ANA’s New AI Contract Rider Sets Legal Standards for Advertisers and Agencies

Inside the ANA’s New Legal Gen AI Template For Advertisers And Agencies

The rise of generative AI technology has introduced uncertainty in the relationship between brands and their agencies. Advertisers often find themselves unsure about what legal questions to ask regarding AI use. To address this, the Association of National Advertisers (ANA) recently introduced a standardized AI contract rider. This rider can be appended to service agreements between advertisers and agencies to clarify legal and practical issues related to generative AI.

Purpose and Scope of the AI Contract Rider

The AI rider covers key points such as mandatory disclosure of AI usage, ownership of AI-generated content, and ethical considerations including misinformation and data privacy. It helps advertisers ensure their legal interests are protected when incorporating AI tools into their campaigns. Greg Wright, ANA’s SVP of brand and media, emphasizes that transparency is crucial so that agencies do not take unauthorized actions with AI.

Development Background

The ANA’s Advertising Financial Management Committee noticed a surge in AI-related questions from members about seven months ago. Brands were encountering unfamiliar AI clauses in contracts or unclear policies about agency AI use. To provide clarity, ANA collaborated with legal experts from Venable LLP to draft the rider. An informal checklist was also created to explain the key points in straightforward language.

Though the rider specifically addresses generative AI, it was crafted flexibly to accommodate different advertiser and agency needs and to align with evolving AI laws, including those in California, Colorado, and the European Union.

Key Provisions of the Legal Template

Disclosure and Human Oversight

The rider requires agencies to disclose any use of AI tools in creating work outputs. AI-generated content must not be presented as human-produced. Additionally, there must be human oversight on AI outputs, with clients acknowledging that AI work may contain errors or outdated information.

Ethical Use and Limitations

Agencies are prohibited from using AI in ways that could cause harm, such as impersonating individuals or engaging in discriminatory profiling. The rider forbids intentional distortion of images to spread misinformation and bans AI use for unsolicited marketing promoting harassment, violence, or hate speech.

Furthermore, AI tools cannot be applied in sensitive areas like employment, education, housing, finance, insurance, healthcare, or legal services without careful consideration. The rider leaves the exact definition of “high-risk” uses open for agencies and advertisers to decide.

Ownership and Copyright

The rider generally grants copyright ownership of AI-generated work to the client, provided the work qualifies for copyright protection. Work created from unlicensed third-party training data or disallowed by government authorities may not be eligible for copyright.

It also warns that similar AI outputs can occur for different clients, potentially limiting enforceability of copyrights against third parties. If an advertiser suspects their AI assets resemble those of another client, legal recourse might be limited.

Transparency on Training Data and Security

Agencies must disclose how their AI models are trained and ensure all input data is legally and ethically sourced. Transparency is also required regarding the use of third-party AI tools.

Looking Ahead

The ANA has not yet reported on how widely the rider has been adopted but notes positive feedback from members appreciating its customizable nature. Updates to the rider will likely follow significant legal developments rather than a fixed schedule.

Ultimately, the rider is intended to start a broader dialogue between advertisers, agencies, and their legal teams about AI’s role in advertising. The focus is on clear communication and transparency to manage AI integration responsibly.

For legal professionals seeking to deepen their expertise in AI-related contracts and compliance, exploring specialized AI certification courses can be highly beneficial.