Understanding Consumer Perception of AI in Advertising

Your feed is filled with companies that claim to know you…    So why is it that only 45% of consumers feel understood by the brands they interact with? Better yet – why does our data show that number is down YOY? Consumers are tired. Tired of hearing about how AI is “reimagining” every product or service they use. They don’t care how sophisticated a tech stack is if the interaction still feels generic. Business leaders riding the AI wave need to keep the consumer experience top of mind. While an AI rollout might look impressive on paper, what does it actually feel like for your customers? Some things can’t be automated: empathy, trust, connection. Or can they? AI can absolutely help scale those human experiences. But only when it starts with a deep, genuine understanding of your customer. That foundation has to come first. Otherwise, you’re just automating noise. AI isn’t magic. It’s a tool. And like any tool, its success depends on how – & more importantly, why – you use it. Get that right, & you don’t just win attention. You win loyalty.

Oh. This is gooooood. Turns out slapping “AI-powered” on your product doesn’t make people buy... it makes them back away. We’ve been force-fed AI hype for over a year—especially in our software. Prices went up across the board because of “AI features” that were, in reality, just glorified ChatGPT wrappers. No opt-out. No choice. Just marginally useful add-ons we didn’t ask for. Now, a new study confirms what many of us already knew: consumers don’t trust AI marketing. From the Journal of Hospitality Marketing & Management: “Participants who saw ads with AI-related marketing were less likely to try or buy the products.” Even the researchers were surprised: “We thought AI would improve consumers' willingness to buy... but apparently it has a negative effect.” Well yeah—because consumers aren’t confused. They’re cautious. They’re tired of being guinea pigs for Silicon Valley’s next rollout. This is where trust beats tech every time. Because what we’re seeing isn’t innovation—it’s marketing without substance. So what happens next? AI startups will do what hype-driven startups always do: rename, reframe, and hide the AI under vague “cutting-edge tech” labels. But the damage is done. People are paying attention now. Consumers want value. Not vague promises. Not buzzwords. Not price hikes disguised as innovation. And if your product can’t stand on its own without the “AI” sticker slapped on top? It probably shouldn’t be out there yet. - Consumers don’t fear tech. They fear being lied to. - They don’t avoid innovation. They avoid unreliability. - GenAI doesn’t draw money from consumers... trust does. Sources: WSJ: https://lnkd.in/gW5pr2jR Study: https://lnkd.in/gfdjy8df Futurism: https://lnkd.in/gYyRtusr Read the original post: https://lnkd.in/gwN9r8y7 #ai #fakeai #aihype #aibubble

“The more knowledge people have about AI and how it works, the less likely they are to embrace it… These findings challenge a core assumption in tech adoption: that more education will naturally lead to greater adoption. In reality, as knowledge about AI grows, interest in AI-powered products and services may diminish.” This insight is based on a study published in the Journal of Marketing. #AI isn't merely a tech challenge but a people challenge as well. That should come as no surprise, since that's the case with all new tech. But for some reason, people continue to act as if the biggest question hanging over AI is not whether employees and customers want it but how to cram AI into every corner of our tech stack. For the most part, when people have used innovative tech (home PCs, smartphones, etc.), their acceptance and adoption increased. But the opposite seems to be the case for AI. Why? This HBR article notes, “Those with higher AI literacy, who understand the mechanics—algorithms, data training, computational models—AI loses its mystique. Much like learning how a magic trick works, this knowledge strips away the wonder... those with higher AI literacy may have a more informed, less-emotionally-driven view of AI, which can lead to greater caution or even disinterest—not because they think AI is worse but because it feels less novel or transformative.” Furthermore, “The gap in interest in AI usage is more pronounced when AI tackles tasks we typically see as uniquely human such as writing a poem, composing a song, cracking a joke, or giving advice.” This means we must tailor our use of AI within organizations or in marketing to the AI literacy of our audience, and we cannot pretend that a more AI-literate audience means a more AI-accepting one. “If your target customers are AI-savvy, don’t rely on the 'wow' factor to increase adoption. Instead, highlight its capability, performance, or ethicality.” That means the only people likely to be impressed with an AI-created ad will be the less literate AI audience, and that audience will shrink rapidly over time. The age of “people will think we're cool because we've used AI” is coming to an end. Long live the age of “our brand will succeed if we take the time and effort to tell people why using AI is the right, logical, and helpful thing to do--not for our organization but for them.” https://lnkd.in/gS6x9qNc

New data: Customers don't care about your "AI-powered" feature. This comes from a survey of 767 software users by Kristen Berman and the team at Irrational Labs. You'll want to dive into the full results in today's Growth Unhinged: https://lnkd.in/e7eCUv5b What the study found: 1. Rather than enhancing perceptions, the term “generative AI” significantly lowered expectations of a product’s potential impact. This might reflect skepticism from tools that overpromise and under-deliver, such as unreliable chatbots or lackluster generative content. 2. Labeling a product as AI-driven did little to justify a higher price. Customers were unwilling to pay more unless the tool demonstrated clear, compelling benefits. (Superhuman was the only exception.) 3. The impact on trust was largely neutral. For most brands, explicitly mentioning AI didn’t increase customer confidence in the tool’s reliability. What to do instead: - Lead with benefits, not AI-jargon. Canva says its "Magic Design" feature helps users effortlessly make beautiful designs -- not that it's a tool for "AI-powered productivity". - Make claims tangible. GitHub Copilot highlights that "developers are coding up to 55% faster." - Take a page from behavioral science with the Endowment Effect (think: reverse trial of AI features). - When you must use “AI,” be thoughtful. Pair it with a clear use case or branding that connects to user needs. Can't wait to hear what y'all think about this data. #ai #messaging #startup