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The Complexities of AI-Generated Advertisements

AI-generated advertisements present a paradoxical challenge for digital marketers. While they enable innovative and engaging content creation, they also raise significant legal concerns. Marketers must be well-informed about the potential legal ramifications associated with their use of artificial intelligence (AI) in advertising campaigns.

New Regulatory Landscape in New York

Recently, the increasing integration of AI into advertising prompted the state of New York to enact groundbreaking legislation. Signed into law on December 11, 2025, by Governor Kathy Hochul, S.8420-A/A.8887 establishes stringent compliance requirements with financial penalties for advertisers who do not adhere to them. This legislation is unprecedented in its approach, necessitating transparency in various forms of digital and social advertising.

Requirements for Transparency

Under the new standard, advertisers must provide a "conspicuous disclosure" whenever an advertisement features a "synthetic performer." This requirement sets a clear expectation for transparency in commercial advertisements that utilize AI technology.

Understanding "Synthetic Performers"

Definition and Implications

According to the statute, a "synthetic performer" refers to a digitally generated persona that is developed or altered through artificial intelligence or algorithms. The aim is to mimic or replicate a human performance, but without the recognition of an identifiable real-life performer. In layman’s terms, these digital creations can appear as human-like characters in advertisements, raising questions about representation, authenticity, and transparency.

Disclosure Obligations

For businesses and individuals engaged in producing advertisements, the law mandates that they must "conspicuously" indicate the presence of a synthetic performer in commercials. This applies to all persons, firms, corporations, or associations involved in any aspect of advertising concerning goods or services in New York. Importantly, this disclosure must be clear and easily noticeable; it cannot be relegated to fine print or obscure locations in the advertisement.

Importance of Expert legal Guidance

Given the sweeping implications of this new law, companies using AI in creative contexts—be it social media, influencer marketing, or branded content—should seek counsel from experienced FTC compliance attorneys. legal expertise will be crucial in understanding how this law applies to both first-party and third-party marketing initiatives and in developing adequate contractual frameworks to limit liability. Moreover, businesses need to implement internal auditing processes to verify that AI-generated likenesses comply with these new mandates before they are disseminated.

Penalties for Non-Compliance

Advertisers who fail to comply with these disclosure requirements face more than just reputational harm; they face substantial financial penalties. The initial offense carries a civil penalty of $1,000, while subsequent violations can result in fines up to $5,000. As such, insufficient compliance can quickly escalate into significant financial burdens, alongside the costs associated with potential litigation.

Exemptions to the Law

The legislation does include certain exclusions. Advertisements for expressive works like films, video games, and documentaries are not subject to these rules. Similarly, AI deployments used solely for translation purposes are exempt, as are specific media outlets that may publish or distribute such advertisements.

The Broader Context of Publicity Laws

In addition to the AI-related regulations, it’s worth noting that New York has expanded its posthumous right of publicity law. This law mandates consent from the heirs or executors of deceased individuals for commercial use of their likenesses. This implies further legal complexities for advertisers who wish to engage synthetic performers that represent deceased personalities, as unauthorized use can incur considerable statutory damages.

Key Takeaway: Stay Informed and Compliant

The evolving legal framework surrounding AI-generated advertising underscores the necessity for marketers to stay informed about the latest requirements. As of June 2026, advertisers must provide conspicuous disclosures revealing the use of AI-generated "synthetic performers" in commercial content distributed in New York. Furthermore, businesses involved in creating such materials must prepare for compliance or risk facing significant penalties.

Leveraging AI legalese decoder for Compliance

In navigating this complex legal landscape, the AI legalese decoder emerges as a valuable tool. This innovative platform can assist marketers and advertisers in understanding the intricate legal jargon associated with this legislation. By breaking down complex legal concepts into more digestible information, the AI legalese decoder allows organizations to ensure they are in full compliance with the new laws while maintaining their creative edge. By utilizing this resource, businesses can clarify their obligations, streamline their compliance processes, and ultimately protect themselves from potential legal pitfalls.

In summary, as the intersection of AI and advertising continues to evolve, understanding and complying with the associated regulations will be crucial for the success and legality of marketing efforts in New York and beyond.

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