AI is now a staple in the ad toolkit, but don’t assume younger consumers are thrilled about it. According to new data from IAB and Sonata Insights, 82% of ad execs believe Gen Z and Millennials feel upbeat about AI-generated ads. In reality? Only 45% do—down from 2024—and negative sentiment among Gen Z has nearly doubled. While 83% of advertisers now deploy AI in the creative process (up from 60% in 2024), many may be underestimating the trust gap growing beneath their campaigns.
This disconnect isn’t just about tone; it’s about transparency. Disclosure is emerging as a key lever for changing minds. Among younger consumers, 73% say knowing an ad was made using AI either boosts or has no impact on their purchase intent. Yet only a 44% of brands always disclose when AI is behind the content. And with 86% of buyers using—or planning to use—AI for video, the visuals Gen Z encounters most are also the ones where disclosure matters most.
While advertisers are increasingly drawn to AI for cost savings (now their top-cited benefit), they’re risking long-term credibility by not aligning closer to consumer sentiment. Gen Z, in particular, sees AI-generated ads as more inauthentic and manipulative compared to Millennials, and fewer than one in four now describe AI-using brands as “innovative.” The research suggests a simple reset: focus AI on quality, and disclose as appropriate—especially in regulated sectors like healthcare.
Read more at IAB.