The Inverted U-Shaped Effect of Personalization on Consumer Attitudes in AI-Generated Ads: Striking the Right Balance Between Utility and Threat

AI-generated ads present unparalleled potential for personalization, with a growing trend among tech giants and advertisers towards "the more personalized, the better." However, the appropriate degree of personalization in AI-generated ads and its impact on consumer attitudes remain unclear. Drawing on approach-avoidance theory, this research proposes an inverted U-shaped relationship between the degree of personalization and consumer attitudes in AI-generated ads. Three experiments reveal that moderate personalization leads to the most favorable attitudes compared to low and high degrees. The net difference between perceived utility and perceived threat (PUTD) mediates this effect, with the most favorable attitudes occurring when the PUTD reaches its maximum at a moderate degree of personalization. Furthermore, privacy concerns moderate this mechanism.