IAB sharpens AI disclosure rules for ads

The Interactive Advertising Bureau has released Version 2 of its AI Transparency and Disclosure Framework, narrowing disclosure to cases where artificial intelligence materially affects authenticity, identity or representation in consumer-facing ads. The update keeps the industry on a targeted, risk-based footing rather than requiring a label on every advertisement that uses AI in some form. According to the bureau, the framework is meant to help advertisers, agencies, publishers, platforms and technology companies decide when AI use should be disclosed to consumers and when it should not. David Cohen, the group’s chief executive, said trust depends on the right transparency and disclosure standards, while Caroline Giegerich, its vice-president for AI, argued that labeling everything would teach consumers to ignore labels and could hurt advertisers. The new guidance says disclosure is needed when AI materially changes what a consumer could reasonably believe is real. That includes images and videos generated from prompts, some synthetic voices, synthetic avatars, digital twins of deceased people, digital twins of living people placed in fabricated situations outside standard brand endorsements, and AI chatbots or assistants that could be mistaken for humans. By contrast, the framework says many routine uses generally do not require disclosure. Those include post-production work, internal workflows, clearly fantastical imagery, authorized synthetic voices of real people, generic synthetic voices, background music, standard audio enhancement, digital twins used in normal brand endorsements, obvious cartoon or stylized avatars, and text or copy. The bureau said the update reflects a faster-moving regulatory environment in the United States, Europe and Asia. It cited New York’s synthetic performer law, California’s SB 942, South Korea’s revised AI Basic Act and Article 50 of the European Union’s AI Act, which took effect on 2 August. The European Commission also published a voluntary Code of Practice in June to support the EU rule. For U.S. advertisers, the framework says either a standardized sparkle icon or a clear text label can satisfy the disclosure requirement. In the European Union, Article 50 requires disclosure of AI-generated content and deepfakes but does not mandate a specific icon, and the common EU symbol has yet to be finalized. The bureau first issued its AI disclosure framework in January, alongside research with Sonata Insights. It said that more than half of consumers wanted brands to disclose when an ad was fully AI-generated or used AI imagery or video, and that 73% of Gen Z and millennial consumers said clear disclosure would increase, or would not affect, their likelihood of buying a product. IAB said the working group’s central challenge was avoiding under-disclosure, which can leave consumers misled, and over-disclosure, which can create unnecessary risk for advertisers. The updated framework also includes accessibility requirements for the standardized label.