In AI, we do not trust! The nexus between awareness of falsity in AI-generated CSR ads and online brand engagement

Purpose Synthetic advertising, which involves creating or modifying ads through artificial intelligence (AI) technology, has recently transformed the field of media and advertising. Despite its emerging importance, our understanding of consumer perceptions in this context is limited. This study is one of the first to explore the impact of synthetic advertising on consumer behavior. Design/methodology/approach Across two between-subject experimental studies, using coffee shop customers in the USA, we tested how, why and when awareness of falsity in AI-generated corporate social responsibility (CSR) ads affects online brand engagement. Findings In Study 1, awareness of falsity in AI-generated CSR ads negatively impacts online brand engagement, with perceived sincerity mediating this relationship. Additionally, a higher level of CSR authenticity mitigates the negative effect of awareness of falsity on online brand engagement. CSR authenticity does not moderate the mediation effect of perceived sincerity in the relationship between awareness of falsity and online brand engagement. In Study 2, the relationship between awareness of falsity and online brand engagement is moderated by brand familiarity. Importantly, perceived sincerity only mediates this effect for unfamiliar brands, not familiar ones. Practical implications This study provides key insights for managers using AI to promote CSR initiatives. While AI can save time and budget, it may lead to negative consumer reactions due to perceptions of insincerity. To mitigate this, companies should focus on enhancing the authenticity of their CSR efforts and humanizing AI-generated ads. Additionally, established brands should be cautious of reduced consumer engagement with AI-generated content, while unfamiliar brands can benefit by emphasizing sincerity in their messaging. Originality/value This paper is one of the first studies that discuss how, why and when awareness of falsity in AI-generated corporate social responsibility ads affects online brand engagement.