Revealing the Machine Behind the Message

As artificial intelligence becomes increasingly embedded in advertising workflows, particularly through the advancement of generative tools, questions arise about how consumers perceive and respond to AI generated advertisements, especially when AI involvement is disclosed. While legislative efforts, such as the EU AI Act and California AI Transparency Act, aim to enhance transparency, limited empirical evidence exists on how consumers interpret such disclosures and how this affects decision-making. Existing research on advertising disclosures presents inconsistent findings, with some studies suggesting transparency builds trust, while others report it can induce skepticism. This study addresses this gap by investigating how different AI disclosure formats (explicit, implicit, none) affect consumer decision making, and how these effects are moderated by consumers' pre-existing attitudes toward AI. The research is grounded in the Persuasion Knowledge Model (PKM), which posits that consumers activate their persuasion knowledge when they recognize persuasive intent, potentially influencing their responses. To explore these dynamics, a quantitative between-subjects experiment (N = 138) was conducted utilizing a fictional AI-generated shampoo advertisement that was disclosed in three distinct formats. Brand trust served as a mediator, while consumers' general attitude toward AI functioned as a moderator, employing validated scales. The results revealed that AI disclosure, whether explicit or implicit, did not significantly influence purchase intention or brand trust. However, a mediation analysis demonstrated that brand trust significantly mediated the relationship between AI disclosure and purchase intention, suggesting that trust acts as a key determinant of consumers' behavioral intentions in this context. Moreover, attitude toward AI did not significantly moderate this relationship, indicating that general attitudes toward AI may be too broad to capture the nuances of the perception of AI in advertising. These findings offer both theoretical and practical implications. Theoretically, this study extends the PKM to AI-generated content and highlights the central role of brand trust in persuasive digital advertising. Practically, the results indicate that advertisers can integrate AI into their workflows without risking consumer backlash, provided that trust is maintained. For policymakers, the findings underscore the need for clearer regulatory frameworks on AI disclosure.