The Impact of Generative AI on Advertising Effectiveness

The advent of generative artificial intelligence (genAI) is reshaping industries, including advertising, where its ability to generate ads is gaining traction. However, debates persist regarding whether GenAI can outperform human experts, and if so, to what extent and in which tasks it excels. Through secondary data analysis and lab experiments, this study investigates the effectiveness of genAI in ad creation and modification compared to human experts. Our findings suggest that while generative AI-“modified” ads do not outperform human experts ads, generative AI-“created” ads do. We argue that this indicates the proficiency of visual generative AI in creation tasks but its limitations in modification tasks. Additionally, AI can enhance product package design, demonstrating its effectiveness in creation and ideation tasks. The study contributes empirical evidence on AI’s impact on advertising and sheds light on its role across different task levels.