Behind the Numbers: How Consumers Interact with Ads- Balancing Effectiveness, Intrusiveness, and AI-Generated Content

Audio by Marcus Johnson, Evelyn Mitchell-Wolf, and Rahul Chadha | Feb 7, 2025

Episode Transcript:

Marcus Johnson (00:00):

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.

Marcus Johnson:

Hey gang, it's Friday, February 7th. Evelyn and listeners, welcome to Behind the Numbers, an EMARKETER podcast.

Evelyn Mitchell-Wolf (00:29):

No Rahul? You just said Evelyn . No Rahul. Rahul, you're not welcome here.

Marcus Johnson (00:34):

No Rahul. Rahul, welcome to the show.

Rahul Chadha (00:35):

That's been clear several times already before.

Marcus Johnson (00:41):

Why are you laughing? I nailed that intro. Rahul, how you doing?

Rahul Chadha (00:45):

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-

Marcus Johnson (00:51):

Welcome to the show.

Rahul Chadha (00:53):

Part of my negotiating [inaudible 00:00:53].

Marcus Johnson (00:52):

Didn't see you there, buddy. EMARKETER podcasts 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 seventh state to ratify the constitution, Maryland. It's Rahul Chadha.

Rahul Chadha (01:25):

Hi, Marcus. Thanks for having me.

Marcus Johnson (01:27):

Hey, fella. 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 (01:35):

Hi, Marcus. Hello everyone.

Marcus Johnson (01:36):

Hello. So why the weird 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, 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.

Evelyn Mitchell-Wolf (02:22):

Wow.

Marcus Johnson (02:23):

Can you guess any of the five?

Evelyn Mitchell-Wolf (02:26):

Alaska?

Rahul Chadha (02:28):

Yeah, I would've guessed Alaska and Hawaii.

Marcus Johnson (02:30):

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. They were very little, but still.

Evelyn Mitchell-Wolf (02:55):

Was the flag, did it only have 48 stars on it at that point?

Marcus Johnson (03:00):

Good question. I hope so because that'd be weird. Why are they 50? Are we expecting company? Which is crazy how young they are, because Pallavi Rao was pointing out, at Visual Capitalist, was pointing out that Disneyland was founded four years before Hawaii and Alaska became states.

Evelyn Mitchell-Wolf (03:17):

Wow.

Marcus Johnson (03:18):

Anyway, today's real topic, how consumers interact with ads. 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 ads spots for Super Bowl LIX with more than 10 of these commercials selling for $8 million a piece. What 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'll 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 are sitting out of Super Bowl LIX writes Trishla Ostwal 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."

(04:24):

Industry experts told Adweek that despite AI's growing influence in marketing, most brands are likely to lean on trying and true methods, celebrity cameos, humor, emotional storytelling for fear of igniting the ire of audiences. Miss Ostwal 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, 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?

Evelyn Mitchell-Wolf (05:10):

I think 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. 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? 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 in 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.

(06:03):

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-

Marcus Johnson (06:32):

What were the shares? Was it roughly like 80% of young people knew it was and 75% of older people? Less but not really, but most people did?

Evelyn Mitchell-Wolf (06:40):

Well, okay, so we have Baby Boomers about it's 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 spot 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 signals that younger people are better at identifying very quickly, almost intuitively without necessarily having to engage their brain to clock an AI ad.

Marcus Johnson (07:39):

That's also assuming that they are correct in-

Evelyn Mitchell-Wolf (07:43):

That's true, yes.

Marcus Johnson (07:45):

Because it'd be like, "Oh, can you name all 50 states?" "Yeah." "Do it." It's like, "Oh, well, is Alabama one?" 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.

Rahul Chadha (08:01):

I think also it's like assuming that people are dedicating the brain power to trying to decipher whether or not 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. This relates to [inaudible 00:08:13]-

Evelyn Mitchell-Wolf (08:13):

That's a good point.

Rahul Chadha (08:14):

Conversation too.

Marcus Johnson (08:15):

Well. So then does it matter if they're clearly labeled? You mentioned, that's just such a good point because there are California, were they using AI watermarks? Did that legislation get passed? I forget which state was trying to implement that, but let's imagine a world where that is 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?

Evelyn Mitchell-Wolf (08:38):

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 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. 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. If the ad is high quality, if the AI-generated ad doesn't, it's not super obvious that it's just bad AI-generated ad 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.

Rahul Chadha (09:47):

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 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 think you could consider a lot of people's labor or their lives just fundamentally changing as a result of the uprise of AI tools that could displace people's jobs and 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.

[NEW_PARAGRAPH]I think the other part that's tough for brands is 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 and display ads and had no idea because it was AI-generated text or something like that. Whereas video ads, the one you cited like the Coca-Cola ad, it's much more obvious when that creative falls into the uncanny valley. 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.

(11:17):

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 sort of soulless dead-eyed human that's generated by AI, which I think is kind of where at least as far as I've seen, the technology kind of sort still is can just put people off in a way that just reading a text-based ad on display that comes across your social feed or something, just even [inaudible 00:11:46] was generated.

Evelyn Mitchell-Wolf (11:48):

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.

Rahul Chadha (12:05):

I think the fact that you mentioned, Marcus, that Super Bowl advertisers are probably not going to go all in on AI. I think it's a reflection of the fact that still need test and experiment phase for brands. Nobody wants to drop $8 million on an ad that's going to potentially upset a lot of people. They want to go with it as much tried and true methods, although there's always some risk taking probably from some brands in terms of their messaging or the tone of the creative.

Evelyn Mitchell-Wolf (12:32):

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.

Marcus Johnson (12:41):

A great point, and Rahul, to what you were saying, just because AI isn't on camera doesn't mean it's not behind it, which I think is a really important one. WPP is the agency 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 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.

(13:15):

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 assistants. And so if that's their experience with AI in that world, how hard is it going to be for them to feel differently about AI and 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 pass out, okay, this is good AI, this is bad AI, et cetera.

Evelyn Mitchell-Wolf (13:59):

Yeah.

Marcus Johnson (14:00):

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 are, it's the whatever Super Bowl, AI, crypto, that's often a sign that a bubble is about to burst.

Evelyn Mitchell-Wolf (14:25):

The crypto, ow.

Marcus Johnson (14:27):

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. Dellinger 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 the zone too much when it comes to this year's or any Super Bowl by that matter.

Evelyn Mitchell-Wolf (15:11):

Don't want to manifest their downfall here.

Marcus Johnson (15:13):

No. So next question I have, and this is from some research that our colleague Max Williams, 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 it 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 others' research that you've seen of the relationship between how much people notice ads versus how intrusive they find them?

Evelyn Mitchell-Wolf (15:51):

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 Rahul, 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. And 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 Johnson (17:04):

That's worse than it being too personal.

Evelyn Mitchell-Wolf (17:07):

Right, right.

Marcus Johnson (17:07):

And too targeted.

Evelyn Mitchell-Wolf (17:09):

For some people. That's not necessarily going to be, I personally would rather an annoying, interruptive experience just as long as I can remove it. 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, this is the thing about privacy and about targeted advertising is that it is all a game of personal preferences that advertisers 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 Johnson (18:00):

Yeah. So 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-roll 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.

(18:52):

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 of consumers say they feel ignored by marketers according to research by iHeart Media 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 Chadha (19:42):

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. Individuals are incredibly complex, nuanced people and if you get one thing wrong, you can just kind of become, I think invisible to that consumer. 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 of a consumer to dismiss this ad is not being targeted to them. It's incredibly difficult, I think to get all those variables right.

Marcus Johnson (20:19):

Yeah. Evelyn, how about for you? What was top of the list in terms of what marketers are getting wrong here?

Evelyn Mitchell-Wolf (20:26):

Well, I tried it in my thought exercise to understand the word ignored, because I found that to be a really interesting word choice. If brands were ignoring consumers, there wouldn't be ads plastered on every digital surface under the sun. 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.

(21:18):

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. 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 Chadha (22:01):

And I think too, 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, it just speaks to how it just incredibly difficult it is getting all these aspects of the online campaigns correct.

Marcus Johnson (22:19):

Yeah. Two big ones for 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. An iHeart Media study found that consumers seek approval and conduct research to make purchases of $100 or more, marketers make purchases exceeding $1,000 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 the minimum wage. It is hard when you have about half of people in Congress a 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's earning a lot less.

(23:29):

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 here with generation, certainly I mean, Evelyn, you pushing out earlier in the episode. So significant age matters in how you communicate with the 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 there are two important ones, but yeah, there's lots to consider there. It's really hard to get, Rahul, 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+ subscribers can head to emarketer.com as well. That's all you have time for this episode, thank you so much to both my guests. Thank you first to Evelyn.

Evelyn Mitchell-Wolf (24:26):

Thank you Marcus. Thanks everyone. Had a good time.

Marcus Johnson (24:28):

Thank you to, Rahul, great to see you, fella. I'm so glad you joined.

Rahul Chadha (24:32):

Thanks for having me, Marcus. Appreciate it.

Marcus Johnson (24:35):

Promise not to ignore you at the beginning. Thanks to the whole editing crew, Victoria, John, Lance and Danny, Stewart who runs the team, and Sophie who does our social media. And thanks to everyone for listening in. We hope to see you on Monday for Behind the Numbers, an EMARKETER video podcast made possible by Zeta Global.