The news: Meta said Tuesday that it will sign onto the EU’s Code of Practice on Transparency of AI-Generated Content as part of an effort to identify and label AI-generated content on its platforms.

The EU Code of Practice is expansive, requiring signatories to:

• Use specific labels for AI-generated content.
• Explicitly inform users when they interact with AI systems.
• Provide text disclosures on content “of public interest” that didn’t have human oversight or moderation, and more.

Why this matters: AI-generated content is flooding social media platforms, coming from both users and advertisers.

“AI slop” posting has become a cottage industry, with users across the world farming engagement and affiliate dollars by posting AI-generated content on Meta platforms—including scams and fake videos about sensitive events like ICE raids or natural disasters, per 404 Media. These videos damage user trust and attention, lowering engagement quality and making the value of impressions more difficult to suss out for advertisers.

Still, advertisers themselves are heavily using Meta’s AI creative features, which the company is releasing and updating at a breakneck pace. While this has opened up spending from and streamlined access for small and medium-sized businesses (SMBs), it’s imperfect: Faulty AI tools have altered product images and created new risks for advertisers.

Consumer sentiment: Consumers overwhelmingly express distrust and dislike of AI-generated ads and content, making it crucial for Meta to rein them in.

• 28% of consumers ranked unlabeled AI-generated content as the top behavior they don’t want to see from brands online, per a Sprout Social survey. “Engagement bait tactics” came in second at 23%.
• That sentiment is particularly strong for video content—but there is a slight divergence between what advertisers and consumers think. Fifty-seven percent of US consumers said they want advertisers to disclose AI-generated video, but 48% of advertisers agree, per a January IAB survey.

Implications for marketers: Meta’s AI labels will force advertisers to disclose the use of AI-generated content in their ads, increasing the risk of negative consumer sentiment but also preserving trust in its platform. AI use for advertising must be carefully handled and include human oversight to avoid misleading consumers and being flagged by Meta’s detection systems.