Generative AI and User-Generated Content: Influences on Brand-Consumer Relationships and Purchase Intentions

Abstract

Recent advancements in generative artificial intelligence (genAI) applications have led to a growing body of research on organizational outcomes for companies that take advantage of these tools. Spending on AI in the retail sector and others has surpassed expert predictions, with expenditures on AI in marketing expected to reach $107.5 billion by 2028 (Ameen et al., 2021; Kshetri et al., 2024). As the use of AI in this field grows in popularity, especially among mid-level and junior marketers, marketing is predicted to be the firm function most heavily impacted by genAI (Cillo & Rubera, 2024; Kshetri et al., 2024). While the use of GenAI in marketing practices can be effective and efficient for organizations, research suggests this may come at a price (Bynder, 2024; Galloway & Swiatek, 2018; Xu et al., 2024). As AI becomes more advanced and AI and human-made content becomes less distinguishable, it is also more important than ever to study the impact of transparency on consumer-brand relationships. The purpose of this study is to examine the impact of genAI use in branded video content, specifically user-generated content, on brand-consumer relationship outcomes and customer buying intentions. The online survey experiment uses A/B testing-style procedures to analyze whether consumers react differently to brands that use AI than brands that do not, and the role of transparency in this relationship. The experiment found no significant impact of AI or disclosure on brand trust and satisfaction, but instead found that consumers could not easily distinguish between AI-generated and human-made content, emphasizing the importance of clear and transparent communications. This research is important because as genAI makes its way into video marketing content, it is critical to anticipate how consumers will react to it as it may potentially damage relationships with the brand.