AI and advertising

A report by McKinsey in 2023 estimated that AI technology has the potential to add between $2.6 trillion and $4.4 trillion annually to the global economy. This technology has become increasingly accessible to the public and is being utilised by both businesses and consumers. As such, marketers are employing AI terminology to promote a diverse range of products. For example:

• Apple is highlighting the AI capabilities of its new “Apple Intelligence” feature, particularly in assisting with writing tasks, creating personalised images and cross-referencing between iPhone apps to keep diaries up to date;
• Google markets its AI-powered Gemini Assistant as a key feature in Android smartphones. The ads often show how the Assistant can manage your day, brainstorm with you and provide personalised recommendations; and
• Tesla’s marketing often focuses on the AI-driven capabilities of its Autopilot feature that allows cars to drive themselves under certain conditions. The ads typically focus on the safety and convenience of having an AI-driven vehicle. 

The ASA’s guidance

In an attempt to prevent the misleading of consumers by marketers regarding the nature and capabilities of their products, the Advertising Standards Authority (the “ASA”) has issued guidance outlining recommended and prohibited practices to ensure compliance with the existing UK Advertising Codes when advertising AI-enabled products. Some key parts of the guidance are as follows.

1.  Do not falsely claim that the product uses AI.

The ASA advises that the use of AI in the development process, i.e., through automation, analysing material options or prototype testing, is distinct from the finished product having AI in it. This warning aligns with rule 3.1 of the Non-broadcast Code (“CAP Code”), which states that marketing communications must not, or be likely to, materially mislead. 

2. Do not exaggerate what your AI product can do. 

The ASA advises marketers to refrain from making claims that exceed the capabilities of current AI or automated technology. It is the responsibility of marketers to clearly define the features AI delivers in their products, explain why these features benefit the consumer, and ensure they hold substantiation for any performance claims they make. This guidance is in line with CAP Code rules 3.11 and 3.12, which advise against exaggerating the capability or performance of a product, and CAP Code rule 3.7 which requires marketers to hold documentary evidence to prove claims. 

Furthermore, the ASA has stated that if claims are only applicable in certain circumstances or for specific users, the advertisement could be misleading if this is not clearly stated. This is in line with CAP Code rules 3.9 and 3.10, which stipulate that any significant limitations or qualifications must be transparently disclosed in any marketing communications. 

3. Do not claim that your AI product does something better than a non-AI product, unless you have good evidence. 

Any comparative claim that an AI product has an advantage over a non-AI product must be supported by sufficient evidence. In the absence of such evidence, the ASA suggests advertisers avoid making the claim. 

Marketers must comply with rules 3.33 and 3.35 for any comparative advertising. These rules state that any marketing communications that includes a comparison with an identifiable competition must not mislead consumers about the advertised or competing product. They also require that any comparison must be objective and focus on a comparison of one or more verifiable and representative feature of the product. 

4. Be aware of the risks.

The ASA completes its guidance by warning marketers that they are responsible for ensuring their marketing complies with the Advertising Codes. Marketers cannot absolve themselves of liability by attributing responsibility to third parties or claiming lack of understanding of the technology or testing procedures. This final direction is in alignment with CAP Code rule 1.8, which states that marketing communications must comply with the CAP Code and that the primary responsibility for observing the CAP Code falls on marketers. 

The ASA concludes by advising marketers that other regulators may impose additional requirements on the use of the term ‘AI’. For instance, the Federal Trade Commission in the United States has recently revised its guidelines on the use of AI in advertising. It provided guidance to marketers on the legal and effective use of AI in advertisements, while also advising them on how to avoid the pitfalls of “AI washing” - a term, inspired by “greenwashing”, whereby adverts make false and misleading claims about the use of AI. Furthermore, the US Securities and Exchange Commission has recently imposed a fine of $400,000 on two investment firms for engaging in “AI-washing” practices. 

Previous decisions of the ASA

In October 2023, a paid-for Instagram post for an app featured a split image, with the image on the left blurred and the image on the right of a higher resolution. The caption of the post read, “Enhance your Photos with AI”. 

The complainant questioned whether the ad was misleading in its representation of the product’s capabilities. The ASA upheld the claim, finding that the app did not provide any evidence to demonstrate how it worked or the results that could be achieved using it. In the absence of adequate evidence to demonstrate that the results depicted in the ad were achievable, the ASA concluded that the ad exaggerated the capabilities of the app and was therefore misleading. The ad was in breach of CAP Code rules 3.1, 3.7 and 3.11. 

Key takeaway

The key takeaway from this recent guidance is that the primary responsibility for ensuring that the ad complies with the Code remains with the advertiser. The reference to ‘AI’ in marketing does not exempt advertisers from adhering to the standard rules governing misleading adverts. The ASA will continue to consider both the overall impression created by the advertisements and the specific claims made in them. It will rule on the basis of the likely effect on consumers, rather than on the intentions of the advertiser.

What can we expect in the future from the ASA?

The ASA has established a five-year plan with specific objectives to ensure that all advertisements are responsible and that individuals are safeguarded from being misled, harmed or offended by them. The strategy includes the following key points:

• scale up its AI-based active ad monitoring system to swiftly act against irresponsible online ads and report on compliant ads;
• propose a regulatory framework for online ads that brings greater transparency and broader accountability to platforms and intermediaries; and 
• work with other statutory regulators and play its part in tackling fraudulent online ads.

This strategy will have a significant impact on the future of promotional marketing activities in the UK. Brands and agencies must ensure their practices align with the ASA's evolving regulations, emphasising responsibility and transparency.