Technology is changing how brands connect with their customers. Two innovations stand out: Generative AI (GenAI) and Augmented Reality (AR). Together, they’re creating new ways for marketers to tell stories and engage audiences.
Takeaways 🚀
✅GenAI and AR boost engagement.
✅Transparency builds trust in AI.
✅Immersive formats outperform static ads.
✅AI enhances, not replaces creativity.
✅Personalized experiences drive consumer interest.
To understand this shift better, three companies—PMG, eye square, and Snap—joined forces. They wanted to learn how consumers view GenAI experiences, what this means for brands, and what works best in practice.
A Comprehensive Look at GenAI in Marketing
The research team studied more than 14,800 people aged 13-44 across seven countries: Australia, Canada, France, Germany, Saudi Arabia, the UK, and the US. They also spoke with 150 marketing professionals to get the industry perspective.
The findings reveal something important: most people have already used AI and liked the results. This acceptance creates opportunities for marketers, with three out of four wanting to use GenAI more in their work.
Why GenAI and AR Work Better Together
The study found that combining GenAI video with AR experiences creates a powerful mix for brand storytelling. These formats consistently beat static ads across key measures like attention, recognition, and engagement.
Capturing and Keeping Attention
GenAI-powered AR filters and video ads excel at grabbing attention. Most users spend extended time interacting with AR filters. Compared to static ads, GenAI video ads and AR filters show much higher rates of people watching for at least two seconds.
This attention translates into real engagement. People see these ads as more unique and entertaining than traditional static content. The study participants found GenAI assets led to better brand perceptions, with companies appearing more premium and innovative.
Building Brand Connection
The impact goes beyond just looking good. These engaging formats create comprehensive brand benefits, from awareness to purchase intent. They all perform better than static alternatives.
The formats also spark curiosity and word-of-mouth marketing. Users show significant increases in wanting more product information, visiting brand websites, talking about brands, and recommending them to others.
The Trust Factor: Why Transparency Matters
One crucial finding centers on transparency. Both consumers and marketers stress the need for clear disclosure when AI is involved in advertising.
Consumers are much more likely to accept AI use in ads when brands are upfront about it. Most social media users believe GenAI content should be clearly marked as such.
Generational Differences
The impact of disclosure varies by age group. In the US, Millennials tend to view AI-powered video ads more positively after learning about AI involvement. Gen Z reacts more negatively to the same information.
However, GenAI AR filters help reduce negative reactions and even increase people’s confidence in recognizing future GenAI ads. This effect is particularly strong among Millennials, who report feeling more positive about GenAI AR experiences.
GenAI as Enhancement, Not Replacement
Despite widespread adoption, marketers largely view GenAI as a tool to enhance human creativity, not replace it. While 87% of marketers find GenAI tools effective at improving performance, and 68% believe GenAI will replace traditional content creation methods, there’s still strong desire for human involvement and control.
This preference for human oversight likely stems from existing concerns. Marketers worry about misinformation, lack of accountability, over-reliance on AI reducing human interaction, and data misuse or leakage.
In advertising specifically, professionals are concerned about false advertising, difficulty distinguishing real ads from fake ones, ethical issues in the creative process, and GenAI’s limited ability to match human creativity and nuance.
Carly Carson, Head of Integrated Media at PMG, explains their philosophy: “At PMG, we believe technology should serve humanity. As we embrace the potential of Generative AI, transparency is not just a principle, it is a responsibility. We are focused on using AI to enhance human connection, not replace it, and that begins with making its role visible, understandable, and accountable.”
What Consumers Accept in AI-Generated Ads
The research shows consumers feel comfortable with brands using AI to generate various ad elements, including images, video content, music, and dialogue. However, acceptance levels vary significantly.
People are most comfortable with AI-generated products, objects, environments, and backgrounds, followed by animals. Human depictions receive less acceptance. Similarly, animation-style ads are more welcomed than photorealistic ones.
This suggests marketers should use caution when GenAI might depict human elements in their advertising. The uncanny valley effect—where almost-human representations feel unsettling—appears to apply to advertising as well.
Beyond Creative: Personalized AI Experiences
GenAI’s potential extends beyond creative development. Consumers highly value personalized AI experiences, with top interests including AI-generated product recommendations, AI-powered chatbots, and virtual try-on experiences.
This demand suggests marketers should experiment with GenAI not just for content creation, but for any way it can enhance customer experiences throughout the buyer journey.
Best Practices for Brands
The research reveals several key strategies for brands looking to leverage GenAI and AR effectively:
Use Immersive Formats for Maximum Impact
AR filters and GenAI-powered video ads effectively capture attention, drive positive brand perceptions, and foster emotional connections. These formats consistently outperform static alternatives across multiple metrics.
Build Trust Through Positive Disclosure
Transparency around AI usage is crucial for building trust. Rather than hiding AI involvement, brands should position themselves as innovative leaders by highlighting the collaboration between AI and human creativity. This approach can actually enhance brand perception when done correctly.
Treat GenAI as a Creative Enhancer
Integrate GenAI to augment human creativity and productivity, particularly for tasks that benefit from brainstorming or rapid iteration. However, maintaining a human touch in the final creative output remains key to preserving authenticity and building trust with consumers.
Focus on Visual Storytelling
Leverage GenAI to enhance specific ad elements like visuals, music, or dialogue. This approach works especially well in animation-style visuals, where consumer acceptance is highest. Avoid over-reliance on AI for human depictions, which can create discomfort.
The Future of AI-Powered Marketing
The partnership between PMG, eye square, and Snap demonstrates how collaboration between agencies, research firms, and platforms can drive industry understanding forward. Their comprehensive approach—combining quantitative consumer surveys, qualitative expert interviews, and controlled testing—provides valuable insights for the entire marketing community.
As GenAI technology continues advancing, brands that embrace transparency, maintain human oversight, and focus on enhancing rather than replacing human creativity will likely find the greatest success. The key lies in understanding that consumers want authentic connections, even when technology enables those connections.
Taking Action: Next Steps for Marketers
The research provides clear direction for brands ready to explore GenAI and AR marketing:
Start with transparency as your foundation. Build disclosure into your AI strategy from the beginning, positioning it as innovation rather than trying to hide it.
Experiment with immersive formats, particularly AR filters and GenAI video content, which show consistent performance advantages over static alternatives.
Focus on enhancing existing creative processes rather than replacing human creativity entirely. Use AI for ideation, rapid iteration, and specific elements like backgrounds or objects while maintaining human oversight for strategy and final execution.
Consider the full customer experience, not just advertising. Explore AI-powered recommendations, chatbots, and virtual try-on experiences that add genuine value for consumers.
The marketing power of GenAI and AR lies not in replacing human creativity, but in amplifying it. Brands that understand this distinction—and communicate it clearly to their audiences—will build stronger connections and drive better results in an AI-powered future.
