The researchers anchor their analysis in a striking natural experiment: the Coca-Cola Company, one of the world’s most recognizable advertisers, has produced two high-profile AI initiatives that met dramatically different fates. The first, the 2023 Create Real Magic platform, invited digital artists and fans to generate their own artwork using the company’s iconic logo through AI image generation. The platform was broadly embraced and enjoyed by consumers. The second, the company’s 2025 AI-generated “Holidays Are Coming” holiday commercial, was met with ridicule on social media and widespread customer criticism, with Forbes reporting on the backlash that erupted when the ad was released.

The difference between these two outcomes, Choi and Magee argue, lies in whether consumers can easily understand why the advertiser used AI in the first place. Create Real Magic offered something that would be difficult, if not impossible, to deliver without the technology: thousands of unique, personalized art pieces created by individual fans around the world. Producing that volume of bespoke creative work through human designers alone would have been impractical. In that context, AI was not a substitute for human creativity but an enabler of an experience that could not otherwise exist. Consumers, the researchers said, could readily grasp the purpose of the technology, and that transparency of purpose defused suspicion.

By contrast, the 2025 holiday commercial used AI to produce animation that human designers could plausibly have created themselves. When AI is deployed unnecessarily, the study finds, consumers can feel upset or unnerved, and in the case of the holiday ad those feelings spilled over into public ridicule. One YouTube commenter delivered a particularly cutting verdict, calling the spot “the most profitable commercial in Pepsi’s history” — a joke that cut to the heart of the problem, framing the ad as a self-inflicted wound. The researchers point to this reaction as evidence that audiences are not simply hostile to AI; they are hostile to AI that appears to replace human effort without offering anything new in return.

Part of the negative response, Magee explained, stems from a well-documented psychological phenomenon known as the uncanny valley effect, in which a machine or depiction that is almost, but not quite, human induces feelings of unease in observers. “We’re basically programmed to look at everything, whether humans or objects, and make snap judgments about them,” Magee said. “We make these quick decisions, but then our conscious mind reflects and thinks, ‘Machines do not feel, but this machine is telling me that it does.'” According to Magee, that is where the conflict originates: when something is almost human but not quite, the brain’s rapid social-cognitive machinery and its reflective reasoning pull in opposite directions, producing the discomfort that audiences experience as eeriness or distrust.

The uncanny valley becomes especially hazardous, the researchers said, when advertisers use AI to try to engender genuine emotion. A generated depiction of a hurt or hungry child, for example, can leave consumers feeling tricked, because the emotional appeal is being manufactured by a system that has no stake in the suffering it portrays. Magee emphasized that marketers need to be very careful to remind people that they are an organization of people, not just a brand and not just a company. “It’s easy to think of an organization as something impersonal, and to counteract that, you need to underline the human aspect,” he said. “For any organization, whether it’s for-profit or nonprofit, the problem comes when something they’ve created feels artificial or contrived. AI can be another instantiation of that disconnect.”

Even when the uncanny valley effect is not in play, the study identifies a second, more strategic pitfall: consumers can still perceive that marketers have taken a “shortcut” by using AI, substituting a cheaper production method for genuine creative effort. Choi describes the remedy as what the researchers call the AI-ad theme match. “A strong match is when AI is an important part of how the campaign works, like if the intention is to give each consumer a personal experience that would otherwise be impossible,” he said. “In that case, AI is not just a cheaper production tool; it’s an important part of the creative idea.” The distinction is subtle but consequential: when the technology is woven into the conceptual core of a campaign, its use feels purposeful; when it is bolted onto a conventional ad, it reads as cost-cutting at the audience’s expense.

This framework leads to practical guidance that Choi believes many marketers are currently ignoring. “Nowadays, many marketers are just saying, ‘Hey, why don’t we use AI?’ but I don’t recommend that,” he said. “Marketers should start with the campaign idea first, and ask ‘Is AI necessary?’ It’s a simple question. If the answer is yes, the reason why should be clearly understood.” In other words, the creative brief should precede the technology decision, not follow it. If AI is essential to delivering the campaign’s promise — personalization at scale, interactivity, or capabilities beyond human production — then its presence is justified and legible to consumers. If it is not, the study suggests, advertisers risk paying a reputational price for a tool that added nothing the audience values.

The researchers also caution against assuming that today’s consumer sensitivities are permanent. Magee noted that the extent to which people feel negatively about AI in advertising may shift as the technology becomes more widespread and familiar. “Right now, because AI is new, it’s better to err on the side of being careful,” he said. “But norms change. You don’t see as many people thinking about CGI in movies anymore. No one gets upset about it like they used to.” The trajectory of computer-generated imagery in film offers a useful analogy: a technique that once provoked complaints about authenticity gradually became an invisible, accepted part of visual storytelling as audiences learned its conventions and creators learned its limits. “Over time, the norms will probably change, and we’ll accept AI just like we accepted CGI, animation and other new technologies,” Magee said.

For an advertising industry racing to incorporate generative tools into everything from holiday spots to interactive platforms, the study’s central message is a tempering one. The technology’s power to create realistic depictions of just about anything does not mean advertisers should lean on it reflexively. Consumer reactions, the research suggests, hinge on a judgment audiences make quickly and intuitively: whether the machine was used to give them something genuinely new, or simply to do cheaply what a person could have done better. Advertisers who can answer that question convincingly — by matching AI to the intent and theme of the campaign — are far more likely to land on the side of Create Real Magic than on the side of a holiday commercial that handed its rival an accidental victory lap.

Subject of Research: Consumer reactions to AI-generated advertising and the match between AI use and ad campaign themes

Article Title: Study explores why some AI ads fail while others succeed

Article References: Study explores why some AI ads fail while others succeed. (n.d.). Original publication

Image Credits: AI Generated

DOI: Not provided

Keywords: artificial intelligence, advertising, consumer behavior, uncanny valley, Coca-Cola, marketing, Journal of Interactive Advertising, AI-generated ads, integrated marketing communications, CGI, brand backlash, University of Mississippi