78% of Brands Use AI Content—But Few Disclose It, Study Finds

New research reveals a widening gap between how widely brands use AI-generated content and how rarely they tell consumers about it, raising reputational and regulatory risks that are now reaching boardrooms across Asia and beyond.

According to the World Federation of Advertisers, 78% of multinational brands already use AI-generated or AI-enhanced content in consumer-facing marketing. Yet 80% of those same brands are calling for clearer global guidance on when and how to disclose that use.

Disclosure Practices Lag Behind Adoption

The WFA research shows brands are using AI most heavily for product images (87%), marketing copy (80%), and background visuals (77%). Fewer brands use AI to alter images of real people (33%) or generate fully synthetic humans (18%).

Despite widespread use, disclosure remains inconsistent. While 82% of brands say transparency is essential for protecting their reputation, 61% cite unclear or inconsistent regulations as a major obstacle. Only 67% have developed internal policies at all.

The reputational cost of silence is already visible. Luxury brands Hugo Boss and Burberry both deployed AI-generated or AI-enhanced visuals without proactive disclosure, and both reportedly encountered consumer pushback by year-end 2025. For brands whose identity rests on heritage and craftsmanship, undisclosed AI use carries disproportionate risk.

APAC Consumers Among the Most Skeptical

Asia-Pacific presents a particularly demanding environment. Research from Klaviyo finds that 51% of APAC consumers can actively identify low-quality AI content, yet only 5% fully trust AI-generated brand communications. Approximately 30% of APAC shoppers use AI tools several times weekly, outpacing both the US and Europe in frequency.

This creates a difficult position for marketers in the region. Consumers are not unfamiliar with AI. They are sophisticated enough to detect poor execution and skeptical enough to withhold trust even from well-executed AI content.

Singapore's government has committed over SG$1 billion (~US$745 million) toward AI infrastructure and talent development through 2030, a move that will further raise consumer AI literacy across the region over time.

Regulation and Industry Standards Accelerate

The regulatory environment is tightening. New York State enacted legislation by late 2025 requiring clear disclosure of AI-generated people in advertisements, the first major US state-level law directly targeting AI content in brand advertising. Other states are expected to follow.

On January 15, 2026, the Interactive Advertising Bureau released the industry's first AI Transparency and Disclosure Framework. The framework uses a risk-based model, requiring disclosure for synthetic humans, digital twins, and AI chatbots that could mislead consumers, while exempting low-risk uses such as decorative background visuals.

IAB CEO David Cohen stated: "We must get transparency and disclosure right, or we risk losing the trust that underpins the entire value exchange."

The framework's structure mirrors what WFA's brand survey data already suggests. 96% of brand respondents believe AI-generated voices that could be mistaken for human voices must be disclosed. Only 4% believe AI-generated decorative backgrounds require the same treatment.

Disclosure Emerging as a Commercial Opportunity

Analysis of S&P 500 filings shows that 72% of firms reported at least one AI-related risk in 2025, up from just 12% in 2023. Reputational harm is the single most cited concern, flagged by 38% of large US companies.

IAB research identifies a commercial case for action. 73% of Gen Z and Millennial consumers say that AI disclosure either boosts or neutralizes their purchase intent. Over half of consumers want explicit labels on 100% AI-generated ads or imagery.

IAB VP Caroline Giegerich has highlighted a gap between advertiser and consumer perceptions of AI, advocating for material-based disclosure as a credibility measure.

The Association of National Advertisers named "authenticity" and "agentic AI" as its 2025 Marketing Words of the Year, signaling that the industry's leading professional body recognizes the tension between autonomous AI deployment and the human credibility consumers expect.