New IAB Research Shows Disconnect Between Advertiser Optimism and Consumer Sentiment Towards AI-Generated Ads
The Interactive Advertising Bureau (IAB), the leading trade association for the digital advertising industry, today launched its first-ever AI Transparency and Disclosure Framework, an industry framework for AI disclosure that balances transparency with operational efficiency, helping brands, agencies, publishers, and platforms navigate responsible AI use in advertising.
As the use of generative-AI in marketing accelerates, the Framework is designed to build consumer trust, reduce regulatory risk, and establish industry leadership in responsible AI adoption.
“The digital industry is embracing AI in all of its splendor at breathtaking speed. We are certainly at a critical inflection point with generative AI,” said David Cohen, CEO, IAB. “While AI is transforming how we work from ideation to execution and measurement, we must get transparency and disclosure right, or we risk losing the trust that underpins the entire value exchange. We’re giving the ecosystem tools it needs to drive responsible innovation.”
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Framework Provides Functional, Flexible Approach to AI TransparencyThe AI Transparency and Disclosure Framework introduces a risk-based model that avoids blanket labeling and instead calls for disclosure only when AI materially affects the authenticity, identity, or representation in ways that may mislead consumers.
Instead of disclosing every instance of AI, the Framework calls for advertisers to disclose consumer-facing labels around synthetic humans, digital twins, images, videos, audio, and AI chatbots in ads including:
Images or videos generated by prompt (text-to-image or image-to-image generation), where human input is limited to refinement, editing, or compositing to depict real-world events
AI-generated voices of deceased persons creating new statements they never actually made, even with estate authorization
AI-generated voices of living persons making statements about specific events, actions, commitments, or circumstances that never occurred, as distinct from scripted commercial endorsements or brand messaging
Digital twins of deceased individuals in any capacity, even with estate authorization
Digital twins of living individuals depicted in specific events, scenarios, or locations that never occurred, as distinct from standard product endorsements or brand representation
Synthetic avatars, AI chatbots or conversational agents in ads that simulate human interaction
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To achieve this, the Framework introduces a risk-based, two-layer disclosure model:
Consumer-facing disclosures, with standardized text labels or visual cues like visual indicators (watermarks, badges, or standardized icons), interactive elements (tap/hover information icons), and adjacent placement (disclosure placed next to rather than on the creative asset)
Machine-readable metadata (C2PA protocols) for technical compliance, combined with advertiser-led decisions on consumer-facing disclosure
“AI is reshaping how advertising is created and scaled, but trust is what will determine its longevity,” said Caroline Giegerich, VP, AI, IAB. “Our research reflects a clear misperception between how advertisers think consumers feel about AI-generated advertising and how consumers actually experience it. That disconnect is exactly why materially-based disclosure matters. This Framework gives the industry a clear answer to ‘does AI involvement risk misleading consumers?’ by focusing on consumer impact. It’s about building credibility through transparency, not creating disclosure fatigue through universal labeling.”
Study Reveals Widening Trust Gap, But Disclosure Helps Close ItIn conjunction with the Framework, IAB unveiled new proprietary research with Sonata Insights, titled “The AI Ad Gap Widens: Consumer Skepticism Persists as AI Advertising Expands—But Disclosure Can Close the Gap,” that addresses the misperception of AI-generated ads, revealing stark differences between industry optimism and consumer attitudes.
According to the research, 82% of advertising executives believe Gen Z and Millennial consumers feel positively about AI-generated ads, however only 45% of these consumers actually feel that way. This gap has widened since IAB and Sonata Insights’ 2024 study from 32 points in 2024 to 37 points in 2026.
While the findings indicate misalignment between advertiser and consumer sentiment, they provide brands an opportunity to inform consumers on how AI is used, and to evaluate when and how disclosure can support trust and understanding.
Additional key insights include:
Gen Z consumers are nearly twice as likely as Millennials to feel negatively toward AI ads (39% vs. 20%) as the majority of Gen Z describe AI-using brands as inauthentic, disconnected, or unethical.
Consumers are more likely than advertisers to describe brands using AI as “manipulative” (20% of consumers vs. 10% of ad executives) or “unethical” (16% of consumers vs. 7% of ad executives), while advertisers associate AI use with “innovation” (46%) and “uniqueness” (44%) — highlighting major perception gaps.
More than half of respondents want brands to disclose if an ad was 100% AI-generated or uses AI imagery or video.
73% of Gen Z and Millennials say clear disclosure would either increase or have no impact on their likelihood to purchase the product or service — making transparency a trust builder, not a deterrent.
“There is a growing gap between advertisers’ use of AI and consumer skepticism,” said Jack Koch, SVP, Research & Insights, IAB. “This research shows that disclosure can play a decisive role in strengthening consumer relationships and determining whether AI use in advertising becomes a long-term value driver or a short-term liability. It also emphasizes that transparency and creative quality are essential to earning trust, shifting perceptions, and driving performance.”
IAB Urges Industry for Responsible AI UsageAs regulatory momentum builds globally, from the EU AI Act to new U.S. state laws and platform-specific disclosure requirements, adoption of the Framework is strategically advantageous for organizations. Those that adopt signal leadership, trustworthiness, and regulatory readiness while future-proofing their business operations.
IAB invites advertisers, agencies, publishers, and technology partners to publicly commit to the principles of transparency, proportionality, consistency, and clarity in AI disclosure.
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