The consequences of hiding generating artificial intelligence content can vary, as Sports Illustrated is discovering, from sharp, quantifiable drops in revenue to more subtle losses in brand value.
According to public filings, the publicly traded Arena Group’s share price has plunged 20% since the gen-AI content scandal broke on Tuesday, wiping off millions of dollars in value. The Arena Group runs Sports Illustrated, although Authentic Brands Group owns the brand.
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Eunice Shin, a partner at the digital strategy firm Prophet, stated that “transparency is essential.” The thoughts of agencies and advertisers are undoubtedly present. Nobody desires to be tricked.
This week, the technology publication Futurism revealed that Sports Illustrated, in collaboration with vendor AdVon Commerce, used artificial intelligence (AI) to fabricate staff writer profiles. The fictitious writers’ bylines were then used to generate and publish buying advice that were monetized through affiliate links.
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Recently, there have been accusations against other publishers, such as Red Ventures’ CNET and Gannett’s Reviewed, of distributing articles generated by artificial intelligence under the pseudonyms of staff writers.
Although consumers should be aware of the source of the content they are consuming, publishers should experiment with the technology as they face growing challenges from gatekeepers in distribution and a sluggish ad market, according to Shin. By deceiving readers, publishers run the risk of making the already deteriorating consumer faith in the media even worse.
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According to brand strategist Ben Dietz, being fooled can damage these publishers’ brands and put them at danger of facing negative publicity that could affect their reputation and bottom line. Advertising depends on brand equity and trust, and unethical commercial activities directly contradict these principles.
Risk to business and reputation
However, Max Willens, a senior analyst at Insider Intelligence, notes that publishers also largely rely on the cachet of their brand to draw readers and advertisers in an extremely crowded media landscape.
“The only thing publishers have left is their brand, unless they are among the select few whose content draws a critical mass of valuable audience,” Willens stated. “It is a mistake to do anything that puts that in danger, and you need to weigh the risk against any potential short-term gains.”
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