AI-generated ads with human touch deliver higher engagement

Generative AI is quickly reshaping the way advertising creative is developed. According to a new report from Taboola, AI-generated ads that did not "look like AI" achieved the highest engagement of all groups, significantly outperforming both human-made ads and AI ads that were perceived as artificial.

The new study, titled "AI Ads That Work: How AI Creative Stacks Up Against Humans,” was conducted in collaboration with researchers at Columbia University, Harvard University, Technical University of Munich, and Carnegie Mellon University. The study utilised a quasi-experimental "sibling ads" approach, comparing matched pairs of AI-generated and human-made ads created by the same advertiser for the same campaign on the same day.

The study found that nearly half of AI-generated ads were perceived as human-made, as consumers often struggled to accurately identify whether an ad was created by AI or a human.

Interestingly, ads that were perceived to be AI-generated—regardless of their true origin—were penalised by users. This suggests that perceived artificiality, rather than actual authorship, plays the most significant role in determining ad engagement.

The report also found that one of the most important factors in making an ad feel "human" and trustworthy was the presence of a large, clear human face. Interestingly, based on Taboola’s best practices and policy restrictions, AI-generated ads were more likely to include these trust cues than their human-made counterparts.

In terms of performance, AI-generated ads matched or exceeded human-made ones. On average, AI ads achieved a slightly higher click-through rate (CTR) of 0.76%, compared to 0.65% for human-created ads. Even under rigorous statistical controls, AI ads performed on par with human ones.

AI-generated visuals increased or maintained click-through rates without reducing downstream conversion performance, proving that advertisers do not have to trade quality or conversions for production scale. Specific sectors; most notably, the food and drink and personal finance industries were early to adopt AI ads.

A key concern addressed by the research was whether AI-generated ads might increase low-quality or “curiosity” clicks. The data showed no evidence of reduced downstream conversion performance. AIgenerated creatives increased or maintained CTR without negatively impacting conversion rates, indicating that advertisers did not have to trade quality for scale. In other words, fears that AI-driven ads will underperform or drive irrelevant traffic are not supported by realworld evidence.

“Taboola’s platform provided us with a literal gold mine of real-world data that is simply unavailable in a lab setting. By analysing over 500 million impressions, we were able to move past the hype of GenAI and uncover its real impact in large scale settings,” said Oded Netzer, vice dean for research, Columbia Business School. “Our findings prove that when AI is used to enhance human cues—like the trust found in a human face—it doesn't just match human performance; it often sets a new ceiling for engagement.”

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