Creative AI visualization: Person with VR headset surrounded by cosmic clouds symbolizing the creative power of generative AI in advertising

Visual AI in Advertising: 19% More Clicks with GenAI-Generated Ads

Scientific study reveals when Visual GenAI outperforms and when it doesn't

A groundbreaking study by researchers from NYU Stern and Emory University provides the first empirical evidence: fully AI-generated advertisements significantly outperform human-created creations. However, the results also reveal surprising limitations and a critical dilemma regarding AI disclosure that is particularly relevant for European companies under the EU AI Act.

Key Findings at a Glance

The study "The Impact of Visual Generative AI on Advertising Effectiveness" by Lee, Todri, Adamopoulos, and Ghose (2025) examined three approaches: human-created ads, AI-modified ads, and fully AI-generated ads. The results have far-reaching implications for your marketing strategy.

+19%
CTR increase with AI-generated ads
-31.5%
CTR decrease with AI disclosure
0%
Improvement through AI modification
90%
of marketers already use GenAI
"Visual genAI delivers greater value when used for holistic ad creation rather than for modification, where creative constraints may limit its effectiveness."

Research Design: How the Study Was Conducted

The researchers combined laboratory experiments with an extensive field study on Google Ads to examine both the psychological mechanisms and real-world market performance. The data comes from an international beauty retailer with actual campaign data.

Methodological Approach

  • Laboratory experiment: 685 participants at two US universities evaluated purchase intention and ad effectiveness
  • Field study: 4 months on Google Display Network with 105,999 impressions and 4,026 clicks
  • Three ad types: Human-created, AI-modified (5 variants), AI-generated (4 variants)
  • Visual GenAI tools: Stable Diffusion, Midjourney, and DALL-E compared

Finding 1: Creation Beats Modification

The most surprising result of the study: AI-modified ads bring no improvement over human-created ads. On the contrary, they perform even worse. Only when AI creates entirely new ads from scratch does its superiority become apparent.

-0.47
Purchase intention with AI modification (7-point scale)
+0.38
Purchase intention with AI creation (7-point scale)
+0.18
Additional effect with AI packaging design

The reason lies in the concept of output constraints : when modifying, AI must work within predefined visual boundaries. These limitations restrict its creative capacity. With complete new creation, AI can fully exploit its generative potential.

"GenAI-modified ads show no significant improvement over human-created benchmarks. These results reveal an asymmetry: visual genAI delivers greater value when used for holistic ad creation."

Finding 2: Why AI-Generated Ads Work Better

The researchers identified three main mechanisms that explain the superiority of AI-generated ads. These insights help you understand how to optimally deploy Visual GenAI.

Emotional Engagement

AI-generated ads produce significantly stronger emotional responses (β = 0.23). They create coherent visual compositions that emotionally engage viewers and enhance both informative and persuasive effects.

Visual Processing Fluency

AI-generated ads achieve higher aesthetic quality (β = 0.13) and more balanced product-background relationships. This reduces cognitive load and facilitates information processing.

Ecological Validity

AI-modified ads lose ecological validity (β = -0.52), appearing less authentic. AI-generated ads avoid this problem as they emerge as a coherent unit.

Interestingly, both AI approaches show similarly high values for perceived novelty . The difference lies not in originality but in the appropriateness of the creative execution.

Finding 3: The AI Disclosure Dilemma

Perhaps the most critical finding for European companies: disclosing AI use drastically reduces advertising effectiveness. This directly conflicts with the transparency requirements of the EU AI Act.

-31.5%
CTR decrease with AI disclosure in field study
2.56%
CTR after disclosure (vs. 3.73% baseline)
-5.2
Effectiveness decrease in lab experiment (100-point scale)

Regulatory Context

  • EU AI Act (Article 50): Mandates disclosure of AI-generated or manipulated content
  • US Executive Order: Calls for effective labeling and provenance mechanisms for AI content
  • Trade-off: Compliance vs. performance requires strategic consideration
  • Recommendation: Develop flexible disclosure strategies that balance transparency and effectiveness

Implications for the European Market

For European companies, this study presents particular challenges and opportunities. The EU AI Act, GDPR, and traditionally high quality expectations of European consumers require a differentiated approach.

$469.8B
Global digital ad spending 2024
37% → 90%
GenAI adoption in marketing (2023-2024)
45%
use Visual GenAI for social media & web

Regulatory Requirements

EU AI Act Compliance for Advertising

  • Article 50: Disclosure requirement for AI-generated image, audio, and video content
  • GDPR compliance: Data protection in AI training and personalization
  • Consumer rights: Ensure transparency about AI use in advertising
  • Documentation: Guarantee traceability of AI usage

Opportunities for European Companies

Efficiency Gains

SMEs in particular can create professional advertising materials through Visual GenAI without expensive agencies. The study shows: AI-generated ads are not only cheaper but also more effective.

Scalability

A/B testing with numerous variants becomes practical. European companies can test more ad variants and optimize based on data.

Quality Leadership

The combination of AI creation and human fine-tuning aligns with European quality standards. GenAI for ideation, experts for finalization.

Compliance Advantage

Early development of disclosure strategies can become a competitive advantage when competitors must catch up later.

"For European companies, this means: deploy Visual GenAI strategically in the early creative phase, use human expertise for compliance and fine-tuning."

Challenges for the European Market

The disclosure problem hits European companies particularly hard, as the EU AI Act imposes strict transparency requirements. At the same time, European consumers are traditionally more skeptical of AI-generated content.

Success Factors for European Companies

  • Hybrid workflows: AI for creation, humans for modification and compliance
  • Transparent communication: Develop proactive disclosure strategies
  • Quality control: Human review of all AI-generated content
  • Data protection: Establish GDPR-compliant AI tools and processes

The study clearly shows: the key is not to avoid AI but to deploy it strategically. European companies that establish the right processes now will benefit in the long term.

Practical Implementation: How to Optimally Use Visual GenAI

Based on the study results, clear recommendations can be derived. The key lies in the right division of labor between AI and human expertise.

Phase 1: Ideation with GenAI

Use Visual GenAI in the early creative phase to quickly generate many ad concepts. Let AI create completely new designs rather than modifying existing ones. Test different prompts and styles to explore the range of possibilities.

Phase 2: Selection and Optimization

Have marketing experts select the best AI-generated concepts. Conduct A/B tests to identify the most effective variants. The study shows: even AI-generated ads benefit from professional pre-selection.

Phase 3: Human Finalization

Leave final adjustments to human experts. Logo placement, brand consistency, and last refinements require the contextual understanding and aesthetic judgment that humans excel at.

Best Practices from the Study

  • Prefer complete new creation: Let GenAI create entire ads, not just modify parts
  • Include product packaging: AI-generated packaging designs additionally enhance the positive effect
  • Test multiple tools: Stable Diffusion, Midjourney, and DALL-E deliver different results
  • Plan disclosure strategically: Develop communication strategies that balance transparency and effectiveness

Text AI vs. Visual AI: Different Strengths

A fascinating result of the study: Visual GenAI behaves fundamentally differently from text AI (LLMs). While LLMs perform better at editing existing texts, it's exactly the opposite for visual AI.

Text AI (LLMs)

Better at editing and refining existing texts. Grammatical and semantic rules structure the output. Chain-of-thought prompting improves results.

Visual GenAI

Better at complete new creation. No rigid rules, but free combination of visual dimensions. Higher creative freedom leads to better results.

Implication for Ad Copy

Use LLMs as a "sounding board" for feedback and refinement of your texts. Let them optimize existing copy rather than write completely new ones.

Implication for Visuals

Use Visual GenAI to create completely new ad images. Avoid only modifying existing designs.

"While textual genAI benefits from inherent linguistic constraints, visual genAI must learn implicit associations between form, context, and meaning, introducing both creative flexibility and potential reliability challenges."

Limitations and Outlook

Like any scientific study, this one has its limitations. For practical application, it's important to know these and interpret the results accordingly.

Industry Focus

The study focuses on beauty products. Results could vary in other industries like fashion, electronics, or services. Further research is needed.

Technological Development

GenAI is evolving rapidly. The results reflect the state of 2024/2025. Future models might perform better at modifications too.

Cultural Differences

The study was primarily conducted in the US. European consumers might react differently to AI-generated advertising.

Long-term Effects

The study measures short-term effects (CTR, purchase intention). Long-term impacts on brand perception and customer loyalty were not examined.

Conclusion: Using Visual GenAI Correctly

The study provides clear evidence: Visual GenAI can significantly increase advertising effectiveness, but only if you use it correctly. The key lies in complete new creation, not modification of existing ads.

Key Takeaways

  • Creation over modification: AI-generated ads outperform human ones by 19% CTR, AI-modified bring no improvement
  • Consider disclosure dilemma: AI disclosure reduces effectiveness by 31.5%, but EU AI Act requires transparency
  • Establish hybrid workflows: GenAI for ideation, humans for finalization and compliance
  • Understand mechanisms: Emotional engagement, visual fluency, and ecological validity drive success

For European companies, this means: now is the right time to strategically integrate Visual GenAI into your marketing processes. The technology is mature, the benefits are measurable, and those who establish the right workflows early will benefit long-term. At the same time, the regulatory framework of the EU AI Act requires a thoughtful disclosure strategy that balances transparency and effectiveness.

Further Reading

Frequently Asked Questions

How much more effective are AI-generated ads compared to human-created ones? +
According to the study by Lee et al. (2025), fully AI-generated advertisements achieve a 19% higher click-through rate than human-created ads. This corresponds to an increase from 3.73% to 4.44% CTR in the field study with Google Ads. It's important that AI creates the ads completely new rather than just modifying existing ones.
Why doesn't AI modification of existing ads work as well as creating new ones? +
The study shows that AI-modified ads bring no significant improvement over human-created ads. The reason lies in output constraints: when modifying, AI must work within predefined visual boundaries, which limits its creative capacity. Additionally, modified ads lose ecological validity, appearing less authentic and coherent.
What impact does disclosing AI use have on advertising effectiveness? +
Disclosing that an ad was AI-generated significantly reduces advertising effectiveness. The field study shows a 31.5% decrease in click-through rate (from 3.73% to 2.56%). This is particularly relevant given the EU AI Act, which mandates transparency requirements for AI-generated content. Companies must therefore develop strategies that balance compliance and effectiveness.
In which phase of the advertising process should Visual GenAI be used? +
Visual GenAI should primarily be used in the early creative phase to generate new ad concepts and mock-ups. For later modifications and fine-tuning, human experts are better suited. This division of labor maximizes the strengths of both approaches: AI for fast, creative ideation and humans for contextual adaptation and quality control.
What mechanisms explain the higher effectiveness of AI-generated ads? +
Three main mechanisms explain the superiority: 1) Stronger emotional engagement through coherent visual compositions, 2) Higher visual processing fluency through balanced product-background relationships, and 3) Better aesthetic quality. AI-generated ads achieve higher values in color contrast and visual balance, which facilitates cognitive processing.