AI Advertising Causing Consumer Confusion

Evanne Evans, 3 Mar 2025

Artificial Intelligence (AI) is transforming the advertising landscape, offering unprecedented capabilities in content creation. However, this rapid adoption of AI has introduced complexities that are challenging both consumer and marketing capabilities, expectations, and user preferences.

The Rise of Deceptive AI-Generated Ads

According to AI Magazine, significant concerns regarding the lack of transparency in AI-generated advertisements are rising. Research undertaken by the University of Kanvas indicates that only about half of AI ads clearly disclose their origins, leading consumers to mistake them for organic content. This blurring of lines misleads audiences and raises ethical and regulatory issues, as AI-generated content isn't always subject to the same standards as human-created ads.

Last year, the Chair of the Federal Communications Commission (FCC), Jessica Rosenworcel, published a online downloadable factsheet: DISCLOSURE OF AI-GENERATED CONTENT IN POLITICAL ADS ON TV AND RADIO spurring on the possibility that regulations regarding the use of AI in entertainment and social media channels will also be announced in due course. Consumer Discomfort with AI-Created Content

Despite AI's efficiency in ad production, consumer reception has been lukewarm. Recent research conducted by NIQ reveals that AI-generated ads are often perceived as “annoying, boring, and confusing”. Even high-quality AI content fails to resonate as strongly as traditional advertising. Another key highlight of the NIQ research suggests a “misalignment between the content and existing memory structures—a gap that could impede consumers’ motivation to act.”, highlighting a disconnect and lack of perceived authenticity by viewers.

Human-like but not Quite Right

AI-generated visuals sometimes fall into a not quite right category where content appears almost human, leading to a level of eerie discomfort among viewers. This effect can distract potential customers from the original intended message and diminish the overall impact of the advertisement.

What are the Implications for Brand Trust and Authenticity?

The use of AI in advertising poses risks to brand trust. Consumers are increasingly skeptical of AI-generated content, associating it with a lack of authenticity. This skepticism can lead to reduced engagement and even damage brand reputation because choosing to buy or engage in a product or services goes way beyond surface level reactions but rather deep dives into the emotional architecture of consumer decisions (University of New South Wales, Business Think, 12 February 2025).

Navigating the AI Advertising Landscape

To mitigate confusion and maintain consumer trust, advertisers should:

• Ensure Transparency: Clearly label AI-generated content to avoid misleading audiences.


• Prioritize Authenticity: Blend AI capabilities with human creativity to produce content that resonates emotionally.


• Monitor Consumer Feedback: Regularly assess audience reactions to AI-generated ads and adjust strategies accordingly.

As AI continues to evolve, the advertising industry must balance innovation with ethical considerations to foster trust and clarity in consumer communications.