Behind the Numbers: How Consumers Interact with Ads- Balancing Effectiveness, Intrusiveness, and AI-Generated Content | Feb 7, 2025
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How are leading CMOs transforming marketing from a cost center to an engine for growth? Zeta 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. Hey gang, it's Friday, February 7th. Evelyn and listeners, welcome to Behind the Numbers. Any marketer video podcasts?

You just said Evelyn. No, Rahul. Rahul, you're not welcome here. No, Rahul. Rahul, welcome to the show. That's been made clear several times already before I even started laughing. I nailed that intro. Rahul, how you doing? 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 part of my negotiation process. Welcome to the show. Didn't see you there, buddy. Anyone up to podcast made possible.

by Zeta 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. Director of Reports Editing, based in the 7th state to ratify the Constitution, Maryland. It's Rahul Chadha. Hi Marcus, thanks for having me. 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. Hi.

Hi Marcus, hello everyone. Hello. So, why the introductions? Because the fact of the day is about what was the last state to join the US? Well, the first state to ratify the constitution was...

Delaware, December 7th, 1787. And then pretty quick succession, just weeks apart, Pennsylvania, New Jersey, Georgia, etc. 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. Wow. So can you guess any of the five? Yeah.

Alaska? Yeah, I would have guessed Alaska and Hawaii. Yes, very nice. They were in fact 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, very little, but still. Was the flag, did it only have 48 stars on it at that point? Good question. I hope so. Because that would be weird. Why are there 50? Are we expecting company? Which is crazy how young they are. Because Pallavi 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.

Bye.

All right, folks, we have the Super Bowl happening this coming weekend. Good luck to both 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 apiece. What 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 trish la 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 advertising.

in creative fields, spurring 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?

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 and,

What is the context that the ad is served in? Like, 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's, there are different shares. Was it roughly like, you know, 80% of young people knew it was and 75% of older people would be like less, but not really. But most people did.

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

I think it has to do a lot with the skills of being able to 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 signals that younger people are better at identifying very quickly, almost intuitively, without necessarily having to engage their brain to climb on the ad.

But that's also assuming that they are correct in- That's true. Yes. Because it'd be like, oh, can you name all 50 states? Like, yeah, like do it. It's like, oh, well, is it 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 what to look for, I think is interesting. I think also it's like assuming that people are dedicating the brainpower to trying to decipher whether or not

you 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, that's a good point. 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, a

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? That's a good point. I think it's all about perception here. So if there is, if the consumer knows for sure this is an AI generated ad, then any of the negative things

implications that that brings if they have negative associations with AI for whatever reason. I think, Marcus, 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. Um, 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, uh,

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 of gray area. There's also, I think brands who don't label their creative as AI generated ads,

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 stand-in for all of the anxieties that I think a lot of people feel around AI. It's 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. The other part that's like tough for brands is

The media format is, I think, a really important consideration that probably gets under-discussed. I think we've probably all seen a lot of AI creative in 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 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. Yes. 100%. People don't like feeling bamboozled.

by brands, unless it's maybe like a plot twist in a Super Bowl commercial 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. But yeah. You know, I think the fact that you mentioned, Marcus, that Super Bowl advertisers are probably not going to go all in on AIs, because I think it's a reflection of the fact that still need like

Test and experiment phase for brands. Yeah. Like, nobody wants to drop $8 million on an ad that's going to, like, potentially upset a lot of people. Like, they want to go with it, like, as much, like, tried and true methods. Although, you know, there's always some risk-taking probably from some brands in terms of their messaging or the, you know, the tone of the creative. And 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. 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, the creative officer, chief creative officer was saying that human creativity remains at the core, but

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 power 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 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. OK, this is good AI. This is bad AI, etc. 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 A.J. Dellinger of Gizmodo. He was saying that if it's the whatever Super Bowl, AI, crypto, that's often a sign that a bubble is about to burst. The crypto, oh, wow.

That flooded the 2022 Super Bowl with ads and tried to usher itself into the mainstream. 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. Derlinger 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, I doesn't want to be flooding the zone too much when it comes to this year's or any Super Bowl by that matter. Don't want to manifest their downfall here. So next question I have is,

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 moment 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? 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...

I recall 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 us.

The respondents, the level of interruption of the ad rather than its invasiveness informed how ads were ranked. And that helps sort of explain why mid-roll ads, display ads that cover a full screen and ads that like follow users around a screen were ranked as much more intrusive than any targeting method. Respondents were not necessarily intrusive.

you know, 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. That's worse than it being too personal. Right.

Right. For some people, like, you know, that's not necessarily going to be, I personally would rather an annoying, interruptive experience. Just 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 preference.

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 yeah so um

Yeah, there's a lot of information in this report. But one of the big takeaways, as everyone was saying, the most intrusive ads and the least likely to be noticed ads, so the worst kind, were the ones where the display covers the entire screen. The best kind, the most likely to be noticed, and the least intrusive ads were pre-roll 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 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

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?

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, I think it's really easy for the consumer to dismiss this ad as not being targeted to them. It's incredibly difficult, I think, to get all those variables right. Yeah. Evelyn, how about for you? What's top of the list in terms of what marketers are getting wrong here? Well, I was sort of...

I tried it in my thought exercise to understand 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 and physical surface under the sun. Like,

There's not a problem to 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. 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 and it's also easy for them to feel ignored, you know, it's, it just speaks to how just incredibly difficult it is getting all these like aspects of, uh, online campaigns. Correct. Yeah. Two, two big ones for me. Um,

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 I heart media, 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 where politicians, all politicians struggle to relate to the average American when they're talking about we should raise the minimum wage. It's 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. So I mean, everything you put out earlier in the episode is so significant. Age matters and how you communicate with consumers. A DWI 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 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 is called How Consumers Perceive Ads. The link is in the show notes or our ProPlus subscribers can head to emarketer.com as well. That's all we have time for this episode. Thank you so much to both my guests. Thank you first to Evelyn.

Thank you, Marcus. Thanks, everyone. Had a good time. Thank you to Rahul. Great to see you, fella. I'm so glad you joined. Thanks for having me, Marcus. I appreciate it. Probably was not your goal in the beginning. So, always in 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, a new marketer video podcast made possible by Zeta Global.