By Cynthia Martens
As artificial intelligence (AI), in particular generative AI, continues to develop at a rapid pace, the fashion industry is exploring how marketing campaigns can leverage this technology — but companies using AI to boost promotional efforts should be aware of some important legal issues.
AI has many possible uses in advertising. For example, it can be used to determine when and where companies should reach their audiences. AI can also be used in ad creation, either by quickly generating text, speech and visuals or by accelerating the photo editing processes. In addition, companies might be considering the use of AI-generated "influencers" to endorse their products on social media. However, AI is not free from legal and regulatory restrictions. How companies use AI is governed, for example, by the Federal Trade Commission (FTC), which has the authority to monitor and address advertisements that are untruthful, misleading or deceptive. "The FTC is keeping a close watch on the marketplace and company conduct as more AI products emerge," the agency said in a post on its technology blog.
Just as companies assess any other advertisements under FTC standards, ads created by AI or ads referencing the use (or nonuse) of AI in products or services are subject to the same evaluation, ensuring they are not making false or misleading claims and that any claims made can be substantiated.
These standards also extend to influencer marketing. Already, virtual supermodels such as Imma, Shudu and Lil Miquela command impressive audiences, as The New York Times noted in an article titled "These Influencers Aren't Flesh and Blood, Yet Millions Follow Them." The FTC requires that endorsers disclose their relationship to the company and that they must not be deceptive about their experience with the product. This means that influencers cannot say that they loved products that they hated, cannot review their experiences with products that they have not tried, and cannot make any claims about products that would be deceptive if made by the company. Additionally, evidence is mounting that consumers want to know when they are interacting with AI — consider New York Senate Bill 8209, which was referred to the Committee on Science and Technology earlier this year and provides for a "right to know when an automated system is being used." Since virtual figures cannot try tangible products like clothing in the real world, any claims regarding their experiences with such physical products may invite scrutiny. In addition, human influencers may run afoul of FTC or other rules by using AI-generated content in their posts without proper disclosures. Because companies may be responsible for the false or misleading claims of the influencers they hire, businesses should specify in agreements whether and how influencers are permitted to incorporate AI into their endorsements. If they allow AI, best practices include ensuring that all claims are factual and supportable and have proper disclosures.
The development of AI presents exciting new possibilities in the advertising space. When used properly, it can allow fashion companies to achieve new creativity, efficiency and effectiveness in their marketing campaigns.
*Summer associate Emmaline Friederichs contributed to this article.
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