Why AI Marketing Tools Are Creating Worse Ads Than Human Creativity – News Round Up: 09/19-09/26

by Jeff Licciardi

AI Marketing Tools Are Making Ads Worse—And The Data Proves It – News Round Up: 09/19-09/26

The marketing industry has spent the past two years breathlessly hyping artificial intelligence as the future of advertising. But here’s what nobody wants to admit: most AI-generated ads are worse than what humans were creating five years ago. This week’s news reveals a critical pattern—marketers are warming to AI tools while simultaneously struggling with creative output, legal risks, and the uncomfortable reality that automation doesn’t equal innovation.

According to Digiday’s latest research, while marketers are increasingly adopting AI tools, creative challenges and legal risks continue to dominate concerns. Meanwhile, Ad Age reports that actual ROI from AI advertising remains concentrated in narrow use cases—primarily media buying optimization and audience targeting, not creative development. The disconnect is glaring: we’re implementing AI everywhere except where it might actually improve the end product consumers see.

The Creative Quality Crisis Nobody’s Talking About

Here’s the uncomfortable truth: AI excels at efficiency, not effectiveness. The rush to automate creative production has resulted in a homogenization crisis across digital advertising. When OpenAI shifted from “hatred to hiring” in its approach to advertising, it signaled a fundamental change in how tech platforms view the ad industry—as a revenue source, not a creative partner.

The problem isn’t that AI can’t generate ads. It’s that it generates ads that look and feel like everything else. Pattern recognition—AI’s core strength—becomes its creative weakness. The tool learns from existing successful ads and replicates their structures, resulting in an echo chamber of similar messaging, identical visual styles, and predictable hooks. Human creativity thrives on breaking patterns, not reinforcing them.

Google’s new AI Mode ad launch exemplifies this trend. While the technology promises to streamline ad creation, brands should understand what they’re actually getting: algorithmically optimized mediocrity that performs adequately in testing but fails to build lasting brand equity.

Where AI Actually Delivers (And Where It Doesn’t)

Let’s be clear: AI isn’t useless in advertising. Ad Age’s analysis of AI in ad tech and agencies shows genuine value in operational areas—programmatic optimization, audience segmentation, performance prediction, and media mix modeling. These backend applications genuinely improve efficiency and can reduce waste.

But there’s a massive gap between optimizing ad delivery and creating compelling ad content. The industry keeps conflating these two different problems. Elon Musk’s recent outline of an AI-led Grok future for advertising on X focuses almost entirely on targeting and placement, not on whether the ads themselves will be more persuasive or memorable.

The real ROI in AI advertising comes from reducing production costs and increasing testing velocity—not from creating better creative work. That’s fine, but we should stop pretending otherwise. A mediocre ad delivered to the right person at the right time will outperform a great ad delivered poorly, but that doesn’t make it a great ad.

The Retail Media Reality Check

This same efficiency-over-effectiveness pattern is playing out in retail media networks. Retail media’s mid-2025 reality shows advertisers going all-in on full-funnel strategies, but the creative within these campaigns remains largely transactional and uninspired.

The brutal truth? The easy dollars are gone from retail media. As these networks mature, they’re facing the same challenge as AI tools—how to move beyond performance marketing efficiency toward building actual brand value. The answer isn’t more automation; it’s better creative thinking about how to use these closed-loop systems.

Retail media’s reckoning stems from a fundamental misunderstanding: treating every ad placement as purely transactional ignores the role of brand-building in long-term sales growth. AI tools optimize for immediate conversion, not for the brand equity that drives sustained preference.

What This Means for the Industry

The advertising industry is at a crossroads. We can continue down the path of AI-optimized mediocrity, where every ad is algorithmically refined for short-term performance metrics. Or we can recognize that the most valuable applications of AI are in the unglamorous backend work—leaving humans to focus on the creative breakthroughs that actually differentiate brands.

The marketers who will win in the next five years aren’t those who use the most AI tools. They’re the ones who understand where human creativity is irreplaceable and where machine efficiency genuinely adds value. That requires the courage to admit that not every problem needs an AI solution, and that sometimes the old way—humans thinking deeply about consumer psychology and crafting messages that resonate emotionally—is still the best way.

The data is clear: AI is making us faster and cheaper, but not better. Until we’re willing to have that honest conversation, we’ll keep producing more ads that perform okay in testing but fail to move the cultural needle or build lasting brand value. The tools are impressive. The output is not.

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