioritise transparency and work with their partners to clearly communicate when AI is used in their advertising, setting an industry standard for honesty and ethical marketing. They can also help shape consumer expectations by leading the conversation around AI in advertising.

4. Technology providers: Companies developing AI tools for ad creation should also play a role. They can introduce features that allow for easy identification of AI-generated content, as well as work with advertisers to ensure their tools are used responsibly.

"Ultimately, it will require a collective effort to ensure that consumers remain informed, and that AI is used ethically and transparently in advertising," added Petralia. 

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