• by Laurie Sullivan , Staff Writer @lauriesullivan, December 12, 2024

How the brain accepts and processes GAI in creative and advertisements has become a focus of several studies as more companies start using the technology to build ads. It will affect ad performance if certain factors are not taken into consideration. 

Research from consumer intelligence company NielsenIQ (NIQ), released today looked at how the brain accepts GAI ads and the “critical implications” that using the technology has on the brand.

NielsenIQ plans to discuss the full survey results at CES 2025 in January, but the implications show it could cause consumers to have less trust in the brand and diminished recall of an ad.

More than 2,000 participants who watched a series of low- to high-quality AI-generated ads responded to the survey. The test measured brain activity using electroencephalogram (EEG) for approximately 150 of those participants. After viewing the ads, all participants were asked to share feedback via a survey.

The good news is that consumers intuitively identified most of the AI-generated ads. The bad news is that they perceived them as less engaging and more “annoying,” “boring,” and “confusing” than traditional ads.

The feedback suggests that AI-generated ads may “create a negative halo effect that could dampen consumer perceptions of both the ad and the brand.”

This also has an impact on ad recall. Memory helps people understand what is seen and how it fits with something we already knew or experienced. And is there an existing template within the brain to match what is seen.

GAI decreases memory engagement, even for the most edited and polished ad. The study found consumers’ brains registered that something wasn’t quite right, even if they weren’t explicitly aware of it. The research suggests “a misalignment between the content and existing memory structures — a gap that could impede consumers’ motivation to act.”

Despite what may be perceived as setbacks, even the lowest-quality AI-generated ads were able to successfully convey the intended brand identity. Each of these ads strengthened the mental network of associations for their respective brands at a strong level.

Coca-Cola, Suzuki, Toys'R'Us, Mars’s Starburst, Heinz, and Bodyarmor have all deployed generative AI (GAI) as part of their advertising, but are consumers ready for the change?

The second study -- released earlier this week released by IAB in partnership with Sonata Insights -- surveyed 300 Gen Z and Millennial consumers and 75 advertising industry executives using the IAB Insights Engine platform supported by Attest. 

The results show that Gen Z and Millennials are less likely than advertisers to have positive sentiments toward businesses that create ads using GAI.

The IAB study found more than 60% of ad-industry executives said their company has already used AI to create advertisements.  

Some 64% of advertisers believe GAI will help with creative innovation, and 60% said it will save time. Nearly half believe that AI will help with data-driven insights or personalization. 

This shiny new object — GAI — has become attractive to advertisers, despite pushback from consumers. Eighty percent of ad-industry execs participating in the study believe consumers feel very or somewhat positive about AI-generated ads but only 48% of Gen Z and Millennial consumers feel that way. 

Some 52% of industry executives said brands that use AI-generated ads are “creative,” while only 38% of Gen Z and Millennial respondents shared that view.

Industry executives were also considerably more likely to say that brands that use GAI ads are "innovative," “forward-thinking,” or “fun.” Consumers called these brands “inauthentic” or “unethical.”

It may be time-consuming, but consumers want advertisers to disclose when GAI is used in ads. About 75% of industry executives say they at least sometimes disclose when an ad is generated by AI.

Disclosure is important because the impact on consumer attention and trust was mixed in the study when it came to transparency. Some 31% of Gen Z and Millennial consumers said clear disclosure that AI was used to create an ad would give them a reason to pay more attention to it. 

Some 31% said their trust in a company would increase if they knew an ad was created with AI, and 27% would trust a company less if they knew an ad was created with AI. Gen Z respondents were even more likely to have less trust if they were aware an ad was created with AI.