Regulating AI Video in the Advertising Ecosystem

Team Clairva
Dec 30, 2025
3 min read

(Clairva organised a webinar covering “Regulating AI Video in the Advertising Ecosystem” - The participants are Martin Bertilsson and Ashish Chandra and anchored by Sunil Nair of Clairva. The following is a summary of the complete video)

For Chief Marketing Officers (CMOs), the rapid evolution of AI-generated video represents a shift from a creative novelty to a strategic necessity, bringing both immense competitive opportunities and significant regulatory risks.

Here are the key highlights and insights relevant to CMOs based on the sources:

1. The Erosion of the Creative "Moat"

Historically, large brands maintained a competitive advantage because high-end video production was expensive and required massive resources. AI has effectively destroyed this "moat" by making high-end production affordable for any challenger brand. Consequently, legacy brands must significantly increase their pace to stay ahead of agile competitors who do not have the same burden of global governance.

2. Reputational vs. Legal Risk Management

CMOs must distinguish between immediate and delayed consequences when using AI in campaigns:

Immediate Reputational Harm: If an AI-generated ad feels "fake" or makes incorrect claims about a product, the reputational hit is instant, often fueled by competitors or disgruntled users on social media.
Delayed Legal Consequences: Legal repercussions for misrepresentation or consumer claims typically follow after the reputational damage is done.
The "Human in the Loop": It is critical to have human oversight to verify AI output. Without it, AI may misjudge product specifications or fail to recognize cultural nuances, such as the difference between a North Indian wedding and a Diwali celebration, leading to potential disaster.

3. Operational Efficiency and Compliance

While AI poses risks, it also offers massive gains in marketing operations:

Efficiency Gains: Implementing AI compliance tools can reduce the time spent by marketing and legal teams by over 80%.
Ad Rejection Rates: AI can help create "compliant" ads, which is vital given that current ad rejection rates on platforms like Meta or TikTok can be as high as 30%.
Rapid Prototyping: AI is transforming production by allowing agencies to put concepts in front of clients instantly, replacing traditional storyboards and enabling easier AB testing.

4. Navigating the "Confines of Creepiness"

As brands move toward hyper-personalized AI video, they risk crossing into "behavioral manipulation". While the "confines of creepiness" (what consumers find acceptable) have moved over the last 20 years, CMOs must still be wary of brand safety. For example, a video that uses personal data to target an individual’s specific family situation might be technically possible but is often viewed as too invasive for a brand to remain safe.

5. Accountability and Vendor Selection

A major concern for CMOs is liability for copyright infringement or bias. The sources suggest:

Vertical vs. Horizontal Models: Large "horizontal" models (like Gemini or OpenAI) may not stand behind a brand if a third-party claim arises.
Warranties of Title: Brands should look for platforms that guarantee the training data is copyright-safe and are willing to own the liability for the output.
Global Data Gaps: Many AI models are trained on limited data from the "global south" (e.g., Hindi content may represent only 0.8% of training data), increasing the risk of unintentional cultural offense.

6. The Future of Regulation

Regulation is expected to follow a specific hierarchy: platform policies will lead first, followed by industry self-regulation, and finally broad government frameworks. CMOs should prepare for a world where platforms care more about user goodwill and will likely impose their own safety standards before formal laws are enacted.

Analogy for Understanding: Using AI in your marketing strategy today is like driving a high-performance race car on a road where the traffic laws haven't been written yet. While the car allows you to outpace the competition with incredible speed, the lack of clear lane markings (regulations) means you must rely heavily on a highly skilled driver (the human in the loop) to avoid a high-speed crash that could destroy your brand's reputation before the police (regulators) even arrive at the scene.