Should AI-generated ads be regulated like influencer ads?

Artificial Intelligence (AI) is revolutionizing the way brands advertise products and services. With capabilities such as deepfakes, hyper-targeted personalized ads, and emotionally persuasive content, AI-generated advertisements are becoming increasingly sophisticated. However, as AI is used to craft content that may mimic real people or influence consumer behavior more subtly, concerns about transparency, accountability, and ethical implications arise. This has led to the question of whether AI-generated ads should be regulated similarly to influencer marketing, which has strict guidelines to ensure truthfulness, transparency, and consumer protection. Given the power of AI in shaping consumer decisions, regulating AI-generated ads may become necessary to maintain ethical standards in digital advertising.

Why Should AI-Generated Ads Be Regulated Like Influencer Ads?

• Transparency and Disclosure: Just as influencers are required to disclose paid promotions to maintain transparency, AI-generated ads should also be clearly labeled as synthetic content. Failure to disclose AI-generated media can mislead consumers into thinking they are engaging with real, authentic content. When AI mimics real people, companies or AI developers should disclose the use of AI to avoid deceptive practices.
• Example: Imagine an AI-generated ad featuring a famous celebrity endorsing a product. The ad is designed to mimic the celebrity's appearance, voice, and behavior, but no clear indication is given that the celebrity’s likeness is not real. Consumers might be deceived into believing the celebrity genuinely supports the product. AI-generated ads should require clear disclosures to ensure authenticity is not misrepresented.
• Avoiding Deceptive Practices: AI technology, especially deepfake technology, can be used to create highly convincing but entirely fabricated content. Without regulation, AI-generated ads could easily cross the line into deception, particularly when they use synthetic media to create false impressions about a product’s effectiveness, a celebrity endorsement, or even a consumer's experience with a product.
• Example: A company could use deepfake technology to create an ad showing fake before-after results for a weight loss supplement. The AI-generated images and videos may seem convincing, but they are entirely fabricated. If these ads are not regulated, consumers might be tricked into buying the product.
• Targeted Persuasion and Manipulation: AI-driven ads can leverage consumer data to target individuals with hyper-personalized content that is often designed to trigger emotional responses, drive impulse purchases, or manipulate behavior. While this form of persuasive advertising is already common, AI has the potential to make these tactics more sophisticated and harder to recognize. Such manipulation, if left unchecked, could erode consumer autonomy and privacy.
• Example: AI could create an ad that targets a specific individual based on their browsing history, emotional state, or personal vulnerabilities (e.g., targeting someone feeling lonely with an ad for a friendship app). This type of manipulation could be seen as unethical, especially if consumers are unaware of how their personal data is being used to craft such content.
• Protection Against Harmful Content: AI-generated ads can also be used to promote harmful or dangerous products, including unproven health supplements, scams, or fraudulent financial services. Just as influencer ads are regulated to prevent the promotion of such products, AI-generated ads should be held to similar standards to prevent consumer harm.
• Example: An AI-generated ad might promote a miracle health product, using persuasive and emotionally charged imagery and language. While the product may have no scientific backing, the AI’s ability to craft compelling narratives could deceive consumers into making harmful financial decisions.
• Accountability for AI-Generated Content: Currently, the responsibility for AI-generated content is unclear. In influencer marketing, influencers are legally accountable for the ads they promote, and so are the brands. However, with AI-driven ads, the lines of responsibility are less obvious. Should AI companies, brands, or both be held accountable for the outcomes of an AI-generated ad campaign? Clear regulation would establish responsibility and protect consumers.
• Example: If an AI-generated ad promoting a fake health product leads to consumer losses or harm, it may be difficult to hold the AI platform accountable unless the ad is subject to regulatory scrutiny. Regulating these ads would provide a legal framework to ensure accountability.

Challenges of Regulating AI-Generated Ads

• Determining Ethical Boundaries: AI technology is advancing rapidly, and the ethical boundaries of what constitutes deceptive or manipulative advertising can be difficult to define. For example, should an ad featuring AI-generated voices of deceased people or historical figures be banned, or should it be allowed with clear disclaimers? These questions raise concerns about where to draw the line in AI advertising regulation.
• Example: If an AI-generated ad uses the voice of a famous politician to promote a political agenda, even though the politician did not endorse the message, how should it be regulated? Defining clear ethical guidelines will be complex and subjective.
• Keeping Up with Technological Advancements: The pace at which AI technology is evolving poses another challenge for regulators. New techniques for creating synthetic content, hyper-targeting audiences, or manipulating consumer behavior are continually being developed. Regulations will need to be flexible and able to adapt quickly to keep up with technological advancements.
• Example: The use of generative AI tools like OpenAI’s GPT series could create entirely new forms of personalized, persuasive ads that target consumers based on their language, emotions, or historical behavior. Regulation would need to evolve to address these new tactics.
• Balancing Innovation and Regulation: Strict regulation of AI-generated ads could stifle creativity and innovation in the digital marketing space. Companies may be reluctant to adopt new AI technologies if they fear regulatory scrutiny or penalties. Striking the right balance between ethical standards and allowing innovation will be key to maintaining a healthy advertising ecosystem.
• Example: A brand may want to use AI to create an engaging, personalized ad experience, but overly strict regulations could limit their ability to use certain AI tools effectively, potentially leading to missed opportunities for engagement.
• International Enforcement: AI-generated ads transcend borders, and while countries may regulate AI ads within their own jurisdiction, the global nature of digital content makes enforcement more challenging. Content created in one country could be viewed worldwide, and differing national laws could create confusion regarding what is and isn't allowed.
• Example: An AI-generated ad that violates advertising standards in one country may be easily accessible in other countries with less stringent regulations, creating a regulatory loophole.

Example

Imagine a financial services company that uses AI to generate a persuasive advertisement for a new investment product. The ad features a simulated celebrity endorsement using deepfake technology, showing the celebrity talking about the benefits of investing in the product. The ad is targeted to individuals who have shown an interest in investing, but the product is actually a scam.

• Steps to take:
• Regulatory Action: The financial regulator in the country notices the AI-generated deepfake and investigates whether the advertisement violated consumer protection laws regarding deceptive advertising.
• Legal Action: If the ad is found to be fraudulent, the company behind the AI ad could be required to remove the content and face penalties.
• Consumer Protection: Consumers who were deceived by the ad might be entitled to compensation or restitution for their financial losses.
• AI Disclosure: Future ads using AI technology would need to include a clear label or disclaimer indicating that the content was created using artificial intelligence, ensuring consumers are aware of the synthetic nature of the ad.

Conclusion

AI-generated ads should be regulated similarly to influencer ads to protect consumers from deception, ensure transparency, and maintain ethical advertising standards. While there are challenges in regulating such content, including defining ethical boundaries, keeping up with technological advancements, and balancing innovation with regulation, the potential for consumer harm and manipulation is high. Therefore, clear and adaptable regulations are necessary to hold brands, AI developers, and platforms accountable for the content they promote. Transparency, disclosure, and ethical standards will be key in ensuring that AI-generated ads contribute positively to the advertising ecosystem.