The advertising revolution that's dividing Australian shoppers: Why AI-generated ads are here to stay

You might have seen them already—those slightly off-putting advertisements where something just doesn't quite look right.

Perhaps it was the unnaturally smooth skin in a beauty ad, or dogs with eyes that seemed a bit too human. Welcome to the world of AI-generated advertising, and whether you love it or hate it, it's becoming as common as morning tea.

The conversation reached fever pitch recently when pyjama retailer Peter Alexander launched what they called a 'peek into the Peter Alexander universe' using AI-generated dogs.

The campaign, meant to showcase their signature canine-themed sleepwear, instead sparked a social media storm that had Australians questioning everything from creativity to job security in advertising.

When cute dogs become uncanny companions

Peter Alexander, which reported record sales of $548 million last financial year, described their AI campaign as using 'a bit of AI magic to leave limits at the doggy door'. But many shoppers weren't charmed by the digital pooches, with social media users labelling them 'creepy' and some even threatening to boycott the brand entirely.

The reaction highlights what psychologists call the 'uncanny valley' - that unsettling feeling we get when something looks almost human (or in this case, almost like a real dog) but not quite right. It's the same sensation you might experience watching a movie with slightly off CGI characters.

Consumer psychologist Dr Christina Anthony from the University of Sydney Business School warns Australians to 'get used to it' because AI advertising will 'absolutely' be the norm in the future. The question isn't whether AI will take over advertising, but how quickly we'll adapt to it.

The great Australian advertising divide

The Peter Alexander backlash reflects a broader generational and cultural divide about artificial intelligence. Many social media users criticised the brand's decision to employ AI over human graphic designers, with some questioning the impact on local creative jobs.

But consumer psychologist Adam Ferrier from creative agency Thinkerbell believes the outrage may be overblown. He called the campaign a 'misfire' but described the backlash as 'ridiculous', comparing it to the uproar over Photoshop use in the 2000s.

'No one cares that much that [Peter Alexander] is creating slightly creepy-looking dogs,' Ferrier told 9news.com.au, adding that 'advertising has to be incredibly bad, like almost inconceivably bad, to put people off going somewhere and that never happens'.

The international AI advertising boom

Australia isn't alone in this digital transformation. In August, J Crew and Vans launched an AI campaign promoting their collaboration, followed by luxury brands like Guess, Valentino, and Moncler. The reactions have been similarly mixed, with critics dismissing some efforts as 'AI slop' while others herald them as advertising's future.

The broader AI landscape in 2024 saw the technology become 'a game-changer across industries, making headlines for both incredible breakthroughs and heated controversies,' with debates ranging 'from smarter chatbots and lifelike voice clones to debates about job security and ethics'.

What's driving the AI advertising stampede?

The push toward AI isn't just about novelty—it's about dollars and cents. Ferrier has embraced AI at Thinkerbell, recently working on campaigns for Victoria's Transport Accident Commission (TAC) and Menulog using generative AI, despite some initial blowback from audiences.

For businesses, the appeal is obvious: AI can create content faster and cheaper than traditional methods, while allowing for personalisation at unprecedented scale. A single AI system can generate dozens of variations of an advertisement in the time it would take a human designer to create one.

But there's a cost beyond the financial. Reports from 2024 indicated that '40 per cent of jobs globally were influenced by AI,' with 'AI automation tools reshaping industries, especially in repetitive roles like data processing and customer service', leaving many worried about employment security.

The human touch versus artificial efficiency

Dr Anthony suggests that consumer expectations play a crucial role in how AI advertising is received, noting that 'consumers expect warmth, playfulness, and a human touch from a brand like Peter Alexander ... they don't want to see a slick AI dog in their ads'.

This points to a fundamental tension in modern advertising: the efficiency of AI versus the emotional connection of human creativity. While AI can generate thousands of variations quickly, it struggles with the subtleties of human emotion and cultural context that make advertising truly resonate.

Looking ahead: The inevitable future

Both experts predict that Australians will adapt to AI marketing as it becomes more mainstream, with Anthony noting that 'over time consumers will not react with the same shock or scepticism'.

Looking toward 2025, experts predict 'transformative advancements in AI, with this year set to redefine AI's role in our lives and industries'. The technology will become more sophisticated, potentially eliminating the current 'uncanny valley' problems that make AI-generated content feel unsettling.

The reality is that most consumers 'might express frustration or disapproval initially, but unless a strong alternative brand activates their values better, many will continue shopping out of habit or convenience,' as Dr Anthony explains. And crucially, 'most brands won't abandon generative AI as the efficiencies are too valuable'.

The Peter Alexander lesson

What can we learn from Peter Alexander's AI experiment? Perhaps that the conversation about artificial intelligence in advertising isn't really about the technology itself, but about values—what we expect from brands, how we feel about human creativity, and our comfort with rapid technological change.

As Ferrier noted, 'at the moment, there are a lot of brands trying to use AI and using it in a really clumsy way that's getting a lot of ridicule'. The key seems to be not whether to use AI, but how to use it thoughtfully.

For Australian shoppers, especially those who remember when computer graphics first appeared in television ads, this might feel like history repeating. The technology will improve, our eyes will adjust, and what seems revolutionary today will become mundane tomorrow.

Whether you love or loathe those slightly odd AI dogs from Peter Alexander, one thing is certain: they've opened a door that's unlikely to close. The question now is what walks through it next.