AI Marketing in 2025: Innovation, Compliance, and the Legal Risks You Can’t Ignore

No one can deny that generative artificial intelligence technology (AI) is revolutionizing the business landscape at a blistering pace. This means that, in a competitive market, companies must either keep pace with AI innovation or get crushed by companies that do. AI has especially impacted the marketing landscape, empowering businesses to quickly create better performing ads, target the right audiences more effectively, and optimize campaigns in real time. But, to paraphrase the immortal words of the great Stan Lee, with great power comes great responsibility— and a growing list of legal and compliance risks.

As detailed in previous posts, both the Federal Trade Commission (FTC) and state regulators are cracking down on businesses that misuse AI in advertising, from misleading AI-generated claims to privacy violations and biased algorithms​​. Whether you're using AI to generate videos images, or ad copy, or to target customers or personalize content, you should understand the legal landscape to avoid hefty fines and reputational damage.

What follows is a broad overview of the compliance challenges you will likely face in 2025 if you add AI to your marketing strategy.

The Intersection of AI Marketing and Privacy Laws

AI-powered marketing often relies on collecting and leveraging consumer data, a practice that remains unrestricted by direct federal legislation. However, while Congress continues to sit on its collective hands, state lawmakers have been far from idle in this area. In December of 2024, there were 12 comprehensive state privacy laws in effect, and by the end of 2025, there will be at least 20. These state laws will protect the privacy of over 150 million Americans, and present hurdles for any business looking to collect, use, and share consumer data from residents of those states.

What You Need to Do:

• Update your privacy policies to reflect state law requirements governing AI-driven data collection.
• Ensure you’ve collected appropriate consent before using personal data for AI-powered targeting.
• Be open and transparent in how you use AI.

FTC is Cracking Down on AI Marketing Deception

In the Fall of 2024, the Federal Trade Commission (FTC) commenced a serious crackdown on deceptive AI schemes with the announcement five law enforcement actions brought against companies accused of misusing AI technology in various ways, including:

• Fake AI-generated product reviews
• False claims about AI-powered tools
• AI-driven schemes promising “easy money”

What You Need to Do:

• Be honest about AI capabilities- don’t exaggerate or oversell what your AI-powered tools can do.
• Label AI-generated content when necessary to avoid misleading consumers.
• Monitor how AI is used in your marketing materials; if an AI chatbot or tool is “hallucinating” or making false claims on your behalf, you’re still responsible for whatever it says.

Bias in AI Marketing: A Legal and Ethical Minefield

AI algorithms can sometimes reinforce any biases inherent in the data being used to train them, which could potentially lead to unintended discrimination in ad targeting. Regulators are increasingly scrutinizing biased AI models—and businesses that use them could face lawsuits or fines.

What You Need to Do:

• Audit AI models for bias to help ensure they’re not discriminating based on gender, race, or other protected characteristics.
• Diversify training data to avoid skewed targeting and exclusionary practices.
• Implement human oversight to catch biased AI decisions before they harm your brand.

AI-Generated Content: A Copyright Minefield

AI-generated images, videos, and ad copy are raising huge legal questions about intellectual property. Some AI-generated content may not be protected by copyright—meaning your competitors could copy it without consequences. AI training data could also infringe on existing copyrights, leading to potential lawsuits.

What You Need to Do:

• Check AI-generated content for originality before using it in ad campaigns.
• Clarify content ownership in vendor contracts to clearly show who owns your AI-generated work.
• Stay updated on copyright laws—the legal landscape is shifting fast.

Vendor Contracts: How to Protect Your Business When Using AI Tools

Many businesses rely on third-party AI vendors for advertising and marketing. But there’s a lot that can go wrong with a vendor’s AI, such as biased targeting, false claims, and data misuse, for which your business could be held liable.

What You Need to Do:

• Include clear compliance terms in AI vendor contracts.
• Understand who’s liable if AI-generated content causes legal trouble.
• Ensure data privacy protections to avoid issues with unauthorized data use.

New AI Disclosure Rules

As of this date, a dozen states, including Arizona, Colorado, Florida, and New York, have enacted laws requiring businesses to disclose when AI is used in advertising, marketing, or customer interactions. These laws generally require a clear and conspicuous disclosure when AI-generated content is used in political ads, although their scope of coverage can vary widely depending on the state. For example, some states require such disclosures on any political advertisement that employs AI, while others only mandate disclosures for ads that use AI in a deceptive manner.

Other states have enacted laws governing the use of AI chatbots and virtual assistants. California was the first state to pass such a law, which makes it unlawful to use a bot to mislead consumers into thinking they are interacting with a real person, particularly to encourage a sale or influence a vote. These laws generally require clear and conspicuous disclosure of the nature of the bot, among other things.

What You Need to Do:

• Label AI-generated content when required—especially in high-stakes areas like finance, healthcare, and politics.
• Review state disclosure laws—AI regulations vary widely across the U.S.
• Keep in mind that the list of states that require disclosure of AI in advertising will continue to grow, so when in doubt, disclose.

AI Laws are Changing Fast: What to Expect

Legislators, regulators and judges are desperately trying to keep up with the rapid growth of AI, which means the legal landscape is rapidly evolving. Here’s a glimpse into what we can expect in the upcoming year:

At the Federal Level: An Executive Order signed on January 23, 2025, revoked the previous administration’s Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence, which was perceived as a barrier to American AI innovation. The new administration intends to develop a new AI action plan within 180 days that focuses on AI systems “free from ideological bias or engineered social agendas.”

What this means in terms of workable AI regulation at the federal level is unclear, but it is safe to say that it will likely be in a holding pattern for the foreseeable future. While the FTC and FCC may pursue enforcement actions related to AI, the states are likely to lead the charge in further AI regulations

At the State Level: In 2024, state lawmakers across the United States introduced over 700 AI-related bills, a trend that will only accelerate in 2025, with more than 40 proposals already on dockets in the first days of the new year, including the following:

1. California: The California AI Transparency Act, which focuses on ensuring transparency in the training data used for generative AI systems, is set to take effect on January 1, 2026.

2. Colorado: The Colorado Artificial Intelligence Act, will become effective on February 1, 2026. This law adopts a risk-based approach to AI regulation, similar to the European Union’s AI Act.

3. Texas: The Texas Responsible AI Governance Act (TRAIGA) is expected to pass in 2025, with a proposed effective date of September 1, 2025

4. New York: Legislators are reportedly working on proposals similar to California’s vetoed SB 1047, which aimed to regulate “frontier” AI models.

5. Virginia: The Virginia High Risk Artificial Intelligence Developer and Deployer Act (HB 2094) is under consideration, with a potential effective date of July 1, 2026.

AI is a Game-Changer, but Compliance Remains Essential

AI is no longer a futuristic tool; it’s a necessity for any business that wants to remain competitive. AI marketing is transforming the way companies engage with customers, optimize campaigns, and drive growth. As this technology reshapes the marketing and business landscape, companies that fail to adapt will get left behind.

In other words, your business has a choice: either keep up with AI innovation or get crushed by those that do. However, as you embrace the new AI revolution, be careful not to overlook the rapidly developing framework of state regulations that govern how you can use it.

The best way to stay ahead? Leverage new compliance-driven AI tools like Plura, the AI agent designed to help businesses be more efficient and save money, all while staying compliant. With Plura, you get cutting-edge AI tools without the legal headaches.