The Luxury Dilemma: When AI-Generated Ads Miss the Mark

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To, R. N., Wu, Y. C., Kianian, P., & Zhang, Z. (2025). When AI Doesn’t Sell Prada: Why Using AI-Generated Advertisements Backfires for Luxury Brands. Journal of Advertising Research, 1–35. https://doi.org/10.1080/00218499.2025.2454120

Keywords: text-to-image generative AI; luxury brands; advertising; authenticity.

Dr. Rita To Headshot

  • CRediT Taxonomy:
    • Conceptualization, Data curation,  Formal analysis, Funding Acquisition, Investigation, Methodology, Validation, Visualization, Writing – original draft, Writing – review & editing
  • Google Scholar
  • Faculty Profile
Dr. Yi-Chia Wu Headshot

Introduction

Luxury brands have long been defined by their exclusivity, craftsmanship, and the artistry behind their products. But as technology evolves, a pressing question emerges: Can artificial intelligence (AI) help these brands maintain their prestige, or does it diminish their essence? This discussion isn’t hypothetical. Several luxury brands have already dabbled in AI-generated advertising, only to find that consumers aren’t as impressed as they’d hoped.

Research conducted across three experiments reveals a fascinating insight—when luxury brands use AI-generated images in advertisements and disclose that fact, consumer reactions tend to be negative. But why? The answer lies in how customers perceive effort, authenticity, and brand heritage.

AI and Luxury: A Mismatch in Perception

AI has revolutionized many industries, offering efficiency and innovation. In advertising, generative AI tools like Midjourney and DALL-E can create stunning visual content within seconds. Yet, when it comes to luxury branding, consumers hold these companies to a different standard.

Luxury isn’t just about aesthetics; it’s about craftsmanship, heritage, and the meticulous effort that goes into every product. When customers see an AI-generated ad, they may subconsciously feel that less human effort was involved. And because luxury brands thrive on the perception of exclusivity and artistry, this can be a problem.

For example, a recent AI-generated ad campaign from a high-end fashion house sparked debate. While the visuals were stunning, consumer sentiment on social media was divided. Some appreciated the innovation, while others questioned whether AI could ever replace the human touch associated with luxury craftsmanship.

The Experiment: What Consumers Really Think

To understand this phenomenon, researchers conducted three studies:

  1. Study One: Participants were shown luxury advertisements featuring AI-generated images. Some ads disclosed the use of AI, while others did not. Results showed that when AI-use was disclosed, consumers viewed the brand less favorably.
  2. Study Two: Digging deeper, researchers found that the negative perception stemmed from the belief that AI ads require less effort, making them feel inauthentic.
  3. Study Three: There’s a silver lining. When AI-generated ads displayed highly creative and unique visuals—beyond what traditional methods might achieve—the negative effect was significantly reduced. In other words, if brands use AI to create something truly original rather than just mimicking traditional campaigns, they can still win over consumers.

What This Means for Luxury Brands

This research has important implications for high-end brands considering AI in their marketing strategies. Here are some key takeaways:

  • AI Can Enhance, But Not Replace Human Craftsmanship – Instead of relying solely on AI, luxury brands should use it as a tool to augment creativity while ensuring human craftsmanship remains at the forefront.
  • Disclose AI Use Strategically – If a brand must disclose AI use in advertisements (which is now required by law in some regions), it should be done in a way that highlights innovation rather than diminishing human effort.
  • Creativity is Key – If AI is used to generate something groundbreaking and unique—something that traditional methods wouldn’t easily achieve—consumer skepticism may be mitigated.

Conclusion: Striking the Right Balance

AI is here to stay, and its role in marketing will only grow. However, luxury brands must tread carefully. The essence of luxury lies in human touch, meticulous detail, and a storied history. AI-generated ads, if not carefully executed, can undermine these values.

For luxury brands to successfully integrate AI into their marketing, they must ensure that the technology serves to enhance creativity rather than replace the craftsmanship that defines their brand. Used wisely, AI can be a powerful tool for storytelling and innovation—just not at the expense of authenticity.

Final Thought

The lesson here isn’t that AI is bad for luxury marketing—it’s that its use must align with consumer expectations. If luxury brands can master this balance, they can leverage AI’s potential without losing the trust and admiration of their customers. The future of AI in luxury branding depends not just on what technology can do, but on how it is perceived.vely. Future research should continue refining AI trust models to ensure these systems remain beneficial and responsible.

Alignment with U.N. Sustainable Development Goals

The research paper “When AI Undermines Luxury: The Adverse Impact of AI-Generated Advertisements on Luxury Brand Perceptions” aligns with the following U.N. Sustainable Development Goals (SDGs) prioritized in the Dr. Sam Pack College of Business (DSPCOB) strategic plan.

Goal 8: Decent Work and Economic Growth

  • Examines AI’s influence on employment within the luxury branding industry, identifying challenges and opportunities.
  • Highlights the importance of strategic AI implementation to complement, rather than replace, human creativity.
  • Advocates for an AI-driven environment where job quality is enhanced, mitigating risks like job displacement and reduced craftsmanship.

Goal 9: Industry, Innovation, and Infrastructure

  • Investigates AI’s role in marketing innovation, emphasizing responsible implementation in luxury branding.
  • Identifies ways luxury brands can integrate AI without compromising perceived effort, authenticity, and exclusivity.
  • Supports sustainable industrialization by promoting AI as a tool for innovation rather than a replacement for human expertise.

This research contributes to Basic or Discovery Scholarship, expanding theoretical knowledge on AI’s impact on brand perception while providing a roadmap for ethical and responsible AI adoption in luxury marketing.

Quality Indicators:

  • ABDC Ranking: A
  • JCR Impact Factor: 2.1
  • Google Scholar h-5 Score: NA
  • SciMago h-f Score: NA
  • ABS: NA
  • Acceptance Rate (as reported in Cabell’s): 13%
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    • EBSCO: No
    • JIF: No
    • SCIMago: No
    • ERIC: No
    • Westlaw: No
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    • Ulrich’s: No