Paid media advertisers in regulated industries face compliance risks from default AI settings inside Google Ads, Microsoft Advertising and Meta, according to paid media strategist Timothy Jensen, writing on Search Engine Journal. The pitfalls span automated creative, audience expansion and even conversion tracking.

Jensen's warning centers on one hard truth: features that platforms switch on by default can run noncompliant copy or creative without the advertiser seeing it first. His prescription is direct — audit now, document everything, and know exactly where the off-switches sit.

Why do AI policies differ between companies?

Any company in a restricted industry tends to be cautious about AI in advertising, but the level of caution varies between organizations, Jensen writes. Marketers must understand their organization's comfort level and its biggest points of concern.

The differences are concrete:

• Some companies reject auto-generated creative that cannot be previewed in advance, yet accept AI involvement in images or videos that pass approval afterward.
• Others avoid AI in creative production entirely.
• Most platforms include a checkbox to disclose AI involvement in ads, in line with regulations in some countries and U.S. states.

Jensen also flags data handling. Uploading customer data to AI tools when analyzing results or generating copy ideas can violate privacy regulations, and internal rules may prohibit feeding proprietary documents into external systems.

What makes Google's AI Max risky for compliance?

Some advertisers have reported success testing AI Max strategically, but two of its features raise red flags for regulated industries, Jensen writes. Text customization can pull in ad copy that does not match approved messaging, and final URL expansion can link to unwanted pages on the advertiser's site.

His recommendation: disable both and test only the keyword expansion capability.

Platforms point to brand guidelines as a way to align text customization with organizational requirements, but Jensen calls this approach risky where compliance approval hinges on precise wording. Even when the feature references the advertiser's website or prior copy, it could pull in a claim like "award-winning products" without the necessary disclaimer, such as the source of the award.

Microsoft Advertising contains similar options.

Which Performance Max and Demand Gen settings matter?

Advertisers should watch for any option that auto-generates creative or modifies approved assets, Jensen writes. "Too many surprises can arise when an approved image is seen in the wild with a different layout than what was approved."

In Google Ads, Performance Max carries campaign-level settings for Asset Optimization covering text, image and video. Leaving these on could allow noncompliant copy or creative to run unexpectedly.

Demand Gen has similar ad-level settings, including the potential to generate a video containing the advertiser's assets. That output may not match the brand approach and may omit necessary disclaimers.

How does Meta change creative without warning?

"In my experience, Meta is notorious for sneaking in a wide range of visual enhancements, which can vary your ad appearance dramatically from your original design," Jensen writes. The placement of these options in the interface changes frequently; advertisers should look for sections such as "Creative setup" and "Advantage+ creative enhancements" and toggle them off.

These enhancements can change colors, fonts and design choices, and can add unwanted text and links. Jensen advises previewing ads across every active Meta placement: an ad may look brand-safe in a feed but have elements covering a required disclaimer in a Reels format.

Where do targeting and bidding create exposure?

Platforms already restrict targeting for many regulated industries, but organizations may impose additional internal limits — for example, avoiding age targeting even where platforms allow it.

Jensen identifies four further pressure points:

• List-based targeting: Sensitive industries are cautious about syncing customer data to ad platforms; U.S. HIPAA regulations impose strict protocols on healthcare data use.
• Retargeting: Multiple platforms ban pixel-based retargeting entirely for healthcare and some other industries, and internal policies may prohibit it even where technically permitted.
• Automated bidding: Underlying models may bias toward individuals in ways that raise flags — financial organizations must comply with fair lending rules on discrimination based on age, gender or location. Platform reps can provide documentation to ease those concerns.
• Audience expansion: Meta's Advantage+ targeting and Google's optimized targeting can push campaigns beyond the intended audience, so advertisers should know where to disable expansion settings.

Why is conversion tracking now non-negotiable?

As platforms shift toward AI-driven bidding with looser targeting, accurate conversion tracking has become crucial, Jensen writes. Optimizing toward individuals likely to complete valuable actions — submitting an application, opening an account — is often the best targeting method when audience controls are limited.

Internal restrictions can make pixel setup and offline data uploads tedious, so Jensen advises budgeting time to work with the proper teams and justifying the value. Where organizations ban tracking pixels outright, advertisers can fall back on UTM parameters attached to form fills and associate leads with the source that drove them.

What should advertisers do first?

Jensen closes with an action plan: audit the current paid media setup, document automated assets and enhancements that could alter compliance-approved creative, and add safeguards around AI Max and campaign types like Performance Max. Organizations should also open internal discussions on where AI belongs in data analytics and creative development.

The end state, he writes, is clarity on three overlapping rulebooks: platform policies for the industry, internal compliance rules and regulatory requirements.