Transparency Disclosure Mechanisms for AI ‐Generated Advertising on Online Platforms: An Empirical Study of User Trust and Engagement

AI‐powered ads are revolutionizing digital marketing by generating content, tailoring targeting, and leveraging data analytics for more effective promotions on platforms like social media, search engines, and other digital channels. However, transparency, authenticity, and consumer trust issues have grown considerably. Many times, when consumers do not know that ad creation is supported by artificial intelligence technologies, they react negatively to the advertisements. This study explores consumer responses to AI‐generated ads and examines the extent to which transparency disclosure moderates consumer trust, the credibility of the advertisements, and purchase intention. To this end, the study adopts a scenario‐based (vignette) design embedded within an online survey, in which 300 digitally active consumers were randomly assigned to view an AI‐generated advertisement either with or without a transparency‐disclosure label. Relationships between the research variables were tested using regression and moderation analysis. The results show that transparency disclosure has positive effects in enhancing consumers' trust and credibility in the advertisements, especially in the presence of AI‐generated advertisements. The research adds to the growing body of knowledge in the field of ethics in AI advertising and offers actionable suggestions for marketers, online platforms, and policymakers to promote responsible AI advertising practices.