Ethical AI in Advertising: What Regulations Will Force Brands to Change

The incredible uptake of AI in marketing since the debut of Chat GPT in 2022 - making it the fastest growing consumer software application ever - has changed the online and offline world almost unimaginably in just a few short years. And it still continues to evolve at a very fast pace. Although an incredibly powerful tool, there a whole host of complex questions to consider when thinking about its ethical use in advertising. Not least of which are what regulators and governments the world over are already doing to manage and mitigate some of its more concerning effects. But what does this all mean for the business?

finger touching digital ads interface in urban setting showcasing technology
Image by cube29 on Freepik

This article will look at what is happening right now in the world of advertising with AI and what is truly a very good technology for. But also, what challenges and criticisms have been stumbling blocks for development of its use in the sector, and what the US government and others the world over are doing about it.

The State of Play - What Brands Are Doing with AI and It's Current Capabilities

When it comes to using AI in advertising, you might immediately think of AI written copy and AI created images. Which is mostly done to save money hiring copywriters and paying stock image sites. And yes, some brands do use it that way in advertising - for which, as seen later in the article, they have often been criticized. Especially when it is not used correctly, with well crafted prompts that avoid generic responses and oversight from an editor or fact checker.

Professional branding agencies can help navigate the evolving landscape of this technological revolution, in a way that individuals or those not used to it simply cannot. AI is an incredibly powerful, society-altering tool - but with so many people now using it, only a few know how to really get the most out of it while avoiding the pitfalls. Integrating AI into brand strategies requires multi-stage professional knowledge that many companies and small businesses just don't have in house.

The real cutting edge uses of AI are for quick personalisation in advertising. There are AI tools now that can quickly write thousands of emails or ad scripts, that can be tailored to deep aspects of people's personal profiles constructed through online data. Individually tailored images and copy, to maximise conversion of any specific person. This is what AI can do today.

The reality is more than 70% of marketing firms now use AI in some way, although not always for public-facing advertising. Clearly it has been very useful for advertising, but there are ethical and business pitfalls to consider as part of a calculated risk.

Brands Have Faced Public Backlash for Using AI (Specifically Images) in Many Cases

AI images, while excellent and capable of fooling many people, are still not entirely perfect. Even the newest generators all have tell-tale signs, with around 60% to 70% of AI images identified in some studies. But, that isn't much better than random chance picking and the generators are getting better.

But, when people can tell, a lot of them don't like it that much. Many big brands have used AI in advertising in recent years and have faced public criticism from many corners over it. Especially in high value businesses, the use of AI has become somewhat associated with so-called "slop" content. Which, aside from the ethical implications, has also been quite damaging for brand values in some cases.

In some ways its more expected in online advertising. But people who specifically avoid AI and don't use it themselves have been shown to be more likely to disprove of AI generated images in real-world products and advertisements for them. People who work in the creative fields such as graphic design, stock image production and other jobs that AI can now do at least to a passably professional standard are also more likely to take a dim view of its use in advertising.

What Governments Around the World Are Already Doing About It

The European Union has been one of the most aggressive governments in the world in pushing back against AI in advertising and other areas. Since 2024 it has had a law that all images, audio or video files created by EU companies using AI must be clearly labelled before publication - which goes for advertising too. Quite how policing this law is going is not yet clear. One global study found that only around a third of AI images published on social media had a watermark or metadata identifying them clearly as such.

Just a few other initiatives, laws and regulations passed by governments around the world in the past couple of years around AI in advertising include: