Can You Be Fined for Using AI-Generated Ads?

What New York's New AI Advertising Law Means for Marketers

Artificial intelligence has become the marketing industry's favorite new employee.

At Bennett Creative, we've been using AI for years, but probably not in the way most people imagine. We don't ask AI to create fake actors or generate an entire commercial from scratch. Instead, we use it the same way we use every other production tool: to make great work even better.

Sometimes that means cleaning up audio from an on-location interview. Other times it's removing distractions from a shot, generating storyboard concepts during pre-production, translating subtitles, or helping our creative team kick around campaign ideas before a single camera starts rolling.

The storytelling, strategy, directing, cinematography, and performances? Those still come from real people.

That's why New York's new AI advertising law caught our attention. It isn't really about banning artificial intelligence. The law is requiring producers to disclose when a person is AI generated . It's about making sure audiences know when the person they're watching isn't actually a person at all.

And that's a conversation every marketer should be paying attention to.

As AI becomes more capable, lawmakers are starting to ask a different question: Should consumers know when they're looking at someone who doesn't actually exist?

That's exactly what New York's newest advertising law aims to answer.

Beginning in 2026, advertisers who use AI-generated people in certain advertisements without proper disclosure can face fines ranging from $1,000 for a first violation to as much as $5,000 for repeat violations.

If you've only seen the headlines, you might think New York has declared war on artificial intelligence. It hasn't.

The law doesn't prohibit AI-generated ads. It doesn't ban AI-assisted video production. And it certainly doesn't mean your marketing team has to abandon every AI-powered tool overnight.

Instead, it's the first major signal that transparency—not artificial intelligence itself—is becoming the legal expectation.

For brands across the country—including businesses here in Austin and throughout Texas—that makes this law worth paying attention to, even if you never run an ad in New York.

Let's separate the headlines from reality.

Can You Be Fined for Using AI-Generated Ads in New York?

Yes—but probably not for the reasons you've heard.

The viral posts circulating on LinkedIn and social media often make it sound as though any advertisement created with AI is now illegal or automatically subject to a $5,000 fine.

That's not what the law says.

The legislation is focused on synthetic performers—AI-generated people who appear in advertisements. If a business uses an artificial person or digitally generated performer in an advertisement without clearly disclosing that they're AI-generated, penalties may apply.

That's a much narrower scope than many headlines suggest.

If you're using AI to remove power lines from a drone shot, generate storyboards before a shoot, improve dialogue audio, or expand the edges of a frame during post-production, you're talking about an entirely different category of AI use.

Think of it this way: the law isn't asking whether AI touched your commercial. It's asking whether your audience believes they're watching a real person when they're actually looking at an AI-generated performer.

That distinction matters.

For marketers, social media agencies, and production companies, this isn't a warning to stop innovating. It's a reminder that authenticity and transparency are becoming increasingly important as AI technology becomes harder to detect.

Does Every AI-Generated Advertisement Need a Disclaimer?

No. This is probably the biggest misconception surrounding New York's law.

Artificial intelligence now appears in almost every stage of content creation. Even marketers who insist they "don't use AI" often rely on software that quietly incorporates AI features behind the scenes.

Modern production workflows regularly use AI for:

• removing background noise from interviews

• creating automatic captions

• translating videos into multiple languages

• color matching footage

• object removal

• sky replacements

• generating concept art and storyboards

• editing rough cuts

• improving audio quality

None of those examples automatically require disclosure simply because artificial intelligence helped create the final product. This is exactly how we approach AI at Bennett Creative.

If artificial intelligence can eliminate hours of repetitive editing work, we're all for it. That means our editors spend less time rotoscoping an object out of the background and more time perfecting pacing, emotion, and storytelling. Because the most memorable commercials still come from genuine performances, authentic personalities, and stories that actually connect with an audience.

AI can make production faster. It can't manufacture authenticity.

The law is specifically concerned with situations where an AI-generated person could reasonably be mistaken for an actual human appearing in an advertisement.

That's a very different conversation.

For businesses working with experienced video production teams, this should actually feel reassuring. AI can still be an incredibly useful creative assistant without replacing the people who make your brand memorable in the first place.

At Bennett Creative, we see AI much like we see motion graphics, visual effects, or advanced editing software—another production tool. Great marketing has never been about the software. It's about telling a story people remember.

What Counts as an AI-Generated Person?

Here's where things get interesting.

The law uses the term synthetic performer, but that's left many marketers wondering exactly where the line is drawn.

Would these count?

• A completely AI-generated spokesperson

• A virtual influencer promoting a product

• An artificial news anchor

• A photorealistic digital actor

• A computer-generated brand ambassador

• An AI avatar that appears to speak directly to the audience

In many cases, yes. Now consider a different scenario.

Suppose your company films a real employee giving an interview. During editing, AI cleans up the audio, removes distracting background objects, smooths out transitions, and automatically generates captions.

The person on screen is still real. That's fundamentally different from creating an entirely artificial human designed to appear authentic.

As generative AI continues to improve, this distinction will only become more important.

Consumers are becoming increasingly aware that not everything they see online is real. At the same time, they're also becoming better at recognizing brands that prioritize honesty over shortcuts.

That trust is difficult to earn—and surprisingly easy to lose.

Can I Still Use AI to Edit My Commercials?

Absolutely.

This is one of the biggest fears businesses have after reading headlines about AI regulations.

In our own commercial productions, AI has quietly become another tool in the editing suite.

We've used it to remove unwanted objects from a frame, clean up noisy audio recorded outdoors, speed up caption creation, organize footage, generate concept art during creative development, and even help us explore visual directions before production begins.

What AI hasn't done is replace our directors, cinematographers, producers, editors, or clients. The creative decisions still happen around a table, on set, and in the edit bay.

Technology helps us get there faster, but it doesn't replace experience, taste, or the collaborative process that turns a good idea into a memorable campaign.

That's an important distinction—and one New York's law reinforces. The concern isn't about using smarter editing tools. It's about misleading viewers into believing an AI-generated person is real.

For brands investing in commercial video production, that's good news. You can benefit from modern technology without sacrificing authenticity or running afoul of emerging regulations.

Are AI-Generated Backgrounds Allowed?

Generally speaking, yes.

Imagine filming a commercial in downtown Austin.

During post-production, your editor decides to replace an overcast sky with a brighter one, remove a construction crane from the skyline, or extend the background beyond what the camera originally captured.

Those edits might involve artificial intelligence. They don't suddenly transform your commercial into deceptive advertising.

Likewise, AI-generated environments, digitally enhanced scenery, or computer-created visual elements aren't the primary focus of New York's disclosure law. The emphasis remains on whether an AI-generated person is being presented as though they're a real human without appropriate disclosure.

This distinction is important because modern filmmaking has always blended reality with technology:

• Green screens.

• Computer-generated imagery.

• Visual effects.

• Motion tracking.

• Digital compositing.

Artificial intelligence is simply the latest evolution of tools creative teams use to tell better stories.

The audience has never expected every cloud, every explosion, or every background to be completely untouched. What they do expect is honesty when the person speaking to them isn't actually a person at all.

For brands, that's encouraging news because it means AI can continue doing what it does best: helping creative teams work more efficiently behind the scenes.

Think of it like Photoshop twenty years ago. At first, people worried digital editing would change advertising forever. Instead, it simply became another standard tool in the creative process. We're seeing the same evolution with AI. Used responsibly, it can enhance production without replacing the human creativity that's always been at the heart of great advertising.

Why This Matters Beyond New York

It's tempting for Texas businesses to dismiss this as someone else's regulation. After all, if your company operates in Austin, Dallas, Houston, or San Antonio, why worry about a law passed hundreds of miles away?

Because marketing rarely stops at state lines anymore.

A social media campaign launched in Texas can reach viewers in New York within seconds. An online advertisement doesn't know where a state border begins. National brands increasingly create one campaign that appears across every platform—from YouTube and Instagram to connected TV and streaming services.

As more states begin examining AI transparency laws, businesses that build ethical marketing practices now will be much better prepared for whatever regulations come next.

That's especially true for agencies and production companies. Clients aren't just hiring creative partners anymore. They're hiring trusted advisors who understand how technology, storytelling, and compliance intersect.

At Bennett Creative, we're excited about where AI is headed—not because we think it'll replace filmmakers, writers, or creative directors, but because it gives us better tools to serve our clients.

The brands that will thrive over the next decade won't be the ones chasing every new AI trend. They'll be the ones that know when technology adds value and when a real person, a real story, and a real connection matter more.

And as more states begin exploring AI regulations, that balance between innovation and authenticity is only going to become more important.

In Part 2, we'll look at what this means for Texas businesses, whether similar laws could make their way here, how brands can confidently embrace AI without losing the trust of their audience, and why this may be only the beginning of AI advertising regulations in the United States.