Who: The Committee of Advertising Practice (CAP) and the Advertising Standards Authority (ASA)
Where: United Kingdom
When: May to June 2025
Law stated as at: 10 July 2025
What happened:
Artificial intelligence (AI) is revolutionising the marketing and advertising industry. CAP heralds AI as “game-changing technology”, and the ASA highlights its “multiple benefits”, including lower cost ad creation, hyper-personalisation and improved customer experience.
As businesses increasingly integrate AI into their strategies, understanding the legal implications and best practices is vital. This article explores the regulatory landscape for AI use in advertising and marketing, reviews recent guidance, and provides key practical takeaways for businesses.
Disclosure
There is no blanket legal requirement in the UK to disclose the use of AI in ads. However, CAP advises that advertisers must be prepared to comply with the requirements of the EU’s AI Act, which became law in August 2024 and is being implemented across the EU. Additionally, under the twelve guiding principles on the use of generative AI in advertising (published by the Incorporated Society of British Advertisers and the Institute of Practitioners in Advertising in 2023) advertisers must be transparent in their use of AI, especially where it plays a significant role and may not be immediately apparent to consumers.
CAP suggests that UK advertisers using AI can avoid creating misleading ads by asking themselves two questions when deciding whether to disclose its use:
- Is the consumer likely to be misled if the use of AI is not disclosed?
- If there is a danger of misleading consumers, does disclosure clarify the ad’s message or contradict it.
In the UK, using AI to manipulate sounds and images much like traditional post-production techniques will not require regulatory disclosure, simply because AI is used. As long as it is not used to materially mislead, using AI to make such changes more quickly and at lower cost does not necessarily warrant disclosure. However, disclosing the use of deepfake content for comedic purposes or the use of an AI-generated influencer could help reduce harm by negating an otherwise misleading impression, according to CAP.
What should advertisers and marketers do?
Regulators emphasise the need to comply with fundamental principles when using AI in advertising. CAP provides practical tips to comply with the relevant rules, including rules on misleading consumers, testimonials and endorsements. Harmful, offensive or irresponsible content remains unacceptable, regardless of whether it contains AI generated or assisted content, signalling that the regulatory background remains unchanged despite technological advances.
The ASA’s chief executive’s comments, in his recent article, stress that advertisers using AI “can’t abdicate responsibility for the creative content”. He warns that AI can miss the nuances of judging current standards in society, and encourages implementing human checks and balances.
Overall, AI can produce cheaper, more engaging and relevant ads, benefiting both businesses and consumers. The ASA is also harnessing the power of AI to regulate the ad space more efficiently, by monitoring and analysing ads to efficiently identify potential breaches of advertising codes. Last year, it scanned around 28 million ads for compliance and anticipates scanning 50 million in 2025. This proactive approach helps protect consumers from misleading or harmful content, and advertisers must be prepared to operate within a robust and responsive regulatory framework.
Key takeaways for businesses using AI for ads and marketing content include:
- Understand the regulatory landscape: familiarise yourself with ASA and CAP guidelines on AI use in advertising and regularly review updates to ensure compliance.
- Implement human oversight: ensure to implement human checks and balances to review AI-generated content for societal nuances and ethical considerations.
- Avoid misleading content: ensure that AI-generated ads do not materially mislead consumers. Regularly assess if AI use needs disclosure to avoid confusion.
- Transparency: be transparent about AI use, especially if it significantly impacts consumer understanding.
- Monitor AI outputs: continuously monitor AI tools to ensure alignment with advertising standards and ethical guidelines. Adjust algorithms as necessary.
- Training and awareness: educate your marketing team on AI’s potential pitfalls and best practices. Emphasise the importance of regulatory adherence.
- Stay informed on EU regulations: keep abreast of the EU’s AI Act and other international regulations to ensure compliance across jurisdictions.
- Leverage AI for efficiency: use AI to enhance ad creation and personalisation within ethical and legal standards. Balance creativity with responsibility.
By following these steps, businesses can effectively harness the power of AI in advertising while maintaining compliance and ethical standards, ultimately benefiting both businesses and consumers. For further guidance and expert advice on navigating the evolving regulatory landscape, consider reaching out to Osborne Clarke.
Why this matters: AI offers significant benefits for advertising, such as cost efficiency and enhanced personalisation. However, businesses must navigate the legal and ethical implications to avoid misleading consumers. The ASA and CAP stress the importance of transparency and human oversight in AI-generated content. Compliance with evolving regulations, including the EU’s AI Act, is crucial. By understanding the regulatory landscape and implementing best practices, businesses can harness AI’s power responsibly, ensuring both innovation and adherence to advertising standards.
