The Smart Way To Use AI In Your Advertising

The AI Advertising Dilemma Trust vs Efficiency

Image-generative artificial intelligence is revolutionizing the advertising world, offering a faster and cheaper way to create compelling visuals. However, new research from Virginia Commonwealth University reveals a critical catch: consumer trust can take a nosedive when AI is used to generate images of people, especially in service industries where personal relationships are key.

So, how can marketers leverage the power of AI without alienating their audience?

A Simple Strategy Use AI for Scenes Not People

The solution, according to a study co-authored by Dr. César Zamudio, an associate professor of marketing at VCU, is selective implementation. The key is to separate the environment from the service provider.

"When tangible elements — like a doctor’s office environment — are AI-generated, but the service provider’s image is a real picture, trust and ad effectiveness are restored," Zamudio explains. "The takeaway? Use AI where it counts, and let the human element shine."

This balanced approach allows businesses to benefit from AI's cost and speed advantages for creating backgrounds, office settings, or equipment while keeping authentic human faces at the forefront of their campaigns.

Gaining a Competitive Edge with Smart AI Use

This strategy is particularly valuable for small businesses looking to compete with larger brands. By using AI to handle the scenic elements of an ad, they can significantly reduce production costs without sacrificing the credibility that builds consumer confidence.

"Our research offers a simple, actionable strategy: Use AI for settings, not people," Zamudio states. "This approach can help you cut ad costs without cutting credibility, giving you a real edge to beat bigger brands.”

Empowering Consumers in the AI Era

The study's findings aren't just for marketers; they also serve as a guide for consumers navigating an increasingly AI-driven marketplace.

"Not all AI ads are misleading," Zamudio notes, "but knowing what’s real — and what’s not — can shape your trust in a brand. Our study reveals how AI in advertising shapes trust, helping you stay informed, skeptical, and aware in today’s digital marketing landscape.”

The Future of Trust in Service Advertising

As government and industry bodies push for greater transparency and AI disclosures in advertising, understanding how to design effective AI-assisted ads is more important than ever. This is especially true for service-based businesses, where advertisements must make intangible offerings feel both real and trustworthy.

By keeping real people front and center, brands can successfully walk the tightrope between technological innovation and consumer confidence. The full findings are detailed in the study, "Service Ads in the Era of Generative AI: Disclosures, Trust and Intangibility," recently published in the Journal of Retailing and Consumer Services.