Ethics & Policy

AI Adoption Is Surging in Advertising, but is the Industry Prepared for Responsible AI?

Published

1 week ago

August 21, 2025

AI is now a regular part of marketing and advertising: more than half of marketers already use GenAI for creative content and audience targeting, while nearly all plan to expand AI use next year, especially for content development and audience engagement. But while adoption is accelerating, safeguards are not. Over 70% of marketers have encountered an AI-related incident in their advertising efforts, including hallucinations, bias, or off-brand content, yet less than 35% plan to increase investment in AI governance or brand integrity oversight over the next 12 months.

This research, conducted by IAB in partnership with Aymara surveyed 125 advertising industry executives in the U.S. using the IAB Insights Engine platform powered by Attest. The data paints a striking picture: AI adoption, and thus AI-related challenges, are outpacing safeguards. And industry leaders are raising the alarm.

As AI becomes central to how brands create content and connect with audiences, the advertising industry is at an inflection point. Marketers are eager to innovate, but without clear governance, they risk brand trust, compliance, and long-term value. Now is the time for coordinated action to prioritize shared standards, stronger tools, and responsible practices to ensure AI enhances – rather than undermines – the future of advertising.

AI Is Everywhere in Marketing, and Still Growing

AI is now part of the marketing toolkit across the board. Over half of marketers are already using it for creative content, audience targeting, customer support, with nearly as many applying it to predictive analytics.

And usage is set to grow: 58% plan to increase AI for creative generation in the next year, along with expanded use in chatbots, targeting, and forecasting. AI isn’t just a trend, it’s quickly becoming core to how marketing gets done.

But concerns with AI are high: Incidents are already happening at an alarming rate, and a single incident can impact ROI

Marketers are well aware that there can be risks with AI-generated advertising. Top concerns include misinformation and deepfakes, loss of creative control, and brand integrity risks from offensive or harmful outputs. Many also worry about consumer trust, with 37% fearing audiences will distrust ads made by AI. Other concerns include bias and fairness, regulatory compliance, and the challenge of monitoring AI content at scale. Some flagged the threat of adversarial prompts, like jailbreaks that trick models into unsafe behavior.

The takeaway: AI can pose serious ethical and quality risks, and marketers know these issues can damage trust and brand reputation. That’s why over 60% support labeling AI-generated ads, with only 15% opposed—signaling a strong push for transparency as a trust safeguard.

And these aren’t future risks. AI-related issues are already affecting advertising campaigns. In the research, 70% of marketers reported at least one AI incident. Common problems included hallucinated outputs (AI generated content that was factually incorrect, nonsensical, or fabricated), biased or inappropriate content, and off-brand or offensive material. Others saw loss of creative control and failures in regulatory compliance.

The consequences were significant: 40% had to pause or pull ads, over a third dealt with brand damage or PR issues, and nearly 30% had to conduct internal audits. Some saw wasted budgets, client complaints, or legal concerns. Only 6% said the impact was minimal.

These early missteps are a clear warning – without proper oversight, AI can scale risks as fast as it scales output.

Patchy Safeguards and A False Sense of Security

Despite growing risks, AI oversight remains inconsistent. Most teams rely on human review and brand integrity checklists, which are important but basic steps. More advanced practices are far less common such as consulting external AI ethics experts, running red team testing, and using automated evaluation tools. Alarmingly, 10% of respondents either do nothing or aren’t sure how they manage AI risks.

Yet confidence remains high. Nearly 90% say they feel prepared to catch AI issues before launch. This may reflect trust in existing workflows, but given that 70% have already had incidents, it also suggests a false sense of security.

The reality: only one-third of brands, agencies, and publishers have adopted or plan to adopt any formal governance tools, leaving major gaps (IAB State of Data 2025: The Now, The Near, and The Next Evolution of AI for Media Campaigns). There’s a strong need – and opportunity – for more structured, scalable safeguards across the industry including systems that flag risk, ensure alignment, and protect brand trust before campaigns reach the public.

Industry Calls for Standards, Tools, and Transparency

Marketers are calling for stronger AI governance. When asked what’s needed to keep AI in advertising safe and effective, top priorities included regular AI audits for bias and integrity, transparency in AI decision-making, data privacy protections, and IP safeguards for AI-created content.

In short, marketers want tools, policies, and standards to close real governance gaps. Only 6% believe current safeguards are enough. This is an opportunity for the industry to define systems, tooling, and benchmarks that can ensure AI outputs are safe, accurate, and aligned with brand values.

Accountability and Leadership: Who’s Minding the AI?

One major challenge in AI governance is ownership. When asked who leads these efforts, responses vary, with the majority mentioning executive leadership or a dedicated AI task force, marketing/creative team’s, or legal/compliance teams are taking the lead. Some also rely on data science or MarTech teams. Only 17% of organizations currently use an external partner for AI governance today, suggesting most are building internal capabilities. But not all have definitive accountability:14% say no one owns AI governance, and others aren’t sure who does.

Without structured ownership, risks can fall through the cracks. As companies scale GenAI, it’s critical to define who is responsible, whether it is a chief AI officer, cross-functional council, or dedicated team. This clarity is essential to move from good intentions to accessible solutions that enable oversight, testing, and enforcement, regardless of organizational structure. Once roles are defined, organizations need to ensure their third-party partners are aware of who is responsible in order to enable better collaboration, strengthen industry relationships, and help mitigate shared risks.

Third-Party Support for Governance

While most companies currently manage AI governance in-house, there’s strong interest in external support. When asked if they’d consider a third-party solution to evaluate risks like hallucinations, bias, or off-brand content, over 90% said yes.

Many see outside expertise as a valuable safety net. One marketer said it would offer “peace of mind,” while another noted it would “reduce risk to our brand and business.” Only a few were skeptical, mostly due to confidence in internal teams or concerns about cost. But those views were rare. Marketers are open and eager for expert tools and guidance to ensure their GenAI use is safe, effective, and aligned with brand values. This presents a timely opportunity to partner with trusted third parties to strengthen AI oversight across the industry.

No Time to Waste: A Call to Action on Responsible AI

This survey shows an industry moving fast on AI – but still building the guardrails as it goes. Advertisers are excited about AI’s potential for content, targeting, and engagement. But many have already seen the risks firsthand: misinformation, bias, and off-brand content that damage trust and waste budget.

Marketers are sending a strong message: they want help in the form of better standards, stronger tools, and expert support to use AI responsibly. Now is the time for collective action. Brands, agencies, publishers, and platforms all have a role to play in shaping AI governance.

Here are four steps to move forward:

Make AI governance a priority. Assign ownership, engage leadership, and establish a cross-functional task force if you don’t have one already. Prioritize not only who is responsible, but how responsibility is translated into day-to-day workflows, review processes, and evaluation methods.
Build your best practices. Start with foundational checks like human review, policy guidelines, bias testing—and build toward structured evaluations, automated audits (with human-in-the-loop oversight where appropriate), and continuous monitoring that can scale with content volume and model complexity.
Bring in expert support to scale. Accelerate safely with trusted experts and third-party tools designed to evaluate, test, and certify AI-driven content at scale, so your team can move faster without increasing risk.
Lead with transparency. Don’t just say you use AI responsibly – prove it. Build systems that track how AI is used, flag risks, and generate audit-ready records. Stay vigilant on fairness, privacy, and ethics. Consumer trust depends on it.

The data is clear: AI is undeniably transforming advertising but incidents are already happening, current safeguards aren’t keeping pace, and marketers need better solutions. This isn’t a future problem to solve but instead a present reality demanding immediate action to unlock AI’s full potential. With a few practical steps, responsible AI is not only possible – it can be the norm.

Survey Methodology

This research was conducted using the IAB Insights Engine platform, powered by Attest. It included a survey of 125 US ad industry executives who work for companies with 50+ employees that have active involvement/visibility into how their company uses AI in advertising and marketing. The survey was conducted in July 2024.

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Ethics & Policy

Navigating the Investment Implications of Regulatory and Reputational Challenges

Published

4 hours ago

August 31, 2025

BlockByte

The generative AI industry, once hailed as a beacon of innovation, now faces a storm of regulatory scrutiny and reputational crises. For investors, the stakes are clear: companies like Meta, Microsoft, and Google must navigate a rapidly evolving legal landscape while balancing ethical obligations with profitability. This article examines how regulatory and reputational risks are reshaping the investment calculus for AI leaders, with a focus on Meta’s struggles and the contrasting strategies of its competitors.

The Regulatory Tightrope

In 2025, generative AI platforms are under unprecedented scrutiny. A Senate investigation led by Senator Josh Hawley (R-MO) is probing whether Meta’s AI systems enabled harmful interactions with children, including romantic roleplay and the dissemination of false medical advice [1]. Leaked internal documents revealed policies inconsistent with Meta’s public commitments, prompting lawmakers to demand transparency and documentation [1]. These revelations have not only intensified federal oversight but also spurred state-level action. Illinois and Nevada, for instance, have introduced legislation to regulate AI mental health bots, signaling a broader trend toward localized governance [2].

At the federal level, bipartisan efforts are gaining momentum. The AI Accountability and Personal Data Protection Act, introduced by Hawley and Richard Blumenthal, seeks to establish legal remedies for data misuse, while the No Adversarial AI Act aims to block foreign AI models from U.S. agencies [1]. These measures reflect a growing consensus that AI governance must extend beyond corporate responsibility to include enforceable legal frameworks.

Reputational Fallout and Legal Precedents

Meta’s reputational risks have been compounded by high-profile lawsuits. A Florida case involving a 14-year-old’s suicide linked to a Character.AI bot survived a First Amendment dismissal attempt, setting a dangerous precedent for liability [2]. Critics argue that AI chatbots failing to disclose their non-human nature or providing false medical advice erode public trust [4]. Consumer advocacy groups and digital rights organizations have amplified these concerns, pressuring companies to adopt ethical AI frameworks [3].

Meanwhile, Microsoft and Google have faced their own challenges. A bipartisan coalition of U.S. attorneys general has warned tech giants to address AI risks to children, with Meta’s alleged failures drawing particular criticism [1]. Google’s decision to shift data-labeling work away from Scale AI—after Meta’s $14.8 billion investment in the firm—highlights the competitive and regulatory tensions reshaping the industry [2]. Microsoft and OpenAI are also reevaluating their ties to Scale AI, underscoring the fragility of partnerships in a climate of mistrust [4].

Financial Implications: Capital Expenditures and Stock Volatility

Meta’s aggressive AI strategy has come at a cost. The company’s projected 2025 AI infrastructure spending ($66–72 billion) far exceeds Microsoft’s $80 billion capex for data centers, yet Meta’s stock has shown greater volatility, dropping -2.1% amid regulatory pressures [2]. Antitrust lawsuits threatening to force the divestiture of Instagram or WhatsApp add further uncertainty [5]. In contrast, Microsoft’s stock has demonstrated stability, with a lower average post-earnings drawdown of 8% compared to Meta’s 12% [2]. Microsoft’s focus on enterprise AI and Azure’s record $75 billion annual revenue has insulated it from some of the reputational turbulence facing Meta [1].

Despite Meta’s 78% earnings forecast hit rate (vs. Microsoft’s 69%), its high-risk, high-reward approach raises questions about long-term sustainability. For instance, Meta’s Reality Labs segment, which includes AI-driven projects, has driven 38% year-over-year EPS growth but also contributed to reorganizations and attrition [6]. Investors must weigh these factors against Microsoft’s diversified business model and strategic investments, such as its $13 billion stake in OpenAI [3].

Investment Implications: Balancing Innovation and Compliance

The AI industry’s future hinges on companies’ ability to align innovation with ethical and legal standards. For Meta, the path forward requires addressing Senate inquiries, mitigating reputational damage, and proving that its AI systems prioritize user safety over engagement metrics [4]. Competitors like Microsoft and Google may gain an edge by adopting transparent governance models and leveraging state-level regulatory trends to their advantage [1].

Conclusion

As AI ethics and legal risks dominate headlines, investors must scrutinize how companies navigate these challenges. Meta’s struggles highlight the perils of prioritizing growth over governance, while Microsoft’s stability underscores the value of a measured, enterprise-focused approach. For now, the AI landscape remains a high-stakes game of regulatory chess, where the winners will be those who balance innovation with accountability.

Source:
[1] Meta Platforms Inc.’s AI Policies Under Investigation and [https://www.mintz.com/insights-center/viewpoints/54731/2025-08-22-meta-platforms-incs-ai-policies-under-investigation-and]
[2] The AI Therapy Bubble: How Regulation and Reputational [https://www.ainvest.com/news/ai-therapy-bubble-regulation-reputational-risks-reshaping-mental-health-tech-market-2508/]
[3] Breaking down generative AI risks and mitigation options [https://www.wolterskluwer.com/en/expert-insights/breaking-down-generative-ai-risks-mitigation-options]
[4] Experts React to Reuters Reports on Meta’s AI Chatbot [https://techpolicy.press/experts-react-to-reuters-reports-on-metas-ai-chatbot-policies]
[5] AI Compliance: Meaning, Regulations, Challenges [https://www.scrut.io/post/ai-compliance]
[6] Meta’s AI Ambitions: Talent Volatility and Strategic Reorganization—A Double-Edged Sword for Investors [https://www.ainvest.com/news/meta-ai-ambitions-talent-volatility-strategic-reorganization-double-edged-sword-investors-2508/]

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Ethics & Policy

7 Life-Changing Books Recommended by Catriona Wallace | Books

Published

1 day ago

August 30, 2025

Girish Shukla

7 Life-Changing Books Recommended by Catriona Wallace (Picture Credit – Instagram)

Some books ignite something immediate. Others change you quietly, over time. For Dr Catriona Wallace—tech entrepreneur, AI ethics advocate, and one of Australia’s most influential business leaders, books are more than just ideas on paper. They are frameworks, provocations, and spiritual companions. Her reading list offers not just guidance for navigating leadership and technology, but for embracing identity, power, and inner purpose. These seven titles reflect a mind shaped by disruption, ethics, feminism, and wisdom. They are not trend-driven. They are transformational.

1. Lean In by Sheryl Sandberg

A landmark in feminist career literature, Lean In challenges women to pursue their ambitions while confronting the structural and cultural forces that hold them back. Sandberg uses her own journey at Facebook and Google to dissect gender inequality in leadership. The book is part memoir, part manifesto, and remains divisive for valid reasons. But Wallace cites it as essential for starting difficult conversations about workplace dynamics and ambition. It asks, simply: what would you do if you weren’t afraid?

2. Women and Power: A Manifesto by Mary Beard

In this sharp, incisive book, classicist Mary Beard examines the historical exclusion of women from power and public voice. From Medusa to misogynistic memes, Beard exposes how narratives built around silence and suppression persist today. The writing is fiery, brief, and packed with centuries of insight. Wallace recommends it for its ability to distil complex ideas into cultural clarity. It’s a reminder that power is not just a seat at the table; it is a script we are still rewriting.

3. The World of Numbers by Adam Spencer

A celebration of mathematics as storytelling, this book blends fun facts, puzzles, and history to reveal how numbers shape everything from music to human behaviour. Spencer, a comedian and maths lover, makes the subject inviting rather than intimidating. Wallace credits this book with sparking new curiosity about logic, data, and systems thinking. It’s not just for mathematicians. It’s for anyone ready to appreciate the beauty of patterns and the thinking habits that come with them.

4. Small Giants by Bo Burlingham

This book is a love letter to companies that chose to be great instead of big. Burlingham profiles fourteen businesses that opted for soul, purpose, and community over rapid growth. For Wallace, who has founded multiple mission-driven companies, this book affirms that success is not about scale. It is about integrity. Each story is a blueprint for building something meaningful, resilient, and values-aligned. It is a must-read for anyone tired of hustle culture and hungry for depth.

5. The Misogynist Factory by Alison Phipps

A searing academic work on the production of misogyny in modern institutions. Phipps connects the dots between sexual violence, neoliberalism, and resistance movements in a way that is as rigorous as it is radical. Wallace recommends this book for its clear-eyed confrontation of how systemic inequality persists beneath performative gestures. It equips readers with language to understand how power moves, morphs, and resists change. This is not light reading. It is a necessary reading for anyone seeking to challenge structural harm.

6. Tribes by Seth Godin

Godin’s central idea is simple but powerful: people don’t follow brands, they follow leaders who connect with them emotionally and intellectually. This book blends marketing, leadership, and human psychology to show how movements begin. Wallace highlights ‘Tribes’ as essential reading for purpose-driven founders and changemakers. It reminds readers that real influence is built on trust and shared values. Whether you’re leading a company or a cause, it’s a call to speak boldly and build your own tribe.

7. The Tibetan Book of Living and Dying by Sogyal Rinpoche

Equal parts spiritual guide and philosophical reflection, this book weaves Tibetan Buddhist teachings with Western perspectives on mortality, grief, and rebirth. Wallace turns to it not only for personal growth but also for grounding ethical decision-making in a deeper sense of purpose. It’s a book that speaks to those navigating endings—personal, spiritual, or professional and offers a path toward clarity and compassion. It does not offer answers. It offers presence, which is often far more powerful.

The books that shape us are often those that disrupt us first. Catriona Wallace’s list is not filled with comfort reads. It’s made of hard questions, structural truths, and radical shifts in thinking. From feminist manifestos to Buddhist reflections, from purpose-led business to systemic critique, this bookshelf is a mirror of her own leadership—decisive, curious, and grounded in values. If you’re building something bold or seeking language for change, there’s a good chance one of these books will meet you where you are and carry you further than you expected.

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Ethics & Policy

Hyderabad: Dr. Pritam Singh Foundation hosts AI and ethics round table at Tech Mahindra

Published

1 day ago

August 30, 2025

Telangana Today

The Dr. Pritam Singh Foundation and IILM University hosted a Round Table on “Human at Core: AI, Ethics, and the Future” in Hyderabad. Leaders and academics discussed leveraging AI for inclusive growth while maintaining ethics, inclusivity, and human-centric technology.

Published Date – 30 August 2025, 12:57 PM

Hyderabad: The Dr. Pritam Singh Foundation, in collaboration with IILM University, hosted a high-level Round Table Discussion on “Human at Core: AI, Ethics, and the Future” at Tech Mahindra, Cyberabad.

The event, held in memory of the late Dr. Pritam Singh, pioneering academic, visionary leader, and architect of transformative management education in India, brought together policymakers, business leaders, and academics to explore how India can harness artificial intelligence (AI) while safeguarding ethics, inclusivity, and human values.

In his keynote address, Padmanabhaiah Kantipudi, IAS (Retd.), Chairman of the Administrative Staff College of India (ASCI),

paid tribute to Dr. Pritam Singh, describing him as a nation-builder who bridged academia, business, and governance.
The Round Table theme, Leadership: AI, Ethics, and the Future, underscored India’s opportunity to leverage AI for inclusive growth across healthcare, agriculture, education, and fintech—while ensuring technology remains human-centric and trustworthy.

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