LLM-Generated Ads: From Personalization Parity to Persuasion Superiority

As large language models (LLMs) become increasingly capable of generating persuasive content, understanding their effectiveness across different advertising strategies becomes critical. This paper presents a two-part investigation examining LLM-generated advertising through complementary lenses: (1) personality-based and (2) psychological persuasion principles. In our first study (n=400), we tested whether LLMs could generate personalized advertisements tailored to specific personality traits (openness and neuroticism) and how their performance compared to human experts. Results showed that LLM-generated ads achieved statistical parity with human-written ads (51.1% vs. 48.9%, p>0.05), with no significant performance differences for matched personalities. Building on these insights, our second study (n=800) shifted focus from individual personalization to universal persuasion, testing LLM performance across four foundational psychological principles: authority, consensus, cognition, and scarcity. AI-generated ads significantly outperformed human-created content, achieving a 59.1% preference rate (vs. 40.9%, p<0.001), with the strongest performance in authority (63.0%) and consensus (62.5%) appeals. Qualitative analysis revealed AI's advantage stems from crafting more sophisticated, aspirational messages and achieving superior visual-narrative coherence. Critically, this quality advantage proved robust: even after applying a 21.2 percentage point detection penalty when participants correctly identified AI-origin, AI ads still outperformed human ads, and 29.4% of participants chose AI content despite knowing its origin. These findings demonstrate LLMs'evolution from parity in personalization to superiority in persuasive storytelling, with significant implications for advertising practice given LLMs'near-zero marginal cost and time requirements compared to human experts.