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Marcus
How are leading CMOs transforming marketing from a cost center to an engine for growth? Zetta Global explains in their new ebook. Conveniently it's called Driving growth in the AI era. The CMO's new playbook. Download it today. Link in the show notes.
Rahul Charda
Hey gang.
Marcus
It's Friday, February 7th. Evelyn and listeners, welcome. So behind the numbers. And he marked it podcast.
Evelyn Mitchell Wolf
You just said Evelyn. No, Rahul. Rahul, you're not welcome here.
Marcus
No, Rahul.
Rahul Charda
Rahul made clear several times already before.
Marcus
I nailed that intro. Rahul, how you doing?
Rahul Charda
Excellent. I'm so glad that you guys let me take the hood off my head so people could actually see my face. That was welcome to part of my negotiation.
Marcus
See you there, buddy. Anyone after podcast made possible by Zetta Global. Perfect introduction. I'm Marcus. And today we'll be discussing, if Rahul doesn't leave in disgust, how the conversation might shift around AI generated ads and the main reason consumers feel ignored by marketers. Why Rahul feels ignored by Marcus. Today I'm joined by two people. A director of reports editing based in the second seventh state to ratify the Constitution, Maryland is Rahul Charda.
Rahul Charda
Hi, Marcus. Thanks for having me.
Marcus
Hey, fella. And we're also joined by our senior analyst covering digital advertising and media based in the 10th state to do so, Virginia. It's Evelyn Mitchell Wolf.
Evelyn Mitchell Wolf
Hi, Marcus. Hello, everyone.
Marcus
Hello. So why the weird introductions? Because the fact of the day is about what was the last state to join the U.S. well, the first state to ratify the constitution was Delaware, December 7, 1787. And then pretty quick succession, just weeks apart. Pennsylvania, New Jersey, Georgia, et cetera. After the first 13 new states did not ratify the Constitution but were admitted to the union by an act of Congress, many were already territories, but five states, folks, didn't sign up until the 1900s.
Rahul Charda
Wow.
Marcus
So we. Can you guess any of the. Any of the five?
Evelyn Mitchell Wolf
Alaska?
Rahul Charda
Yeah, I would have guessed Alaska and Hawaii.
Marcus
Yes, very nice. They were in fact the. The last two to do so. So I'll go through them. Oklahoma, 1907, New Mexico and Arizona in 1912. And Alaska and Hawaii in 1959. The last two to join, 1959. Alaska in January, Hawaii in August. So when my parents were little, Hawaii and Alaska weren't part of America, like very. They were very little.
Evelyn Mitchell Wolf
But still was the flag. Did it only have 48 stars on it at that point?
Marcus
Good question. I hope so, because that would be weird. Why are there 50? We expecting company, which is crazy. How young they are. Because Pahlavi Rao was pointing out a visual capitalist, pointing out that Disneyland was founded four years before Hawaii and Alaska became states. Wow. Anyway, today's real topic how consumers interact with ads. Alright folks, we have the super bowl happening this coming weekend. Good luck to boo teams. This year's broadcaster Fox has long since sold out of ad spots for Super Bowl 59, with more than 10 of these commercials selling for $8 million a piece. Also makes this year's commercials unique aside from the eye watering price tag. Is, according to Mark Evans, Executive VP of Ad Sales for Fox Sports, that you will see some more AI focused creative. Mr. Evans says that both massive companies investing in AI and some AI focused companies will be represented during the game. However, AI made ads or ads made almost entirely by AI sitting out of Super Bowl 59, writes Trishler Oswald of Adweek, as brands tread lightly when it comes to AI during the big game. She notes that the super bowl may be the ultimate stage for advertisers, but don't expect this year's commercials to earn the moniker AI Bowl. The AI Bowl. Industry experts told adweek that despite AI's growing influence in marketing, most brands are likely to lean on tried and true methods. Celebrity cameos, humor, emotional storytelling for fear of igniting the ire of audiences. Ms. Oswald reminds us that last year saw waves of backlash over AI generated ads as well as frustration at companies like Google and Apple over hard selling, the technology and their tone deaf messaging, unintended bias, and a growing influence of AI in creative fields sparing fears of lost human jobs. So think Coca Cola's AI created holiday ad is one example, which critics accused of lacking the warmth and joy of previous seasonal campaigns. So with all that in mind, Evelyn, I'll start with you. How much is too much when it comes to AI generated ads?
Evelyn Mitchell Wolf
I think, I mean it's not a one size fits all answer. I think it depends on the brand. It depends on the product. The individual ad in question. Like is it super obvious that the ad is AI generated? Is it obvious because the ad looks bad? Or is it obvious because it depicts something that's impossible to recreate in reality? Like has the brand clearly labeled the ad as AI generated? What is the context that the ad is served in? Is it being served in a scrollable feed or as part of an unskippable mid roll experience on ctv and something like a Super Bowl? And I think really it all comes down to the audience. We conducted a survey of consumers last summer and we'll discuss more results from that survey. A little bit Later. But a couple of questions centered on AI generated ads. We started by asking respondents whether they had noticed any ads that they thought were created by AI. Older respondents were the most likely to say that they didn't know. So, and I've personally witnessed this play out as well, like spending time with my parents over the holidays. My mom would show me a social media post that I barely had to lay eyes on to clock it as an AI generated ad or AI generated post. And she had no idea what she was looking at. So there are different shares.
Marcus
Was it roughly like, you know, 80% of young people knew it was, and 75% of older people like less, but not really, but most people did.
Evelyn Mitchell Wolf
Well, okay, so we have baby boomers, about 58% said that they didn't know if they had seen any AI generated ads. And then Gen Xers that went down to 48%. Millennials, that went down to 37%. And then Gen Z, unsurprisingly, had the lowest percentage of respondents answering that they didn't know at 31%. So pretty significant span there, generationally speaking. And I think it has to do a lot with the skills of being able to, you know, spot like, is there a little halo around the person? Does the person look a little bit off? If there is a person in the ad, there are just, there are signals that younger people are better at identifying very quickly, almost intuitively, without, without necessarily having to engage their brain to collect an AI ad.
Marcus
But that's also assuming that they are correct in.
Evelyn Mitchell Wolf
That's true.
Marcus
Yeah. Because it'd be like, oh, can you name all 50 states? Like, yeah, like, do it. It's like, oh, well, the Alabama one. So you know, Arizona joined recently. So yeah, who knows if they're able to actually do it. But even just having the confidence to say, yes, I know, I know what to look for, I think is interesting.
Rahul Charda
I think also it's like assuming that people are dedicating the brain power to trying to decipher whether or not know an ad is AI generated or not. I think it's assuming that people are paying a lot more attention to ads than they probably are. You know, it's really like conversation too, you know.
Marcus
Well, so then does it, does it matter if they're clearly labeled like you mentioned? That's just such a good point because there are. Is it California? Were they using AI watermarks? Did that legislation get passed? I forget who, which state was trying to, to implement that. But let's, let's imagine a world where that is, you know, federal law that you do have to put a watermark on their ad saying this one's generated entirely by AI. How much does that change things for people?
Evelyn Mitchell Wolf
That's a good point. I think it's all about perception here. So if the consumer knows for sure this is an AI generated ad, then any of the negative implications that that brings, if they have negative associations with AI for whatever reason. I think Markus, you just listed a bunch of reasons why people were not thrilled with AI related ads last year so they could have any of those reasons that they just don't like AI ads. And so if it's obvious in that it's labeled as an AI generated ad, then of course they're going to respond negatively. That also speaks to, there's sort of a tightrope walk that brands have there. And I think it goes back to my point that there's not a one size fits all situation. Like if the ad is high quality, like if the AI generated ad doesn't, it's not super obvious that it's just bad AI generated ad and, and it's not labeled, consumers might not clock it and therefore there is the whatever negative halo effect might be at play won't apply. So there's a lot, it's a lot of gray area.
Rahul Charda
There's also, I think brands who don't label their creative as AI generated run the risk of damaging trust with consumers if it's revealed later on that they have used AI to generate ads. I mean, I think right now we're at a point where AI, I guess in terms of how it's used in ads is a really easy standin for all of the anxieties that I think a lot of people feel around AI. You know, it's like hard to think of a lot of. I mean I think you could consider a lot of people's, you know, labor or their lives just fundamentally changing as a result of the uprise of AI tools that could displace people's jobs. And you know, ads I think are a convenient stand in or just place for people to project their fears and anxieties about the use of AI more broadly, which I think is just a risk with brands. Yeah, I think the other part that's like tough for brands is, you know, the media format is I think a really important consideration that probably gets under discussed. You know, I think we've probably all seen a lot of AI creative and display ads and had no idea because it was AI generated text or something like that. Whereas video ads, you know, the one you cited like the Coca Cola ad. It's much more obvious when that creative falls into the uncanny valley. You know, I watched that Coca Cola ad, the original one from last year that was AI generated and then the one from 1995 that was, that it was based on and there was a noticeable difference. The most recent ad that was generated with AI didn't actually have any people in it. It didn't have any AI created humans, whereas the first one did. And I think that was really intentional because I think they know how disquieting seeing like you know, sort of soulless dead eyed human that's generated by AI which I think is kind of where the, at least as far as I've seen the technology kind of sort of still is, can just put people off in a way that you know, just reading a, you know, a text based ad on display that comes across your social feed or something, you're not using.
Evelyn Mitchell Wolf
A clock that is AI generated 100%. People don't like feeling bamboozled by brands unless it's maybe like a plot twist in a Super bowl commercial with that, with that emotional storytelling kind of thing that people lean into in this season. We'll see. Very excited for super bowl commercials this weekend. We'll see.
Rahul Charda
You know, I think the fact that you mentioned Marcus, that Super bowl advertisers are probably not going to go all in AI because I think it's a reflection of the fact that still need like test and experiment phase for brands.
Evelyn Mitchell Wolf
Yeah.
Rahul Charda
Like nobody wants to drop $8 million on an ad that's gonna like potentially upset a lot of people. Like they wanna go with it like as much like tried and true methods. Although you know there's always some risk taking probably for some, some brands in terms of their messaging or the, you know, the tone of the creative and.
Evelyn Mitchell Wolf
They'Re really, they're really paying attention too. So if something goes wrong with AI, a lot of people will notice which might not be the case in other applications.
Marcus
A great point. And Rahul, to what you were saying, just because AI is, isn't on camera doesn't mean it's not behind it. Which I think is a really important one. WPP's agencies that are working on about five Super bowl spots where AI plays a role in elements like production, ideation, media. They the, the creative officer, chief creative officer was saying that human creativity remains at the core but who knows what's going on behind the scenes. Just because AI isn't front and center doesn't mean it's not been used to generate the thing. It's also this interesting, this idea of people associating any experience they've had with AI with any future experience they might have with AI and their feelings towards that. Because there's one survey from AI powered SEO platform Chadix, 70% of consumers feel emotionally manipulated by AI shopping assistance. And so, you know, if that's their experience with AI in that world, you know, how, how hard is it going to be for them to feel differently about AI in commercials or AI being used to identify people at passport control. Whatever area AI is in, they're going to probably have similar feelings towards it because it's hard to kind of pass out. Okay, this is good AI, this is bad AI, et cetera. Yeah, the other point here, before we move on to the next question, sticking with the super bowl for a second, it's usually not a good thing to be the super bowl label. So for example, the AI super bowl, this is a point made by AJ Dellinger of Gizmodo. He was saying that if you're the, if it's the whatever Super Bowl AI crypto, that's often a sign that a bubble's about to burst. The crypto that flooded the 2022 Super bowl with ads and tried to usher itself into the mainstream. The the following happened to crypto exchanges before the next Super Bowl. FTX went bankrupt. Crypto.com experienced major layoffs. Coinbase spent the next year in court trying to set right a case for anti money laundering protocols. And by the next Super Bowl 2023, there were no crypto ads. Mr. Dellinger was also pointing out that something similar happened back in 2000 when the Super bowl was inundated with dot com company ads only for the bottom to fall out of the industry later that year. So maybe crypto, sorry, AI doesn't want to be flooding, flooding the zone too much when it comes to this year's or any superbot by that matter don't.
Evelyn Mitchell Wolf
Want to manifest their downfall here.
Marcus
So next question I have, and this is from some research that our colleague Max Willins, who's currently out for the next couple of months, so we're having this discussion without him. But he did a lot of research on this right before he left. But he'll be back, don't worry folks. He'll be back in a month or two. And he was writing about how consumers perceive ads. And so Evelyn, I'm wondering what do you make, given his research and any other research that you've seen of the relationship between how much people notice Ads versus how intrusive they find them.
Evelyn Mitchell Wolf
I mean to me there are two widely applicable takeaways. The first is that consumers have mastered the art of ignoring ads. That's a big one. And it goes back to. You made that point briefly when we were talking about AI too. And then the second takeaway is that an ad does not have to be intrusive to be noticeable. I think it's also important to mention that in Max's report he lays this out very plainly and the way that we crafted the survey, how that influenced the respondents, the level of interruption of the ad rather than its invasiveness informed how ads were ranked. That helps sort of explain why mid roll ads, display ads that cover a full screen and ads that follow users around a screen were ranked as much more intrusive than any targeting method. Respondents were not necessarily answering this ad makes me feel creeped out. They were also answering. I think they were answering that, but they were also answering this ad just annoys me. This ad makes my online experience, it disrupts my experience in a negative way.
Marcus
That's worse than it being too personal.
Evelyn Mitchell Wolf
Right, right. For some people, like, you know, that's not necessarily going to be. I personally would rather an annoying interruptive experience just if, as long as I can remove it, like if I can X out of it. I would rather have a pop up than a pop up that is or any ad that is targeted to me on information that I didn't want to be available to advertisers in the first place. But that's just me. Everyone has different. You know, this is the thing about privacy and about targeted advertising is that it is all a game of personal preferences that advertisers, you know, have to assume that we live in an opt out legal environment and privacy. So if a consumer does not opt out in all the right places of having their data shared and used for targeting, then the advertiser's assumption is that they're okay with it.
Marcus
Yeah, so yeah there, there's a lot of information in this, in this report. But one of the big takeaways, as Evelyn was saying, the most intrusive ads and the least likely to be notice ads. So the, the worst kind were just with ones where the display covers the entire screen. The best kind, the most likely to be noticed and the least intrusive ads were pre raw video and targeted ads using your search history were a close second. And yeah, our colleague Max Williams summed up beautifully writing the level of interruption of the ad rather than its invasiveness informed how ads were ranked mid row ads, display ads, and that fully covered the screen. And ads that follow users around the screen were ranked as much more intrusive than any targeting method. So that's ads that are trying to overwhelm, in a lot of instances, the consumer, but they're very proactive in trying to say, hey consumer, we want to sell you this. The other side of it though, is that sometimes consumers feel ignored by marketers. They feel like they're not trying to, to, to pay attention to them and to the people that they are, the demographics that they represent. And there was a recent Martech article by Chris Wood noting that nearly half of consumers say they feel ignored by marketers, according to research by iheartmedia in partnership with Malcolm Gladwell's Pushkin Industries and some other folks as well. Rahul, what do you think is the number one reason that people feel ignored by marketers?
Rahul Charda
I mean, I think it relates to the incredible challenge that marketers face in getting the right message to the right person at the right time. You know, individuals are incredibly complex, nuanced people, you know, and if you get one thing wrong, you can just kind of become, I think, invisible to that consumer. You know, I think the survey asked respondents about the importance of five different values. If a marketer gets four of those values right in terms of targeting their message but misses out on one, you know, I think it's really easy for the consumer to dismiss this ad as not being being targeted to them. You know, it's, it's incredibly difficult, I think, to get all those variables right.
Marcus
Yeah. Evelyn, how about for you, what's top of the list in terms of what marketers are getting wrong here?
Evelyn Mitchell Wolf
I, well, I was sort of, I tried it in my thought exercise to understand the, the word ignored and because I found out that it'd be a really interesting word choice. If brands were ignoring consumers, there wouldn't be ads plastered on every digital surface under the sun. Like there's, there's not a problem me of being ignored. I think it's more that consumers feel like advertisers are ignoring their end of the value exchange of targeted advertising. Like I was mentioning, with the opt out environment and privacy and consumer data use in this industry, the idea is that consumers know advertisers have access to their data and are willing to let that data be used for targeting or for personalization because consumers get two things out of it. One, they get free or cheaper access to content. That's the idea behind ad supported tiers on streaming platforms. But the second Thing is that consumers get served ads that are actually relevant to them and that might provide them with useful information when they make purchase decisions. And that's where consumers feel ignored. Like either the product or service advertised is irrelevant to them. The information presented in the ad is irrelevant to their decision making process. They could also feel like the ad is in poor taste. However, whatever message is communicated to them, like even the word choice, like something like ignored versus whatever other word makes more sense to that consumer. That can just make it feel like whatever data they put out there, whatever all that information advertisers have on them is for what you did it wrong.
Rahul Charda
And I think too, you know, if even if advertisers are getting everything right and just to reference the earlier question and the consumer just doesn't notice the ad, it's also easy for them to feel ignored. You know, it just speaks to how just incredibly difficult it is getting all these like aspects of online campaigns correct.
Marcus
Yeah, two big ones to me. One is income bracket because most folks working in marketing are in a higher income bracket than the average American. The average salary of A marketer is $67,000 according to Indeed the Census Bureau saying that that would mean that close to half the country makes less than them. And iheartmedia, the study found that consumers seek approval and conduct research to make purchases of $100 or more. Marketers make purchases exceeding a thousand dollars without consulting anyone else in their life and within a matter of hours or days. And so I think that's a big part of it. I think that's a lot of the time why politicians, all politicians struggle to relate to the average American when they're talking about we should raise, raise the minimum wage. It is hard when you have about half of people in Congress are millionaires. And there is that disconnect between my experience and your experience and what you're telling me and the experience that I may be living as someone who is earning a lot less. So I think that's a big part of it. And then the second thing here is age. We see this across the board with everything. The demographics with generation certainly point out earlier in the episode are so significant. Age matters and how you communicate with consumers. GWI study found that Gen Z are around 50% more likely to say that they want to be entertained in commercials. Boomers around 50% more likely to say I just want the product information, just tell me how I can use it and what it's going to do for my life. So I think they're two important ones. But yeah, there's lots to consider. It's really hard to get to roll to what you were saying. Right message, right place, right time, right person, right everything. But if you want a little bit more help with that, Max's full report. It's called how consumers perceive ads. The link is in the show notes or our Pro plus subscribers can head to eMarketer.com as well. That's all you have time for for this episode. Thank you so much to both my guests. Thank you. First to Evelyn.
Evelyn Mitchell Wolf
Thank you Marcus. Thanks everyone. Had a good time.
Marcus
Thank you to Rahul. Great to see you fella. I'm so glad you joined.
Rahul Charda
Thanks for having me, Marcus. Appreciate it.
Marcus
Probably not to all you in the beginning crew. Victoria, John, Lance and Danny. Stuart runs the team and Sophie does our social media. And thanks to everyone for listening in. We hope to see you on Monday for Behind the Numbers, an E marketer video podcast made possible by Zeta Global.
Behind the Numbers: How Consumers Interact with Ads – Balancing Effectiveness, Intrusiveness, and AI-Generated Content
Published on February 7, 2025, by EMARKETER
In the latest episode of EMARKETER's podcast, "Behind the Numbers," hosts Marcus and Rahul Charda engage in a deep dive into the evolving dynamics of consumer interaction with advertisements. Joined by Evelyn Mitchell Wolf, a senior analyst specializing in digital advertising and media based in Virginia, the discussion navigates the delicate balance between ad effectiveness, intrusiveness, and the burgeoning role of AI-generated content.
The episode opens with an exploration of the upcoming Super Bowl 59, highlighting the astronomical cost of ad placements and the tentative incorporation of AI in commercial content. Marcus introduces the topic by mentioning that Fox Sports has sold out ad spots, each fetching around $8 million, with a notable inclusion of AI-focused creative elements.
Mark Evans, Executive VP of Ad Sales for Fox Sports, notes, “You will see some more AI-focused creative.” However, as Trishler Oswald of Adweek reports, despite AI's growing influence, brands are treading carefully. Oswald emphasizes, “Don't expect this year's commercials to earn the moniker AI Bowl,” citing last year's backlash against AI-generated ads as a deterrent. For instance, Coca-Cola faced criticism for its AI-created holiday ad, accused of lacking the warmth of traditional campaigns.
Evelyn Mitchell Wolf delves into a consumer survey conducted last summer, revealing generational disparities in recognizing AI-generated advertisements. She states, “Baby boomers, about 58% said that they didn't know if they had seen any AI-generated ads,” compared to Gen Z at 31%. Evelyn attributes this gap to younger generations’ inherent ability to detect subtle cues in advertising, such as “a little halo around the person” or inaccuracies that hint at AI involvement.
Evelyn Mitchell Wolf (05:09):
“I think it depends on the brand. It depends on the product. The individual ad in question... it all comes down to the audience.”
Marcus probes further, questioning the accuracy of these self-reported detections. Evelyn concurs, acknowledging the uncertainty inherent in consumers' self-assessments.
A significant portion of the discussion centers on whether ads should be explicitly labeled as AI-generated. Evelyn highlights the potential repercussions: “If the consumer knows for sure this is an AI-generated ad, then any of the negative implications that that brings... they could have any of those reasons that they just don't like AI ads” (08:38).
Rahul Charda adds another layer, emphasizing the trust factor: “Brands who don't label their creative as AI-generated run the risk of damaging trust with consumers if it's revealed later on that they have used AI to generate ads” (09:47). This transparency—or lack thereof—could either mitigate or exacerbate consumer skepticism towards AI in marketing.
Marcus introduces the notion that AI might be influencing advertisements behind the scenes, even if not overtly visible to the consumer. He references WPP's agencies utilizing AI in production, ideation, and media planning for Super Bowl spots, underscoring that “human creativity remains at the core” but AI’s role is quietly expanding (14:38).
This behind-the-scenes use of AI highlights a dichotomy in advertising strategies: while consumers may resist overt AI presence, the technology continues to enhance efficiency and creativity in the background.
Transitioning to consumer behavior, Evelyn discusses Max Williams’ research on how consumers perceive ads based on their intrusiveness versus noticeability. She reveals two key takeaways:
Evelyn Mitchell Wolf (15:51):
“Consumers have mastered the art of ignoring ads. ... an ad does not have to be intrusive to be noticeable.”
The research indicates that ads interrupting the user experience—such as mid-roll video ads or full-screen displays—are perceived as more intrusive. In contrast, targeted ads based on search history or pre-roll video placements strike a better balance between visibility and user experience.
A pressing concern discussed is the sentiment among consumers feeling ignored by marketers. Evelyn elucidates that this feeling stems not from the absence of ads but from the irrelevance of the content: “Consumers feel like advertisers are ignoring their end of the value exchange of targeted advertising” (20:25). This disconnect is further exacerbated by demographic mismatches; for instance, many marketers fall within higher income brackets compared to the average consumer, leading to misaligned messaging.
Marcus adds a socio-economic perspective, noting that “about half the country makes less” than the average marketer, which can contribute to a perceived disconnect in advertising narratives and values (22:19).
Age plays a significant role in how consumers perceive and interact with ads. A GWI study mentioned by Marcus found that Gen Z consumers are “around 50% more likely to say that they want to be entertained in commercials,” whereas boomers prefer straightforward product information. Evelyn ties this to the concept of a value exchange, where consumers are willing to tolerate ads if they receive relevant information or access to free content in return.
The episode culminates with a consensus on the nuanced approach required in modern advertising. While AI presents new opportunities for personalization and efficiency, its deployment must be carefully managed to maintain consumer trust and avoid perceptions of intrusiveness. Effective advertising in the current landscape hinges on understanding and respecting the diverse preferences and expectations of different consumer segments.
Marcus concludes:
“It’s really hard to get to [the right] message, the right place, the right time, the right person, the right everything.”
For marketers seeking to navigate these complexities, the episode references Max Williams' comprehensive report, How Consumers Perceive Ads, available for EMARKETER Pro Plus subscribers and through eMarketer.com.
This episode of "Behind the Numbers" offers a thorough examination of the delicate interplay between ad effectiveness, consumer intrusiveness, and the integration of AI in advertising. By highlighting generational differences and emphasizing the importance of relevance and trust, EMARKETER provides valuable insights for marketers striving to connect authentically with their audiences in an increasingly digital and AI-driven landscape.