Is “made by humans” the new premium label?

Could made by a human become a selling point? For American public media, this is Marketplace Tech, I'm Stephanie Hughes. I was shopping recently with my seven-year-old and he was drawn towards a relaxolotl. It's a tea infuser shaped like an axolotl, that sort of cute, sort of weird looking aquatic animal. It had a label designed in Rhode Island by People. The company that makes the relaxolotl, Genuine Fred, told me they adopted the saying over a decade ago, before AI was really in the conversation. It was meant to signal there were real humans behind the ideas. Now though the phrase has taken on new meaning, the company does use AI as a tool, but says people are still at the center of its design process. It made me wonder, could human involvement be highlighted more by brands in the future? I talked about this with New York Institute of Technology professor Colleen Kirk. She studied how people respond to marketing messages created by AI. In our research, we showed that labeling content as AI generated lowers consumer trust, lowers authenticity, lowers their purchase intent, lowers their positive word of mouth. This is especially true in cases of emotional content, things that are supposed to be human and that are viewed as uniquely human, tend to be viewed negatively when AI is used to generate it. Are there certain types of products where consumers might be more resistant to an AI designer? I think that if you look at the totality of the research, anything related to a consumer's own identity, things they wear, things that are emotionally important to them, something generated by an AI is going to be aversive to them. They are not going to respond well for those kind of products. Whereas things that are more to utilitarian, a pen that you need or some dish soap, they're probably going to care less that it was AI generated. Yeah, we might be okay with our sewer pipes or our carpets being designed by AI, but we don't want our shoes to be designed by us. Exactly. Exactly. Things that are supposed to reflect our own sense of self. You mentioned purchase intent. Is that basically that people are less likely to buy something if it's created by an AI or even if the marketing around it is made by an AI? Yes, exactly. There's quite a bit of research on this in various domains, including product design, product manufacturing, marketing communications, artwork. It's based on this idea of algorithm aversion. People really, especially when something they feel is something as uniquely human, like emotional content that's uniquely human, they want brands to be authentic and they want products to be authentic. When something is communicated in such a way that it's AI generated, they don't feel it and perceive it to be authentic. That's even just the marketing, not even just if the AI made the product or AI designed the products. Even if AI designed or made the marketing around it, right? That's right. That's right. Even when products are manufactured even by machines, people will pay more for products that are human-made because of the emotional, the human investment of self and human love that goes into it. There's even research on that. I feel like AI is in the mix of a lot of people's workflows right now. You hinted at this to a greater or lesser degree. It made me wonder if we market something as made by a human in the future, what could that mean? Could AI still be a tool that's part of the process the same way that calculators or spell checkers are part of our process now? In our research, we manipulated how much the AI was involved. What we found is that if we specified that the AI developed the communication, but the human edited it, people were still upset. They still didn't perceive it to be authentic. However, when we flipped it and we said the human developed it, but the AI edited it or the AI assisted in making it, then this AI authorship effect went away. We'll be right back. If you're a business leader, Intuit QuickBooks Payroll is an essential tool that completely integrates payroll, time tracking, HR, and your financials in a powerful all-in-one command center. More juggling platforms are switching between vendors. All your data synced into one platform offering clarity and confidence to make smarter decisions and focus on what matters. This summer, QuickBooks Payroll evolves to support the entire team lifecycle, HR, time, benefits, and payroll, all working together in one connected system that fully integrates with your books. You'll be able to onboard employees in one seamless flow that feeds directly into payroll, configure automated HR workflows for things like promotions or off-boarding, and track performance time off and benefits alongside payroll. Upgrade your workflow with QuickBooks Payroll today and get ready for the brand new tools coming soon. More at quickbooks.com slash workforce. That's quickbooks.com slash workforce. You're listening to Marketplace Tech. I'm Stephanie Hughes. We're back with Colleen Kirk, Professor of Marketing and Management at the New York Institute of Technology. You've studied marketing around AI and how consumers respond to that. How common is it for companies to label their marketing as label when their marketing has an AI involvement? The interesting thing, companies are really grappling with how much to disclose. In Europe, the European Union AI Act, you may be familiar with that, stipulates that marketers need to disclose when content is AI generated. We don't have a law like that in the United States. Marketers are still having a hard time figuring out how much do they disclose, when do they disclose it. Because the reality is when they do disclose that they have to be very careful. They're done so far. There are not many positive benefits that have been documented to disclosing AI content. On the other hand, they do want to be honest. There is a sense of a moral obligation there. How big of a selling point could human design or human-made be for brands in the future? I think it's going to become increasingly important. One of the studies we did as part of this research is we manipulated whether people assumed that marketers were using AI or assumed that they were not using AI. We found that in the world where people are assuming that marketers are all using AI, everybody's trust and everybody's sense of authenticity declined. The natural extension of this that we talked about in our research is to begin to say when you're using humans and when are you using human models. This of course is especially true as we start developing products where AI can design and build the entire product. When we start developing videos and now that we have video content that can be entirely AI generated, that sense of authenticity and transparency is really crucial. We bought this relax-a-lottel for my mom and I asked her if she'd be willing to pay more for a human design product. She said she would even if it was lumpier, her word, than an AI made one. It made me wonder, are there certain kinds of consumers who may be more drawn to human-made products? The interesting thing and I found this very surprising and that is that Gen Z consumers, our young consumers, seem to be more skeptical of AI than older consumers. There's new research that just came out in January that shows that Gen Z is nearly twice as likely as millennials to view AI generated ads, for example, negatively, 39% versus 20%. And that's consistent with this generation pushing back against social media, against things that are not authentic. They especially want their brands and their products that they buy to be authentic. And AI involvement speaks against that. That's Colleen Kirk at the New York Institute of Technology. I'm Stephanie Hughes and that's Marketplace Tech. This is APM.