Google will now label AI-made ads — what Malaysian SMEs need to know

Your potential customer is browsing Google. They see your ad — the one with that perfect product shot you generated using AI. They click the three dots, and a new option appears: “How this ad was made.” Inside, it says “Made with AI.” Does that change how they feel about your business?

TL;DR: Google is introducing a new label in its “My Ad Center” panel that tells users when an ad has been created or edited using AI. The label shows up on Google Search, YouTube, and Google Discover. If you use Google’s own generative AI tools, the disclosure is applied automatically. If you create your ads elsewhere, you’ll need to self-report whether AI was involved. Google will not verify your claim. This shift could affect how customers perceive ads marked as AI-generated, especially for small businesses trying to build trust. Google announced the change in July 2026, adding that the feature builds on existing controls that let users block, report, or learn more about advertisers (source).

What Google’s new AI label looks like

When a user clicks the three-dot menu or info icon on an ad they see via Google Search, YouTube, or Google Discover, the “My Ad Center” panel opens. This panel already allows users to block or report ads and see why a particular ad was shown to them. Now, a new option called “How this ad was made” will appear — and if AI was used in the ad’s creation or editing, it will state that clearly.

“AI makes it easier for businesses to create ads, place their brand’s products in various settings, and save money on real-world e-commerce photography. But it can also be misleading if consumers don’t know that what they’re looking at isn’t a real product photo.” — Google, via TechCrunch

This label applies to both fully AI-generated ads and ads that contain “synthetic or digitally altered content,” as Google describes it. Previously, only election ads were required to carry such disclosures.

When your ad gets labeled: automatic vs. self-reported

Scenario	How the label is applied	Who is responsible
You create the ad using Google’s generative AI tools	Disclosure is automatically enabled	Google
You create the ad using third-party AI tools	You must use a new control to indicate AI was involved	You (the advertiser)
Local law requires AI disclosure	Label may be applied regardless	Varies by market

Google has stated it will not perform its own checks to verify whether an ad created outside its tools actually used AI (source). This means the system relies on advertiser honesty — at least for now.

Why this matters for Malaysian SME owners

If you’re running Google ads for your business, you likely fall into one of two groups: either you use Google’s AI ad creation tools (like Product Studio or conversational ad creation), or you bring your own creatives made with tools like Canva, Adobe Firefly, or Midjourney.

Either way, the label will eventually apply to you. And the question is: will your customers care?

It feels like trust is becoming a bigger concern in advertising. When a potential customer sees “Made with AI,” they might wonder if the product in the image is real. They might question whether your business is cutting corners. On the other hand, some audiences appreciate transparency and may reward it.

For now, the key is to be aware that this label exists and to plan your ad creative strategy accordingly. If your ads rely heavily on AI-generated imagery, you might want to consider adding real photos or client testimonials alongside them to maintain authenticity.

The bigger picture: transparency is becoming the norm

Google’s move is part of a broader trend. Platforms are being pushed — by regulators and consumers alike — to disclose when AI has been used in content creation. This isn’t just about ads. It’s about product images, descriptions, reviews, and even customer service interactions.

For a Malaysian SME, the long-term implication is clear: if you use AI in your marketing, you should assume that transparency will eventually be expected, not optional. Building a brand that is honest about how it creates content might become a competitive advantage rather than a burden.

This doesn’t mean you should stop using AI tools. Far from it. It means you should use them thoughtfully, and be ready to answer the question: “How was this made?”

How to adapt your AI ad strategy

Here are three practical steps you can take today:

• Audit your ads: Check which of your current Google ads use AI-generated or AI-edited creatives. Know which ones will likely carry the label.
• Review your creative mix: Balance AI-generated images with real photos or videos. This helps maintain trust if the label appears.
• Monitor the impact: Keep an eye on click-through rates and conversion data after the label rolls out. If you see a drop, adjust your approach.

Google’s disclosure requirement is likely just the beginning. As AI tools become more common in advertising, similar rules will probably appear on other platforms like Facebook, Instagram, and TikTok.

Want to future-proof your ad strategy? Book a free 15-min call to see how AI transparency affects your business →