New York State may soon have an AI ad disclosure law
Did you know that New York State is getting close to having an AI advertising disclosure law? Don’t feel bad if you didn’t. It hasn’t been talked about much, but it definitely needs to be.
What’s the scoop on the New York advertising disclosure law?
New York State legislators have passed a bill that would require advertisers to disclose when a "synthetic performer" was used in advertising. SAG-AFTRA has praised the bill, but some ad trade associations including the ANA have come out against it. The bill has gone to New York's governor for signature.
What would the New York advertising disclosure law mean for advertisers?
If passed into law, the bill would require advertisers to disclose when an AI-generated "performer" appeared in an ad. The bill is far from guaranteed to pass into law, however, and it's already been through revisions. Recently, radio broadcasting companies were able to amend the bill to exclude audio advertising, for instance. And the ANA asserts the bill would inject "compliance uncertainty" into the advertising process.
Read the New York Assembly bill
How do consumers feel about ads created with AI?
Disclosure is typically pitched as a way to protect and inform consumers, but it's not clear whether consumers want or care whether the advertising they see contains AI-generated characters.
In research I did last year with IAB, three-quarters of ad industry executives said they at least sometimes disclosed when an ad is generated by AI.
But there is nuance to the decision to disclose. While it may be easy to assume it’s always necessary (similar to how influencer endorsements must carry a disclosure), the impact on consumer attention and trust was mixed in our study. For example, less than one-third of Gen Z and Millennial consumers (31%) said clear disclosure that AI was used to create an ad would cause them to pay more attention to it.
And while about one-third (31%) said their trust in a company would increase if they knew an ad was created with AI, about a quarter (27%) would trust a company less if they knew an ad was created with AI.
What’s at stake with the New York AI advertising law?
The use of AI in advertising was a hot topic at the Cannes Lions advertising festival. Many executives I met with felt that AI-generated ads will be more prevalent and that we'll soon see more ads like the Kalshi ad that got so much attention earlier this month. But in private conversations, they said they believed disclosure wasn't absolutely necessary.
To me the issue comes down to intent.
If the intent in using AI is to trick or deceive consumers into believing something is true (such as an AI character giving a testimonial or endorsement for a product or service), then there absolutely should be rules/laws against it, and penalties akin to those given for false advertising. But being forced to disclose an AI voice or AI representation of a human seems unnecessary.
