Can Your AI-Generated Ad Run Without a Label? What ASCI’s New Guidelines Mean for Advertisers

Not every advertisement created using artificial intelligence (“AI”) needs an AI disclosure. Businesses use AI to create product demonstrations, virtual influencers, promotional videos and other advertising content. While AI offers advertisers more flexibility and creative possibilities, it also raises concerns about whether consumers can tell the difference between real and AI-generated content. To address these concerns, the Advertising Standards Council of India (“ASCI”) issued the Guidelines for Responsible Labelling of Synthetically Generated Content in Advertising in September 2026. As part of ASCI’s self-regulatory advertising framework, the Guidelines clarify when synthetically generated content (“SGC”) must be disclosed; while other advertising standards continue to apply.

The Guidelines are dated September 17^th and will come into effect three months from publication. Businesses will have time to review their advertising practices and make any necessary changes. The Guidelines take a risk-based approach, requiring advertisers to assess whether the use of SGC could influence a consumer’s ability to make an informed choice. The need for disclosure depends on the nature of the content and its potential impact on consumers.

The significance of the framework therefore goes beyond deciding whether an advertisement should carry an “AI-generated” label. It introduces a more fundamental compliance question for advertisers: can the use of AI change how a consumer understands, evaluates or responds to the advertisement? This makes AI-generated advertising less of a technology question and more of a question of consumer protection, advertising governance and accountability.

Scope of Synthetically Generated Content

The Guidelines cover audio, visual and audiovisual content artificially or algorithmically generated, modified or materially altered through a computer resource to appear real or authentic, including portrayals of people or events that could be mistaken for reality. AI-generated visuals showing product performance or scenes that may influence a consumer’s perception of a product can therefore fall within the Guidelines. The focus of the guidelines is not simply whether AI has been used, but whether the resulting content could mislead consumers and influence their purchasing decisions.

Risk Assessment and Mandatory Labelling

Under the Guidelines, advertisers should assess whether SGC is central to an advertisement’s persuasive message or materially influences purchase decisions; whether its unlabelled use could mislead consumers about product claims, performance or benefits; and whether the absence of disclosure would create a false or misleading impression. Where SGC materially influences consumer decisions and the lack of a label would mislead consumers, labelling is mandatory.

For example, where an AI-generated personality appears to endorse a product in a realistic manner, consumers may believe that the personality is a real individual who has independently used or evaluated the product. Similarly, where an advertisement uses a digitally recreated person’s voice or likeness for personalised messaging (even with that person’s consent), or depicts a product demonstration that could be mistaken for an actual demonstration, the absence of disclosure may affect the consumer’s ability to make an informed choice.

The Guidelines also identify other situations where labelling is mandatory: fabricated events or settings that may affect consumers’ understanding of a product or service; demonstrations of products that do not yet exist (such as a model of an unbuilt housing complex); and synthetic sound effects central to a product’s core features (such as audio quality in a headset advertisement). Paid or sponsored AI-generated recommendations are subject to a specific disclosure, discussed below.

This risk-based approach is significant for businesses because the same AI technology may require different treatment depending on how it is used. An AI tool used for a minor visual enhancement may have little bearing on a consumer’s understanding, while the same technology used to recreate a person, demonstrate product performance or present a synthetic endorsement may directly influence a purchasing decision. The compliance assessment therefore needs to focus not merely on the presence of AI, but on the role AI plays in the advertising message.

Uses That May Not Require Labelling

The Guidelines recognise that not every use of AI creates the same risk. Minor enhancements like routine editing, colour correction, light adjustment, noise reduction, standard blemish removal, minor lighting tweaks, formatting and copy refinement do not require labelling where they do not alter the substance or core claims of the advertisement. The same applies to purely decorative SGC in the nature of backgrounds, abstract skylines, ambient music, jingles or background sound effects (like crowd cheers) unrelated to the product’s actual capabilities or promise; obvious, unrealistic effects that audiences recognise as not depicting reality; and administrative or text-based uses of AI, such as assistance with advertising copy, where they do not affect consumer understanding.

Similarly, accessibility related applications, like subtitles, translations and accurate audio descriptions, also do not require labelling and should be distinguished from uses that create a misleading impression about a person, product or event. Advertisers should assess the specific use and effect of AI when determining whether labelling is required.

Prohibited Uses and the Limits of Disclosure

Disclosure is not a substitute for compliance with advertising standards. Certain misleading or otherwise impermissible uses of synthetic content cannot be made acceptable merely by adding an AI-generated label. For instance, fabricating endorsements or testimonials i.e. using AI to create, alter or attribute an endorsement or testimonial in a manner that falsely represents that a real person has used, experienced, approved, recommended or endorsed a product or service when they have not, exaggerating product results or features through claims or visual representations to create a misleading impression (e.g., a weight loss product showing a before-after image of weight reduction from 100 kgs to 70 kgs through an AI-generated image of a lean, toned body, when the visual does not represent actual or substantiated product results, thereby creating a misleading impression that such results are achievable through use of the product), depicting non-existent locations in a manner that implies that they are real and they exist (e.g., a travel agency depicting a hotel in a non-existent location or having non-existent facilities), and using unauthorised copyrighted work, deepfakes or a person’s likeness without consent.

Form and Placement of Disclosures

Advertisers should use clear and appropriate labelling that enables consumers to understand the role of AI-generated content in the advertisement. The Guidelines give examples of labels such as “Audio/Video created using AI” and “Audio/Video enhanced using AI”, depending on the nature of the content. Advertisers may also use platform-provided labels or alternative wording that accurately informs consumers. Disclosures should be clear and visible or audible in the context of the advertisement, having regard to the applicable ASCI disclaimer guidance. A disclosure that is difficult to notice, unclear or inconsistent with the content may not address the risk of misleading consumers.

The Guidelines also identify situations in which specific disclosure is required. For example, where paid or sponsored product suggestions are generated through AI, the disclosure “Sponsored by [Brand]” is required.

International Regulatory Developments

The introduction of this framework reflects a broader international focus on transparency in AI assisted advertising. In the United States, New York introduced a law requiring certain advertisements using AI-generated performers to disclose this use. The law came into effect in June 2026. While New York’s law and ASCI’s guidelines have different requirements, both show that regulators are paying closer attention to how AI-generated content may mislead consumers about the people shown in advertisements.

Businesses operating in different countries must ensure the disclosure requirements that apply in each market and ensure their advertisements comply with the relevant laws and advertising standards.

From AI Labelling to AI Advertising Governance

The practical challenge for businesses may therefore extend beyond deciding whether an individual advertisement requires an AI disclosure. As AI becomes part of the advertising workflow, businesses may need to consider how AI-generated content is identified, assessed and approved before it reaches consumers.

This is particularly relevant where content is created through a combination of internal marketing teams, advertising agencies, creative agencies and third-party content creators. A business may need to know not only whether AI was used, but also what the AI was used to create, whether the content materially influences the advertising message, whether the resulting claim or representation is substantiated, and who approved its publication.

In this sense, the ASCI Guidelines can be viewed as part of a broader shift towards AI governance in advertising. The immediate compliance question may be whether a label is required; the larger organisational question is whether the business has a consistent process for identifying, assessing, approving and documenting the use of AI in consumer-facing content.

Steps for Businesses

To stay compliant with the new ASCI guidelines, businesses may start monitoring how their internal teams, agencies and third-party creators are using AI for creating advertisements. It helps to map out the potential risks for each case and decide whether the content requires a label or is misleading even with one. For this purpose, businesses may set up an internal review process, draft policies regarding the use of AI for their advertisements and retain a record of material decisions where appropriate.

For businesses, preparing for the framework can therefore begin with a simple AI advertising governance process:

• Identify where internal teams, agencies and third-party creators are using AI to create or modify advertising content.
• Assess whether the use of AI could influence consumer understanding or purchasing decisions.
• Determine whether disclosure is required and whether the advertisement complies with other applicable ASCI standards.
• Establish an appropriate internal review and approval process before the advertisement is published.
• Retain records of material decisions, particularly where the business determines that disclosure is not required.

The more significant compliance challenge may therefore be determining how an organisation consistently makes that distinction across hundreds of advertisements, campaigns and content creators. As AI becomes embedded in advertising workflows, businesses may need to treat AI use as part of their broader advertising review and governance processes rather than as a standalone disclosure issue.

The question for advertisers is no longer simply “Did we use AI?” It is “What role did AI play, could it affect the consumer’s understanding, and can we demonstrate how that assessment was made?”.

Sources

1. ASCI, Guidelines for Responsible Labelling of Synthetically Generated Content in Advertising (September 2026): https://www.ascionline.in/wp-content/uploads/2026/09/Guidelines-for-Responsible-Labelling-of-Synthetically-Generated-Content-in-Advertising.pdf
2. ASCI, Press Announcements: https://www.ascionline.in/press-announcements/
3. Office of the Governor of New York, announcement on disclosure requirements for advertisements using AI-generated synthetic performers: https://www.governor.ny.gov/news/governor-hochul-announces-first-nation-law-requiring-disclosure-when-advertisements-include-ai

Author: Ankit Chakraborty

Co-Author: Amiya Mukherjee

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