AI in Disguise—Quasi-Experimental Analysis of a Large-Scale Deployment of AI-Generated Ads

As Taboola prepared to launch its GenAI Ad Maker, a tool that lets advertisers create ad images within the platform, it faced a consequential question about whether AI-generated ad images would perform well with real consumers, and under what conditions. Working with Taboola, we construct a quasi-experimental comparison of 4,633 ‘sibling ads,’ meaning AI-generated and human-made images launched by the same advertisers, in identical campaign settings, at the same time. These ads span more than 369 million impressions and 2.5 million clicks. We do not find a detectable average click-through-rate disadvantage for AI-generated images relative to their human-made siblings. However, this average masks an important boundary condition: ads with AI-generated images outperform human-made ads when the AI images do not ‘look like AI.’ We identify key visual features influencing consumers’ perceptions of whether an ad looks AI-generated. While AI generates sharper, clearer, and less blurry images with larger faces, consumers associate these features with human-made ads. On the other hand, in line with consumers’ expectations, aesthetics, lower warmth, and intense color saturation in ads signal AI generation. These findings support Taboola’s roll-out communication, advertiser guidance, and continued refinement of the GenAI Ad Maker.