Decoding AI-Generated Advertising: Consumer Responses, Advertising Outcomes, and Strategic Leverage

The emergence of artificial intelligence (AI) is rapidly reshaping the advertising landscape by increasing efficiency, streamlining workflows, and reducing costs, contributing to its growing adoption among practitioners. At the same time, the expanding use of AI-generated content has prompted AI disclosure policies and transparency requirements from governments and digital platforms, making AI involvement in marketing communication increasingly visible to consumers. Although AI offers substantial production advantages, consumers and practitioners often evaluate AI-generated content through fundamentally different priorities and standards. Consequently, understanding how consumers perceive and respond to AI-generated advertising, and how its effectiveness differs from human-created advertising, has become increasingly important for both scholars and practitioners. This chapter synthesizes the emerging body of empirical research on consumer responses to AI-generated advertising, with particular emphasis on experimental and quantitative studies that provide insight into causal relationships and findings with broader generalizability. Specifically, it examines whether AI-generated advertising produces favorable or unfavorable outcomes, the psychological mechanisms underlying these effects, and the contextual conditions under which negative responses may be strengthened, mitigated, or reversed. Organized around findings across commercial and philanthropic contexts, including cause-related marketing and prosocial campaigns, this chapter highlights how consumers interpret AI-related cues and how these interpretations shape persuasion outcomes. By integrating findings across contexts, this review provides theoretical insights into AI-mediated marketing communication, offers practical guidance for practitioners, and identifies key directions for future research.