Current Issue Summary
June 2025 (Vol. 65, Issue 2)
When AI Doesn’t Sell Prada: Why Using AI-Generated Advertisements Backfires for Luxury Brands
How do consumers react to luxury brand advertisements that disclose the use of AI-generated imagery? Through three experiments, one real-world field test and two lab studies, the researchers find that AI disclosures lead to more negative consumer responses when associated with luxury brands. This is largely due to perceptions that AI-generated ads require less creative effort, which undermines the perceived authenticity central to luxury branding. However, the negative effects of AI disclosure can be mitigated if the AI-generated imagery is highly creative, which restores a sense of effort and authenticity. The study concludes that while AI can offer cost-effective visual production, luxury brands should use it judiciously and strategically, particularly ensuring transparency and emphasizing creativity to avoid damaging brand perception.