Current Issue Summary
June 2025 (Vol. 65, Issue 2)
The Inverted U-Shaped Effect of Personalization on Consumer Attitudes in AI Generated Ads
Investigate how consumers react to varying degrees of personalization in AI-generated advertisements. Through three experiments across different contexts (travel, sports drinks, and smart speakers), the researchers find that consumer attitudes toward AI-generated ads follow an inverted U-shape: moderate personalization leads to the most favorable responses, while low and high levels are less effective. The key factor is the balance between perceived utility and perceived threat (PUTD). Moderate personalization maximizes utility without triggering strong privacy concerns, whereas excessive personalization increases perceived threats and reduces trust. The effect is stronger among consumers with high privacy concerns, emphasizing the need for advertisers to tailor personalization carefully.