Small firms risk trust loss from AI adverts, agency warns

NPK Media has warned that small businesses risk eroding customer trust by relying too heavily on AI-generated advertising. The warning follows survey data showing that 78% of Britons would trust a brand less if it used AI-generated actors in advertising.

The Liverpool creative agency said the spread of AI tools had made it faster and cheaper for smaller companies to produce adverts, images, video and written marketing material. However, it argued that replacing too much of the creative process with automated content could undermine the authenticity many smaller brands rely on.

Research cited by the agency came from YouGov, which found widespread scepticism among British consumers towards AI-generated actors in marketing. The figures suggest a potential gap between businesses' growing use of AI tools and public comfort with AI-led campaigns.

Stephen Brookes, Founder of NPK Media, said businesses should distinguish between using AI as a tool and allowing it to drive all creative work.

"AI can be incredibly useful, and any businesses completely ignoring it are probably missing out. But the danger comes when companies see it as a shortcut to replacing creativity, experience and genuine human understanding.

Advertising is ultimately about building a relationship with an audience. Small businesses, in particular, depend on trust. Their customers want to know who they are dealing with, what they stand for and why they should believe in them.

If every advert and social media post starts to look and sound the same because it has been generated using the same tool, businesses risk losing the personality that makes them stand out.

Consumers are also becoming more cautious about what they see online. That means trust is going to become even more important.

A business might save money by generating an advert in a matter of minutes, but if that advert feels generic, artificial or disconnected from the reality of the business, the long-term cost could be much greater.

The best marketing doesn't just fill a content calendar. It communicates something real about the people, products and values behind a business," Brookes said.

The debate comes as generative AI becomes more common in marketing departments and among owner-managed firms with limited budgets. For many smaller businesses, such tools offer a way to create content without paying for agencies, production crews or in-house specialists.

However, the agency said low-cost production can carry risks if customers feel content lacks originality or does not reflect the people behind the business. The issue may be particularly acute for local and independent firms, which often compete on personal service, reputation and credibility rather than scale.

Platform scrutiny

Brookes also said some online platforms were getting better at identifying AI-generated material and adjusting how it was treated. That could create an additional commercial risk for businesses that depend on digital reach to attract customers.

"There's also a bigger issue that many small businesses haven't considered yet: the platforms themselves are getting better at spotting AI-generated content, and some are already adjusting how they treat it. If your content gets flagged as artificial, it may get less visibility, regardless of how good it looks on the surface.

Some businesses proudly show off an AI-generated advert, convinced it looks just as good as anything a big studio could produce. Technically, sometimes it does. But there's a real difference between something that looks polished and something that actually connects with people. Customers can often sense that difference, even if they can't always explain why.

Small businesses don't have the marketing budgets of national brands, so they simply can't afford for their advertising to backfire. A damaged reputation is much harder, and far more expensive, to rebuild than a scrapped campaign.

The turn against AI slop has come much quicker than anyone anticipated. People are now extremely dubious of posts they think are AI-generated because anyone could have made them. The number one metric for businesses in 2027 will be trust and relationship-building with real people.

If you are using AI, do it to speed up research, tighten copy, or handle repetitive tasks that eat into time you don't have. But when it comes to ideas, leave that to your people. The storytelling and final decisions are where the real value of a small business comes through, and it's not something a machine can replicate," Brookes said.

He said businesses did not need to abandon AI altogether, but should use it selectively in support functions rather than as a substitute for judgment and brand identity. That approach would allow firms to retain some of the technology's efficiency benefits without weakening the human qualities customers notice.

"Technology should support good marketing, not replace the thinking behind it. For small businesses, trust is often their competitive advantage.

The businesses that succeed won't necessarily be the ones producing the most content at the lowest cost. They'll be the ones creating work that people recognise, remember and believe," Brookes said.