Gen Z hates AI ads. But does it really matter if they're not the biggest spenders?

Does Gen Z really hate AI advertising?

Yes, Gen Z is becoming increasingly sceptical. But that doesn't mean everyone in the generation dislikes every use of AI.

The IAB's 2026 AI Ad Gap research offers one of the clearest illustrations of changing attitudes.

In 2024, 21% of Gen Z respondents expressed negative feelings towards AI-generated advertising. By 2026, that had risen to 39%.

Among millennials, negative sentiment increased from 15% to 20% over the same period.

The difference becomes even more interesting when consumers are asked how they perceive brands using AI.

The IAB found that 30% of Gen Z described these brands as "inauthentic", compared with 13% of millennials. Another 26% called them "disconnected", compared with just 8% of millennials.

And 24% of Gen Z considered them "unethical", compared with 8% of millennials.

The research surveyed 505 American Gen Z and millennial consumers alongside 104 advertising executives. It's a useful measure of changing attitudes, although it shouldn't be treated as representative of every consumer worldwide.

A separate Bentley University-Gallup survey published in August 2026 found that 66% of American adults aged 18 to 29 viewed businesses using AI to create advertising negatively.

That compared with 51% of people aged 30 to 44, 38% of those aged 45 to 59 and 46% of people aged 60 and over.

The same research found that 73% of 18 to 29-year-olds considered it unacceptable for businesses to create artificial people or voices for advertising.

This isn't simply a case of young people disliking an advert because it looks slightly strange.

There's a much bigger issue around authenticity, representation and whether consumers believe what they're seeing.

And the growing volume of AI-generated content isn't making those concerns disappear.

According to Kantar's Media Reactions 2025 study, 57% of consumers were concerned about generative AI being used to create fake advertising.

Meanwhile, YouGov's July 2026 survey of 2,012 adults found that 69% had encountered adverts featuring AI-generated actors. Of those who had seen them, 76% disliked them and 68% found them less convincing than human actors.

Clearly, brands have some convincing to do.

But Gen Z uses AI more than almost anyone else

This is what makes the backlash so interesting.

The generation questioning AI advertising is also one of the generations embracing AI in everyday life.

According to Ofcom's Adults' Media Use and Attitudes research, published in April 2026, 79% of 16 to 24-year-olds use AI tools, compared with 74% of 25 to 34-year-olds and 54% of adults overall.

And in YouGov research published on 27 October 2026, 51% of British adults said they used AI tools at least once a week, despite 93% reporting at least one concern about the technology.

So consumers are clearly capable of using AI while remaining sceptical about its wider applications.

There's a difference between using ChatGPT to organise your week and watching a brand replace an entire cast of people with AI-generated characters.

One is a tool that helps you do something.

The other is a creative decision made by a business.

And consumers don't necessarily judge those two things in the same way.

Research conducted by Ipsos for the BBC, published in February 2026, found that 58% of respondents felt nervous about AI being used in media. Some 70% preferred human-driven films, while 78% preferred online news written by people.

These aren't advertising-specific findings, but they demonstrate a broader reluctance to replace human creativity with synthetic content.

The distinction is important.

In the Gallup research, 75% of American adults considered it acceptable for businesses to use AI to help employees brainstorm ideas or create early advertising drafts, provided its use was disclosed.

But 62% considered AI-generated people or voices unacceptable, even with disclosure.

Consumers are much more comfortable with AI supporting creativity than replacing people altogether.

And attitudes aren't identical across every market. YouGov's May 2026 Australian research actually found that Gen Z and millennials were relatively more comfortable with AI advertising than older generations, although overall sentiment remained cautious.

So saying Gen Z universally hates AI would be too simplistic.

The issue isn't always the technology. It's what brands choose to do with it.

Something we touched on in our previous article, Humans First Bots Second.

Does Gen Z have the most spending power right now?

No. And this is where marketers need to look beyond cultural influence.

Gen Z has enormous influence over digital culture, emerging trends and what becomes popular online.

But influence and spending power are not interchangeable.

According to NielsenIQ and World Data Lab's research into Gen X spending, Gen X has been the world's highest-spending generation since 2021.

Its spending reached approximately $15.2 trillion in 2025 and is projected to rise to $23 trillion by 2035.

The research suggests Gen X will remain the highest-spending generation globally until 2033.

That is an enormous amount of purchasing power for a generation that doesn't receive nearly as much attention in marketing conversations.

Meanwhile, NielsenIQ's August 2026 consumer spending report projects Gen Z's annual spending will reach $12 trillion by 2030.

It's certainly a major future opportunity.

But future spending projections shouldn't be confused with the money consumers are spending today.

There's also an obvious issue with treating Gen Z as a single financial demographic.

The oldest members are approaching 30. The youngest are still teenagers.

Some are buying houses, building careers and raising families. Others are studying, living with parents or entering the workforce for the first time.

According to PwC's Autumn 2026 Consumer Sentiment Survey, 61% of 18 to 24-year-olds were worried about their employment prospects, up from 54% earlier in the year.

For people aged 25 to 34, concerns about job security or employment prospects increased from 59% to 63%.

The same survey found that concerns about mortgage repayments and rent increases among 25 to 34-year-olds rose from 52% to 62%.

So while Gen Z is becoming increasingly valuable to brands, many younger consumers are still navigating significant financial pressures.

That doesn't mean they aren't spending.

It means the categories they're spending in, and the amounts they're able to spend, can be very different from those of older households.

Gen Z might not spend the most, but it spends differently

There are categories where Gen Z is already outperforming older generations.

Take subscriptions.

Visa research published in 2025, based on a survey of 4,152 adults, found that Gen Z respondents spent an average of £305 per month on subscriptions.

Millennials averaged £261, baby boomers £108 and Gen X £91.

Visa also reported that 93% of Gen Z respondents held at least one subscription.

These figures relate specifically to subscriptions, not overall consumer spending. But they demonstrate why younger audiences can still represent significant commercial opportunities.

The same survey found that 35% of Gen Z respondents had paid for a subscription or bill they no longer wanted, compared with 23% across all respondents.

And 20% of Gen Z had decided against a purchase or subscription because of previous payment problems.

Trust, convenience and customer experience clearly influence spending decisions.

There's also the longer-term value of building relationships early.

In NielsenIQ's 2025 research into Gen Z shoppers, 63% said they always bought brands they already knew and trusted.

Another 77% looked for brands that were easily available online, while 66% valued brands that people talked positively about through personal stories and recommendations.

So yes, Gen Z matters.

Not necessarily because it's currently spending the most, but because the relationships brands build today could influence future purchasing behaviour.

That doesn't mean every brand needs to prioritise Gen Z.

It means businesses should understand whether Gen Z is commercially relevant to them, rather than chasing younger consumers simply because they're generating the most conversation.

What about millennials? Aren't they the ones spending?

Yes. Millennials are an extremely valuable consumer group, and the numbers deserve more attention.

While Gen Z dominates many conversations about digital culture, millennials are now largely in their thirties and forties.

For many, this is the stage of life associated with mortgages, children, household spending, travel, vehicles and other major financial commitments.

And research suggests they're spending substantially in certain categories.

In NielsenIQ's March 2025 analysis, millennial shoppers in the United States spent 43% more than the overall average on fast-moving consumer goods.

Gen X spent 24% above average, while baby boomers spent 12% above average.

Gen Z spent 19% below average.

These figures relate to everyday consumer goods, rather than the total value of every purchase made by each generation. They are also market-specific.

But they're an important reminder that millennials can be extremely valuable customers, particularly in categories connected to households and everyday living.

And there's more encouraging evidence.

PwC's Autumn 2026 research found that adults aged 35 to 44 recorded a consumer sentiment score of +21, the highest score for that age group since the survey began in 2008.

Across all ages, 39% of respondents reported having enough money left at the end of the month for savings or luxuries, compared with 27% in September 2022.

Consumer confidence isn't a direct measure of spending, but it does provide useful context about how comfortable households feel financially.

And when it comes to AI advertising, millennials appear considerably less negative than Gen Z.

The IAB's January 2026 findings show 20% of millennials reporting negative sentiment towards AI-generated advertising, compared with 39% of Gen Z.

That's not the same as saying millennials love AI advertising.

But it suggests they may be less resistant to certain applications.

For brands targeting consumers with established careers, households and greater financial responsibilities, that difference is worth understanding.

What about baby boomers? Surely they're the generation with the money?

Yes, older households tend to hold more accumulated wealth. But no, that doesn't mean every baby boomer is wealthy.

Baby boomers were generally born between 1946 and 1964, putting them in their early sixties through to around 80 in 2026.

Many are retired. Others are still working.

They've had more time than younger generations to build pensions, purchase property and accumulate assets.

And the difference is substantial.

According to the Office for National Statistics' household wealth figures, published in January 2025, households headed by someone aged 65 to 74 had median total wealth of £502,500.

For households headed by someone aged 16 to 24, the equivalent figure was £15,200.

That's approximately 33 times more wealth.

These figures cover 2020 to 2022 rather than 2026, and the House of Commons Library has highlighted significant quality concerns with the ONS wealth survey. They should therefore be treated as historical estimates rather than precise measures of wealth today.

Nevertheless, they illustrate the scale of the difference between older and younger households.

But here's the important part.

Wealth is not the same as disposable income.

The ONS found that 40% of household wealth was held in property and another 35% in private pensions.

Net financial wealth accounted for 14%.

Owning a £500,000 house doesn't mean having £500,000 available to spend.

And being retired doesn't automatically mean having a particularly comfortable income.

According to the Department for Work and Pensions' March 2026 pensioner income statistics, pensioner couples had an average weekly income of £650 after direct taxes and housing costs in the financial year ending 2025.

Single pensioners averaged £332 per week.

The same research found that 26% of pensioners received income-related benefits, while 12% received income solely from the State Pension and other state benefits.

These are pensioner statistics, not a direct breakdown of baby boomer finances, but they help explain why retirement doesn't automatically mean financial freedom.

Some older consumers have valuable property, substantial private pensions and relatively few financial commitments.

Others are managing carefully on fixed incomes.

And both groups can exist within the same generation.

For marketers, the distinction matters.

A luxury travel company, financial services provider or premium retailer might find affluent older consumers especially valuable.

A business selling lower-cost everyday essentials might have a completely different customer profile.

Age alone isn't enough to establish someone's spending power.

And Gen X? The generation everyone seems to forget

While the industry debates whether Gen Z likes AI, Gen X is quietly getting on with spending the money.

As we've already seen, NielsenIQ and World Data Lab identified Gen X as the world's biggest spending generation.

Part of that is connected to where its members sit in life.

Many are at relatively advanced stages of their careers, supporting children, maintaining households and, increasingly, helping ageing parents.

NielsenIQ describes them as "caretaker consumers", reflecting the financial responsibilities that can extend across multiple generations.

And spending patterns are increasingly influenced by income, life stage and category rather than age alone.

In fact, NielsenIQ's August 2026 report found that consumers across generations are switching between premium purchases and value-seeking behaviour depending on the product and occasion.

A person might happily spend more on a holiday or skincare while choosing supermarket own-label products for everyday shopping.

That behaviour isn't exclusive to one generation.

The ONS' June 2026 family spending report also illustrates how much income matters.

In the financial year ending 2025, households in the highest income fifth spent an average of £1,083.60 per week, compared with £407.30 among the lowest income fifth.

That's a gap of 2.7 times.

Which brings us back to advertising.

A generation might influence culture, but that doesn't automatically make it the most valuable customer base for every business.

But does Gen Z's reaction to AI advertising really matter?

Yes. Because the trust problem extends beyond Gen Z.

And this is arguably the most important finding for brands.

In YouGov's July 2026 research, 83% of 18 to 34-year-olds said they would trust a brand less for using AI-generated actors.

Among people aged 55 and over, the figure was still 74%.

So although younger consumers express stronger negative reactions, older audiences are hardly enthusiastic.

And trust is commercially important.

According to new IPA research published in January 2026, 93% of for-profit advertising campaigns associated with very large increases in brand trust also reported at least one very large business effect, including sales, market share or profit growth.

Across all for-profit campaigns in the IPA's Effectiveness Databank, the equivalent figure was 66%.

The analysis covered 812 campaigns submitted between 1998 and 2024.

That doesn't mean trust alone caused every commercial improvement, but it demonstrates a strong association between trust-building advertising and business effectiveness.

There is also a wider problem with how consumers perceive advertising.

Research from Credos and the Advertising Association found that public trust in advertising had reached 40%, a five-year high.

Trust in social media advertising among 18 to 34-year-olds increased from 32% in 2021 to 54% in 2025.

So younger consumers aren't necessarily rejecting advertising itself.

But the same research found that 17% of people reported being scammed by an advert in 2025.

That helps explain why authenticity and transparency are becoming increasingly important.

Consumers are already navigating an advertising environment where misleading content, fake endorsements and scams are serious concerns.

Introducing synthetic actors and AI-generated testimonials without clear explanation risks making that environment even harder to navigate.

And according to YouGov's August 2026 research into AI-generated content, 70% of adults said misleading or deceptive AI content would negatively affect their trust in a brand.

Another 68% identified failing to disclose AI usage as a reason for reduced trust, while 56% said replacing humans entirely would have the same effect.

This isn't only a Gen Z issue.

It's a brand credibility issue.

So are brands actually making AI advertising work?

Yes. And some of the strongest examples show that AI doesn't have to replace human creativity to deliver results.

Take O2's AI-powered granny, Daisy.

Created to occupy telephone scammers and waste their time, Daisy used generative AI to simulate the conversations of an elderly woman.

The campaign gave the technology a clear purpose, made it central to a distinctive creative idea and brought a serious issue to life with a little humour.

According to the Data & Marketing Association's Daisy vs Scammers case study, the campaign generated more than 2,000 pieces of global media coverage and over 2 billion earned impressions.

Unprompted campaign recall peaked at 17%, while reported satisfaction with O2's efforts to tackle fraud increased by 42%.

These were campaign-reported results, rather than direct evidence of additional sales.

But they demonstrate what happens when AI serves an idea people can understand.

Daisy wasn't pretending to be a real grandmother endorsing a product. The technology was part of the story.

And that makes a difference.

There's also Waitrose.

Its No.1 campaign combined S Club nostalgia, Jax Jones and a playful creative concept that gave people something entertaining to engage with.

But AI still had a role.

According to the DMA's Waitrose No.1 case study, dynamic creative optimisation on Meta helped deliver different versions of the campaign to relevant audiences.

The wider campaign generated 180.5 million impressions and 11.7 million engagements, while brand consideration reached a reported record 47%.

Those results can't be attributed to AI alone, but the campaign is a useful example of technology supporting a strong human-led idea.

Another example comes from PRESS Healthfoods.

According to an IAB case study, the brand tested Meta's AI-powered shopping and creative tools against a campaign without the same AI setup.

The AI-powered approach delivered 40% more product sales and a 33% lower cost per purchase.

The test included AI creative enhancements alongside campaign optimisation, so those improvements shouldn't be attributed entirely to generative imagery.

Nevertheless, they show that AI can deliver measurable commercial benefits.

And the trend extends beyond paid social.

In September 2026, Very announced a new campaign developed by its internal creative team, HelloStudio.

The retailer described its wider production approach as combining human creativity with virtual production, AI-generated environments and automated workflows.

Again, technology was being used to support production rather than presented as a replacement for the creative team.

The common thread is fairly straightforward.

AI works best when it helps deliver a better idea, a better experience or a better commercial result.

Using it simply because it's available isn't a strategy.

The advertising industry might be more excited about AI than its customers

And the research suggests there's a significant disconnect.

The IAB's January 2026 report found that 83% of advertising executives surveyed said their companies had deployed AI within the creative process, up from 60% in 2024.

Some 64% identified cost efficiency as a benefit, while 61% highlighted creative innovation.

But here's the interesting part.

82% of advertising executives believed Gen Z and millennial consumers felt positively about AI-generated advertising.

Only 45% of those consumers actually reported feeling positively.

That's a 37% gap between what advertisers think consumers want and what consumers say.

And it's not just an issue of adoption.

ISBA's July 2026 Gen AI Survey, based on 200 advertiser responses, found that 99% were engaging with generative AI.

However, only 14% reported a significant impact on business results.

That's an important distinction.

Using AI doesn't automatically mean advertising is more effective.

It might reduce production costs or speed up a workflow.

But if the finished advert damages trust, fails to communicate the product or simply doesn't appeal to its intended audience, those savings become much less impressive.

And even beyond advertising production, consumers remain cautious about AI influencing their decisions.

Kantar's Media Reactions 2026 research, involving more than 23,000 consumers across 33 markets, found that only 24% trusted brand recommendations from AI assistants.

AI assistants and AI-generated adverts are different things, but both findings reinforce the importance of consumer trust.

Technology can create more opportunities to reach an audience.

It doesn't automatically create a reason for that audience to believe you.

Should brands disclose when they're using AI?

Yes. Especially when AI creates people, voices or visuals that could be mistaken for reality.

According to YouGov's July 2026 study, 94% of adults believed brands should disclose when advertising features AI-generated actors.

Meanwhile, YouGov's August 2026 research found that 89% considered it important for AI-generated content to be explicitly identified.

The IAB also found that 73% of Gen Z and millennial respondents said knowing an advert was created with AI would either increase their likelihood of purchasing or make no difference.

That doesn't mean disclosure guarantees commercial success.

But it does challenge the assumption that acknowledging AI automatically puts people off.

And the industry is responding.

In February 2026, the Advertising Association published guidance on the responsible use of generative AI in advertising, developed with industry and regulatory involvement.

For businesses, the principle is fairly simple.

If using AI risks misleading people about what they're seeing, honesty matters.

Because an advert that looks convincing isn't necessarily an advert that earns trust.

So who should brands actually be listening to?

The answer isn't to ignore Gen Z.

But it isn't to build every marketing strategy around the youngest generation either.

The figures show why a more considered approach matters.

Gen Z is increasingly sceptical of AI advertising, but its future spending potential is substantial.

Millennials are already highly valuable in everyday consumer categories, and many are at a financially significant stage of life.

Gen X currently leads global consumer spending, despite receiving relatively little attention in the wider marketing conversation.

And baby boomers, particularly wealthier older households, have accumulated considerable assets, although retirement wealth and disposable income vary enormously.

These groups also overlap with more meaningful commercial distinctions, including household income, employment, financial responsibilities, product preferences and purchase intent.

So a brand needs to understand who actually buys its products, what influences their decisions and whether its advertising is helping or damaging that relationship.

And when it comes to AI, the reaction of Gen Z is worth paying attention to precisely because the wider concerns are shared by older consumers too.