LLM-Generated Ads: From Personalization Parity to Persuasion Superiority

As large language models (LLMs) become increasingly capable of generating persuasive content, understanding their effectiveness across different advertising strategies becomes critical. This paper presents a two-part investigation examining LLM-generated advertising through complementary lenses: (1) personality-based and (2) psychological persuasion principles. In our first study (n=400), we tested whether LLMs could generate personalized advertisements tailored to specific personality traits (openness and neuroticism) and how their performance compared to human experts. Results showed that LLM-generated ads achieved statistical parity with human-written ads (51.1% vs. 48.9%, p > 0.05), with no significant performance differences for matched personalities. Building on these insights, our second study (n=800) shifted focus from individual personalization to universal persuasion, testing LLM performance across four foundational psychological principles: authority, consensus, cognition, and scarcity. AI-generated ads significantly outperformed human-created content, achieving a 59.1% preference rate (vs. 40.9%, p < 0.001), with the strongest performance in authority (63.0%) and consensus (62.5%) appeals. Qualitative analysis revealed AI's advantage stems from crafting more sophisticated, aspirational messages and achieving superior visual-narrative coherence. Critically, this quality advantage proved robust: even after applying a 21.2 percentage point detection penalty when participants correctly identified AI-origin, AI ads still outperformed human ads, and 29.4% of participants chose AI content despite knowing its origin. These findings demonstrate LLMs' evolution from parity in personalization to superiority in persuasive storytelling, with significant implications for advertising practice given LLMs' near-zero marginal cost and time requirements compared to human experts.