Imagine if AI agents planned your next vacation

You can't buy consumer trust, but you can pay for advertising.

Companies once earned consumers' trust through reputation alone. Now, in a sea of competitors offering similar services, companies must first grab customers' attention, and demonstrate and maintain clients afterward.

The best return on investment through advertising is to partner with a marketing company to launch a paid advertising campaign. But proceed with caution. Artificial intelligence is reshaping the digital advertising space, both for consumers and advertising agencies.

These changes come with certain risks — which may or may not be clearly identified in standard contracts between a company and its contracted marketing agency.

The future of marketing: AI agents

Perplexity's C-suite recently identified a twist for advertisers and AI technology — someday soon, it is entirely possible that advertising campaigns will be created to target a human user's AI agent, instead of the human herself. This would replace the role of search entirely.

For example, a human could ask an AI agent — meaning, an AI-powered assistant created to perform certain tasks on behalf of the human — this prompt: "Plan a beach trip for me on the North Carolina coast, with the shortest driving distance from Raleigh and a hotel with a swimming pool." The AI agent then goes through a number of paid advertisements for beach destinations that fit the specs provided by the human user.

Next, the AI agent comes back to the human with a curated list of results — possibly even just a single answer. In that case, the AI agent stands in for the consumer — meaning marketing agencies may one day be creating content for AI-powered software robots, instead of for people.

This has the power to change the world of marketing, because the creative product may well be refined down to a list of specs that match up with common user requests. An astonishing proposition, but one that has the power to streamline how and why consumers choose products and services.

It also carries certain risks for advertising agencies creating marketing products directed toward grabbing AI agent attention, especially if advertising agencies boast about the effectiveness of doing marketing this new way. 

Any marketing agencies utilizing AI-tech to create targeted marketing campaigns should be cautious about overhyping their success rate or launching campaigns without significant human oversight. The U.S. Federal Trade Commission will — and has — come down on unfair and deceptive marketing techniques, if the advertising agency is promoting products or services that exaggerate claims about them or their effectiveness.

In September of 2024, the FTC announced its launch of "Operation AI Comply," directed at controlling companies that use AI "to supercharge deceptive or unfair conduct that harms consumers."

All this to say, advertising agencies which adopt AI too quickly and without responsible oversight: beware.

Use of generative AI in marketing content

The benefits of using AI to provide marketing services are well documented — Good Apple reports that using AI to provide media services resulted in a 64% increase in cost per acquisition, and Theorem reported a 50% increase in speed of campaign execution.

The unreported statistic is how much time creatives save by using AI to provide marketing services. When AI is used to optimize and accelerate some of the less-glamorous grunt work of building an advertising campaign — including speeding up cycles of predictive research and logging customer reactions and behavior — creatives are free to apply their artistic eye and elevated aesthetic to produce, refine and polish advertising campaigns.

There are serious benefits to permitting your company's contracted advertising agency to utilize AI tools in providing marketing services, including lower cost, higher quality and more effective campaigns. But those benefits hinge on the sneaky kicker of consent. Does a company need to consent to the use of AI technology in the production and delivery of advertising services? 

The Association of National Advertisers thinks so. There are risks involved with the unconsented application of AI tools and technology to providing services for a company's marketing campaign, including leaks of proprietary and personal company data when performing market research using AI tools, as well as marketing campaigns with unintended discriminatory or biased impacts.

An even bigger threat lurks when AI agencies are unclear — or unconscientious — about using licensed works without permission in marketing campaigns. All the above can result in irreparable reputational harm and set a company up for potential legal challenges, based on either the campaign itself or any discriminatory or harmful impacts it causes.

To get the most out of AI tools in advertising, while staying aware of the risks of deploying the technology, keep these tips in mind:

• Generative AI tools carry a huge risk of infringing third-party copyrights. Be clear about what generative AI tools are being used and whether the use-case narrowly fits a defined business purpose. In the absence of clear guidance from the U.S. Copyright Office on generative AI and copyright — expected to be released early this year — refrain from taking unnecessary risks.
• Seek out generative AI tools that support and utilize licensing schema for rights holders, and, if that is not possible, use contract provisions to indemnify against third-party claims for content your company did not produce.
• Generative AI models have terms of use on their website which may restrict or even prohibit use of generated content for commercial purposes. Even where the terms of use permit such use, beware —terms are updated regularly, and can change, possibly without notice, at any time.
• Assign a team member to regularly check for updates and flag any possible changes in use limitations. Be clear about what portion of AI-generated content is used. Even smarter — negotiate the same responsibility back to any contracted agencies.
• Generative AI systems are constantly producing content that is biased, hallucinogenic and/or false. Using content generated by these tools in a marketing plan can lead to reputational backlash from customers and impact finances.
• Get granular about the origins of content used to create media campaigns. Ask for AI-generated content to include watermarking to demonstrate trust and accountability to your customers.
• Seek transparency for customers regarding consent to use AI in advertising services. Use interpretability and sustainability measures to differentiate from competitors. If a contracted agency is producing better, and less expensive, marketing services thanks to AI, be clear to customers about why that is.
• Remember, customers choose companies for a reason, and they want its services to be successful and function well. Show how the company is using AI responsibly and safely — and demonstrate why that is best for everyone.

Maria Cannon, AIGP, is an associate at Ambart Law PLLC.

This article is for informational purposes only and does not contain legal advice.