Much like audiences accept CGI in movies, consumers are willing to engage with AI-generated content if it's entertaining or useful. The key is transparency (e.g., labeling it "AI generated"). Marketers should focus on the quality of the experience delivered, not on whether the content is "real."

The risk of AI isn't just external misinformation; it can be self-inflicted. McDonald's fully AI-generated Christmas ad was perceived by audiences as "creepy" and "soulless." This demonstrates that poor execution of brand-created AI content can undermine authenticity and damage brand reputation.

Svedka's fully AI-generated ad was widely panned as one of the worst ever, feeling generic and soulless. In contrast, Flexport's AI-generated ad was praised for its clever script and classic Super Bowl feel. This proves that AI is a tool; the success of creative work still hinges on a strong, human-led idea and thoughtful execution, not just the novelty of the technology used.

Higgsfield's CEO notes a key trend: the best-performing AI-generated ads don't try to pass as real. They lean into a distinct AI aesthetic, suggesting that audiences are not only accepting but are also engaged by this new visual style, prioritizing creativity over photorealism.

Studies show people often prefer AI-generated art based on quality alone, but their preference flips to the human-created version once they know the source. This reveals a deep-seated bias for human effort, posing a significant "Catch-22" for marketers who risk losing audience appreciation if their AI usage is discovered.

As AI makes creating complex visuals trivial, audiences will become skeptical of content like surrealist photos or polished B-roll. They will increasingly assume it is AI-generated rather than the result of human skill, leading to lower trust and engagement.

Because AI can generate content in seconds, it is perceived as low-effort. This violates the "labor illusion," where effort signals quality. A study showed that when a poster was labeled "AI-powered" instead of "hand-drawn," purchase intent dropped by 61%. Brands using AI must reframe the narrative around the effort of building the system.

While AI video tools can generate visually interesting ads cheaply and capture views, they currently lack the authentic creative spark needed for true brand building. Their value lies in quick, low-cost content, making them a performance marketing tool rather than an asset for creating a lasting, memorable brand identity.

AI tools are best used as collaborators for brainstorming or refining ideas. Relying on AI for final output without a "human in the loop" results in obviously robotic content that hurts the brand. A marketer's taste and judgment remain the most critical components.