Disclosing AI without losing consumers: When and how AI disclosure works in advertising

Extant research on AI disclosure examines its negative impact across various domains, but limited attention has been paid to why these effects occur and how they can be mitigated in advertising. To address this gap, we examine why consumers react negatively to AI disclosures in advertising, identify the boundary of this effect, and propose strategies to mitigate it. Across three studies, we show that AI disclosure reduces consumers’ attitudes toward the advertisement and purchase intentions through decreased perceived creativity. More importantly, we find that product type serves as a boundary condition for this effect, and that the negative influence of AI disclosure (vs. human designer disclosure) is attenuated when AI is identified as an employee. Implications for both theories and practices are discussed.