Experience Stern | Faculty & Research

Overview: In the paper titled, “The Impact of Visual Generative AI on Advertising Effectiveness,” NYU Stern Professor Anindya Ghose, PhD student Hyesoo Lee, and co-authors Vilma Todri and Panagiotis Adamopoulos (both Emory University) investigated the effectiveness of visual advertisements that were either (1) human expert-crafted, (2) human expert-crafted and then modified by generative AI (genAI), or (3) fully AI-generated.

Why study this now: Global digital advertising spend reached nearly $470 billion dollars in 2024. At the same time, visual genAI systems have completely transformed how people can edit and create images and other visual content with minimal effort. Given the enormous and rapid investment in this area of marketing, an important question arises: should AI create ads end-to-end, or merely assist human designs?

What the researchers found: Studying those three methods of creating visual ads across experiments, the researchers discovered significant findings, including:

• Ads created entirely by genAI performed the best, increasing click-through rates by up to 19% compared to ads made by human experts
• Using genAI to modify human-made ads showed no significant improvement in performance, and that forcing AI to work within an existing design limited its effectiveness
• Telling consumers that an ad was made using genAI greatly reduced its effectiveness, causing a 31.5% decrease in click-through rates

What does this change: This research provides novel insights for both marketers and policymakers. For marketers, visual genAI can be used as a primary creator, versus a polishing tool. For policymakers, this study shows that AI disclosure could have a negative impact on businesses that go along with the intended ad transparency goal. 

Key insight: “This research provides systematic evidence on the impact of visual genAI in advertising, offering practical guidance on how to deploy it to shape marketing outcomes,” said Professor Ghose. “This study’s finding, that visual GenAI–created ads outperform both human and AI-modified benchmarks, reframes how we should view creativity itself. At the same time, businesses should carefully consider how and when to disclose AI involvement in their creative processes, balancing regulatory compliance with strategic communication goals.”