Advertising Law Tool Kit - Fourteenth Edition - 2026

Venable / 11 10 / Venable Businesses often hire advertising agencies to assist with their marketing and promotion efforts. This outsourcing model has gained popularity with the emergence of online, social media, and mobile advertising and the increasing use of AI-driven tools and automated content-generation technologies. While this approach to online advertising has many benefits, businesses must ensure that their contracts with advertising agencies contain key provisions that will mitigate certain legal risks, bearing in mind that the business itself is the party that is likely to be sued if a third party objects to the contents of the advertising. As regulatory scrutiny of digital advertising, privacy practices, and automated decision making increases, these protections have become even more important. The following best practices can help businesses limit risk when outsourcing marketing campaigns. Intellectual property: • Define which party owns the IP rights to the content or data used or developed by the advertising agency to create the advertisement(s) (including AI-generated or machine-assisted materials) and limit the use of any proprietary content or data. • Bind the agency to confidentiality obligations relating to the business’s proprietary business information and related models, strategies, or datasets. • Provide the business with the right to control the use of search engine optimization practices and automated optimization techniques or seek a disclaimer of any responsibility (and a corresponding limit to liability) for the agency’s actions. • Require the agency to obtain consent to use third-party intellectual property in the advertising campaign and document such rights, including training or use within the agency’s technological tools. Advertising Agreements Armand J. (A.J.) Zottola ajzottola@Venable.com Data: • Require the agency to follow applicable laws and industry best practices relating to data collection and use, including those governing cross-context behavioral advertising, audience targeting, analytics tools, and data transfers. Privacy: • Require the agency to conform to all applicable privacy laws (including new U.S. state laws) and best practices relating to online advertising, data processing, and data collection/use, including those associated with intent-based advertising, data sales, and transfers, and laws designed to protect the privacy of children. This should include compliance with emerging rules on automated decision making, profiling, and platform-specific advertising requirements. • Consider compliance with a designated privacy policy statement. • Consider required consumer consents (opt-in or opt-out), notices, or acknowledgments for data collection, sharing, or use across platforms or channels. Advertising: • Require the agency to follow all applicable advertising laws, such as those relating to comparative advertisements and any industry‑specific rules or recommended practices, as well as updated guidance governing endorsements, influencer marketing, substantiation of claims, and the use of AI-generated content. Standard contract provisions: • Make it clear that there is no legal agency relationship between the parties. • Clearly define the scope of work (including the deliverables to be provided and the schedule, approval processes, and permitted revisions), payment obligations, contract duration, and termination rights. • Require the agency to indemnify the business for any third-party claims arising from IP, privacy, data, and advertising-law violations, and require that the agency have the necessary insurance policies to cover potential third-party claims in light of current industry risks. • Require that an agency’s contracts with subcontractors or other media companies contain provisions that incorporate and account for the concepts mentioned above and ensure alignment with the business’s contractual requirements.