But people and advertisers are divided over the use of AI in advertising, per a Publicis Media and Yahoo survey

People generally prefer to know when they are being shown content generated by artificial intelligence, according to one study.

To better understand people’s attitudes toward AI-generated imagery in ads—including AI models, background and images—Publicis Media and Yahoo polled 1,200 U.S. consumers, showing them ads that included disclosures stating that AI was used.

It found that one in four consumers noticed the AI disclosures, resulting in a 47% increase in ad appeal, a 73% rise in ad trustworthiness and a 96% jump in overall brand trust.

The survey was conducted in collaboration with Yahoo, which created ads featuring fictitious brands spanning the healthcare, retail, finance, technology, food, and travel verticals. The research was motivated by Publicis Media’s client interest to understand consumer perception around the use of Al in advertising.

According to the study, 72% of consumers believe that AI makes it challenging to discern which content is genuinely authentic. And 61% of consumers already assume that AI is used in ads, although they are uncertain about how to identify it. 

The study also polled 350 U.S. advertisers and found a discrepancy in sentiments between advertisers and consumers. While nearly 77% of advertisers view AI positively, only 38% of consumers share this sentiment. Additionally, 53% of the surveyed individuals were not familiar with companies’ use of AI in ads.

“There’s an opportunity for advertisers to help consumers understand the benefits of [AI], such as disclosures, and be transparent about AI usage,” said Megan Halscheid, vice president, PMX marketplace intelligence at Publicis Media.

AI will further integrate across various agency operations this year, per Forrester, from bespoke AI products trained on brand data to producing highly relevant ads. Publicis Groupe is ramping up AI efforts by investing $326 million over the next three years.

“There are still conversations that we have to have in the industry to standardize and think about [AI transparency],” said Tony Gemma, head of global ad creative at Yahoo.

Meanwhile, there are no laws in the U.S. requiring disclosure when AI is used in the production of ads.

“The development of generative AI has happened much faster than the law or regulations can keep up,” said Edward Klaris, managing partner at Klaris Law. “I am unaware of any such laws being considered by state or federal lawmakers.”

Open to data exchange for relevant AI ads
The study found that 82% of advertisers agree that AI will reshape how brands and consumers interreact. People surveyed also prefer AI in advertising when it delivers tangible benefits, such as lower product prices, increased job efficiency and reduced carbon footprint.

As a result, people are open to the continued exchange of personal data for relevant ads.

Nearly one-half of respondents (46%) are open to sharing data on media preferences in exchange for tailored ads, while 39% are willing to share past purchase history and places visited. Additionally, 36% are open to sharing social media habits, 35% are willing to share location details and 34% are open to sharing previous search history.

“Consumers like the ability to have personalization of ads and recommendations and are open to sharing information [in exchange],” said Halscheid.

Most consumers are unwilling to share data such as moods, conversation on smart devices such as phones and medical records.

Regulation vs. progress
While most (75%) believe AI should be regulated while citing difficulties in discerning authenticity, many also recognize AI’s potential for scientific advancement, simplifying daily life and experiencing more relevant ads.

However, only a small percentage of consumers (27%) are acquainted with AI, with Generation Z (48%) showing a notably higher familiarity with the technology, compared with millennials at 36%, Gen X at 16% and boomers at just 9%.

Of those familiar with AI tools, 40% use ChatGPT, while 22% use Microsoft’s Bing Chat. Only 13% use Google’s Gemini (formerly Bard), mostly to ask questions akin to a search engine, write emails or generate ideas.

Advertiser confidence
Advertisers are optimistic about AI, with 86% already using the technology.

To that, 87% note that AI cuts manual task time, 83% said it frees up time for more creative and strategic work, and 81% observe AI’s ability to boost sales. Publicis Media did not share financial specifics.

When asked about AI’s real-time capabilities for advertising, 81% believe AI will enhance ad experiences through optimal timing and placement, while 80% foresee an increase in return on investment via real-time campaign optimization and insights.

Additionally, 79% expect AI to facilitate strategic pivots in response to market shifts, and 78% believe tailoring creative will bolster emotional connections with audiences. Moreover, 77% anticipate that AI will reduce the time between ad exposure and a purchase.