AI Disclosure Is Coming. The Real Question Is How Brands Use AI

This is already happening

Most conversations about AI regulation in marketing have treated it as something coming down the road, but recently regulations have been introduced which will pave the way for greater transparency in relation to the use of AI in marketing.

On 9 June 2026, New York’s AI advertising law came into force, making it the first US state to legally require disclosure when AI-generated humans appear in paid advertising. The EU AI Act’s transparency provisions follow on 2 August 2026. Two major markets, two sets of rules, both active within weeks of each other.

What New York’s law actually requires

New York’s law is specific and practical, which makes it easier to act on than most regulation.

In scope: any ad featuring an AI-generated person. That means a synthetic model holding your product, a generated spokesperson, or any lifestyle visual where the human in the frame was created by AI rather than photographed. If it appears in a paid placement in New York, on any channel including Meta, Google, YouTube, TikTok, programmatic display, or connected TV, it needs a clear, conspicuous AI disclosure label.

Out of scope: product-only shots, AI-generated backgrounds, and scenes with no AI-generated human in view. The law is about synthetic people, not AI-assisted production generally. AI backgrounds and AI-enhanced product visuals do not trigger the requirement.

The penalty structure is $1,000 for a first violation and $5,000 for each one after. Crucially, the law applies based on where the ad is seen, not where your business is based. Broad US targeting means New York audiences are in the mix, which means you are already in scope.

The practical fix is simple: a clear, consistent ‘AI-generated’ label applied to affected assets across every placement and aspect ratio. Getting there requires an honest audit of what is currently live and a production process that catches this before anything ships.

What the EU AI Act adds

The EU’s approach is broader in ambition. The AI Act is the world’s first comprehensive AI regulation, with obligations scaled to the risk level of the AI application.

For advertisers, the relevant provision coming into force on 2 August 2026 requires disclosure when people interact with AI in certain contexts, including chatbots, deepfakes, and AI-generated content on topics of public interest. Right now, that second category is focused on political content and public health information rather than commercial advertising.

The regulatory direction is consistent, though, and it is moving towards broader disclosure expectations over time. The EU started GDPR, and it became a global standard. New York is positioning its AI advertising law as a template for other US states, and California is widely expected to follow. Brands that treat August as the finish line rather than a milestone will keep finding themselves behind.

What this means for you

The important question is what these regulations signal about where audience expectations are heading, and whether your current use of AI in creative is going to be possible in a world where all use of AI in creative is automatically flagged to the user.

Will users still trust a brand that creates most of it’s marketing assets using AI? Current sentiment towards AI from the general population suggests not, but time will tell if as the use of AI becomes more normalised and the fear and anxiety that the majority of people feel starts to settle.

The other question is whether, as an advertiser, this loss of trust outweighs the benefits of being able to produce huge amounts of content for marketing at very low cost. Will brands that commit to being human first succeed in the long run or will they be overtaken by businesses that are willing to be fully AI-first with their creative?

I think the reality is somewhere in the middle. The brands that will succeed are going to need to integrate AI to extend and accelerate what your team can do, not replace it.

If you don’t integrate AI into your workflows, your costs as a business will be far higher than those that do, resulting in you being outbid in the auctions on paid channels as your acquisition targets will be restricted by your operational costs. This will result in slower growth and a less profitable business vs your competitors.

However, if you use AI to speed up your business processes, remove mundane tasks from your team’s to do lists and free them up to be creative and come up with the big ideas that will really move the needle and execute them, that’s the best of both worlds.

At their best, AI tools increase creative output, reduce design time and unlock ideas that would otherwise be ruled out by budget or timeline. We recently used AI to generate dozens of individual creative assets for an animation sequence that would have taken weeks to produce manually. The brand moved faster and executed an idea that would otherwise have been ruled out by time and resource.

That is the kind of AI use that holds up under scrutiny, today and as the rules evolve.

Three things to act on now

1. Audit your live creative library across every channel. Identify every ad that features an AI-generated person. Pause anything running without a disclosure label while you decide whether to relabel or replace it.

2. Set one consistent disclosure standard. Agree a single treatment: a legible label, a fixed position in the frame, readable across every aspect ratio and placement. Make it part of the asset specification, not an afterthought in QA.

3. Reassess where AI sits in your creative process. If your current approach relies on synthetic people or generated testimonials, now is the right time to rethink it. Not just because of compliance, but because the performance case for authentic, human-led creative is strong and the pressures on the alternative are only going to increase.

For ecommerce brands, this is ultimately a governance question. The businesses that establish clear standards for AI-generated creative now will move faster and carry less risk. And as regulation continues to tighten, they will adapt with far less friction. Those that treat it as a compliance checkbox will keep finding themselves behind the curve.

AI regulation in advertising is moving in one direction. The brands that build it into their growth strategy today will have a structural advantage over those that wait.

Want to sense-check how your current creative approach holds up? Get in touch.