Advertisers Mandating Agencies to Disclose Use of Generative AI

Advertisers are revising their contracts with agencies to ensure that they disclose when and how they used generative AI technology to produce their ads. Ebiquity’s Ruben Schreurs said that approximately 10% to 20% of its clients are making addendums to their agency contracts by updating their marketing policies to include new wording around AI. This means embracing innovation while acknowledging its faults and current shortcomings. Generative AI tools are used by advertising agencies to spin up hundreds of ad variations, produce media plans, and automate tasks, such as search engine optimization. However, AI carries risks, such as bias, data protection, or copyright infringement issues. One creative agency boss of BBDO Worldwide was even forced to send out an internal memo warning against using generative-AI tools for client work. The Financial Times reported that Ogilvy ad agency is advocating for advertisers and social media platforms to disclose the use of generative AI in influencer campaigns. Recent reports from Association of National Advertisers and the law firm Reed Smith addressed this by releasing a revised version of its media-buying contract template to include a new section stipulating that agencies obtain permission from advertisers before using artificial intelligence to deliver services to them. Advertisers are early in the stages of figuring out agreements with their agencies about how generative-AI can be used in the scope of their work. But the majority of marketers agreed that AI is unlikely to displace their agencies any time soon.