A widening gap is emerging between brands embracing generative artificial intelligence in advertising and consumers questioning the authenticity of AI-generated content, according to recent industry findings.

The latest data shows that 57% of consumers are concerned about fake advertisements created using generative AI, while only 37% of marketers have incorporated AI governance clauses into vendor contracts. The findings highlight growing concerns over how businesses are managing the rapid adoption of AI in creative and advertising workflows.

The report comes as companies across industries continue integrating generative AI into their marketing operations. From advertising copy and product visuals to promotional videos and social media campaigns, businesses are increasingly turning to AI-powered tools to reduce production costs, accelerate creative development and deliver personalized campaigns at scale.

While adoption continues to rise, consumer confidence appears to be moving in the opposite direction.

The increasing sophistication of AI-generated images, videos and synthetic media has made it more difficult for consumers to distinguish authentic brand content from manipulated or fabricated material. As AI-generated advertisements become more common across digital platforms, concerns surrounding misinformation, deepfakes and deceptive marketing practices are also gaining attention.

The findings also point to a significant governance gap within the marketing industry. Despite widespread adoption of AI-powered creative tools, fewer than four in ten marketers have established contractual safeguards outlining how AI-generated content should be created, reviewed or disclosed when working with agencies and third-party technology providers.

Industry experts say the absence of formal AI governance could expose organizations to reputational, legal and regulatory risks if AI-generated campaigns contain misleading information or fail to meet emerging transparency requirements.

The issue is receiving increased attention from policymakers and regulators as governments introduce frameworks aimed at promoting responsible AI adoption. Many of these initiatives emphasize transparency, human oversight and accountability for commercial AI systems, including those used in advertising and digital media.

At the same time, marketers continue investing heavily in generative AI as competition intensifies across the digital advertising landscape. The technology is enabling brands to produce campaigns more efficiently, respond faster to market trends and create larger volumes of content without significantly increasing production costs.

The latest findings underscore a growing challenge for the advertising industry. While generative AI is reshaping how marketing content is created, maintaining consumer trust is becoming just as important as improving speed and efficiency. As AI-generated advertising becomes increasingly mainstream, businesses are expected to face greater pressure to balance innovation with transparency and responsible use of the technology.