With the 2024 elections well underway, advertisers of all stripes are seeking new and more efficient ways to reach potential voters, donors, and supporters across platforms. The market for political advertising on U.S. elections and advocacy issues has been projected to reach as much as $16 billion in the 2024 cycle, a roughly 30 percent increase over the last presidential election in 2020.1 But before advertisers, ad agencies, adtech, and platforms launch their first campaign, it is important to be aware of regulations unique to political advertising that can dramatically affect legal obligations and inform their relationships with one another.
When traditional forms of advertising dominated political campaigns, the most common form of political ad regulation was a requirement that advertisers include “Paid for by…” disclaimers identifying the group responsible for the content of the ad. With the exception of broadcasters, companies that provide commercial advertising services have largely been excluded from this compliance obligation. But as digital advertising has taken on a broader role in modern campaigns, regulators have sought new ways to provide the public with information about online political activities. While the federal government does impose some regulations on political advertising relating to candidates for federal office (U.S. President, Senate, and House of Representatives), the state governments have taken on a more active role, imposing aggressive new requirements on online advertisers and distribution platforms that create or disseminate ads about state or local candidates or ballot measures.
Two trends in particular have taken hold in the past several years. First, six states require online advertising platforms to affirmatively maintain certain records of the advertisements they distribute, including in some cases by maintaining publicly accessible databases of political ads run. Failure to comply with these regulations has resulted in significant civil penalties to advertising platforms, leading several major platforms to discontinue political ad sales in certain states altogether. Second, the rapidly accelerating capabilities of generative artificial intelligence has prompted a wave of state legislation on deceptive political advertising, and to date, at least 18 laws have been enacted on so-called “deepfakes.” The laws vary in detail, but generally require advertisers to include disclaimers flagging “manipulated” content in political advertising, and about half would extend liability to platforms distributing political ads that do not comply. These laws will be tested for the first time in 2024, leaving many unknowns about how aggressively states will try to hold the advertising industry accountable.
With these trends in mind, advertisers, ad agencies, adtech, and advertising platforms should determine in advance the types of elections for which they will advertise to clarify their legal obligations and inform how they interact with others in supply chain.
[1] See U.S. political ad market projected to reach record $16 billion in 2024, Axios (Dec. 8, 2023), https://www.axios.com/2023/12/08/us-political-ad-market-2024-spending.
