Experts warn cheap AI ads could hurt brands in Singapore

SINGAPORE: Ads created with generative AI have been appearing everywhere in Singapore lately as companies try to show they are using the newest technology, marketers said.

But there are dangers, because low‑quality AI ads can push shoppers away, the experts warned.

The use of generative AI in advertising is clear – companies of all sizes, from small firms to government bodies, are trying the technology to sell their products or services.

This year’s National Day songs, movies and ads used AI. Local brand Mr Bean launched a virtual idol. Online stores such as Lazada and Shopee now show AI‑run livestreams from big names like Dyson and Walch.

In the last six months, many ad agencies that focus on AI‑created content have seen a sharp rise in demand, according to several studios.

AI Studio, a Singapore agency that makes AI‑generated ads, said it earned little at first, but enquiries have grown four to five times since late 2025 to April 2026.

“When we began, we thought only small firms would need us, we expected most of our clients to be SMEs,” said founder Carol Tan, 36.

“I was wrong – most of our clients are large enterprises that want to lead in AI,” she added, noting the agency now works with multimillion‑dollar listed companies.

Ms Tan, who previously ran a traditional marketing and web‑development firm, started offering AI services about 18 months ago, when many businesses feared being seen as using AI.

“Now it’s the opposite. Companies want to be known as cutting‑edge,” she said.

At the same time, many critics mock ads that look too obviously made by AI.

A quick Reddit search shows many users trying to spot AI‑generated ads and calling out brands for using them.

ASAS chairman Bryan Tan said the Advertising Standards Authority of Singapore received two complaints about AI ads in the first half of 2026.

Although the number of complaints is similar to 2025, regulators worry that AI ads could mislead shoppers if not checked, he explained.

“Just saying an ad used AI does not solve the problem,” Tan said.

He noted that about half of advertisers now use AI to make video ads, citing a report from the Interactive Advertising Bureau.

Consumers fear AI‑created ads might be deceptive, he added, pointing out that 2025 complaints came from many sectors such as interior design, finance, beauty and health.

“Vague AI disclosures do not help,” he said in April. ASAS instead urges the industry to create clear ethical guides for AI use in each sector.

When brands rely on AI for ads, it can look like they care less about the product and marketing, which may hurt their credibility, experts warned.

“Poor ads annoy shoppers, whether AI was used or not,” said SMU marketing professor Sabine Benoit.

“Using AI can suggest a company did not put much effort into the product, which sends the wrong signal to customers,” she explained.

Consumers usually do not blame a brand just for using AI, but they dislike careless, generic or misleading AI work, she added.

Because AI tools are still new, many firms are still learning, so some “mediocre” AI ads still appear, Prof Benoit said.

“AI itself does not damage a brand, but bad AI work can,” she concluded.

AI‑generated virtual influencers can feel too strange for some shoppers, said NUS associate professor Ang Swee Hoon.

“They give people the creeps,” she added, noting this creates mistrust rather than curiosity.

People think that if a brand spends money on ads, it should show real truth, not just AI‑generated images, to keep credibility, she said.

Not all buzz is good, experts warned. Online chatter can grow fast, and negative buzz can hurt a brand’s image, Ang said.

Sometimes a bad ad must be pulled, meaning the campaign failed its goal, she added.

NTU assistant professor Looi Jie Min said people see creativity as a human trait that comes from experience, feelings and culture.

“Users expect human input in creative fields like advertising,” she said.

“When AI tries to replace human creativity, many people react negatively because they feel AI should not replace humans,” she explained.

Even with controversy, demand for AI ads keeps rising. Brands say AI gives three benefits: speed, scale and staying on trend.

Companies that need to quickly adapt ads for many markets can use AI to change one set of materials, AI Studio’s founder Ms Tan said, adding projects can be finished in 24‑48 hours.

“If you give a traditional agency the job, it costs far more to shoot in many countries and languages. AI removes that limit,” she said.

Comfort with AI varies by brand. Some are careful, using AI only for product videos, while others also use AI for videos with human models, she noted.

Using AI does not always cut costs, Ms Tan said, noting some brands fear criticism for raising prices while using AI.

Cost depends on needs. A simple one‑minute video for a small firm may cost about S$1,000, while a complex one‑minute video for a large multinational can cost around S$20,000, she said.

IdoLive founder Kevin Zhang, 56, said many brands now use AI avatars for livestreams on Shopee and TikTok Shop as online shopping livestreams grow.

His company manages AI avatars of celebrities and also provides regular AI avatars for videos and livestreams, which is its main business, he added.

Demand was low at first because platforms shut down AI livestreams after one or two hours, he said, but they started accepting them at the end of 2025.

Since early 2026, requests for AI livestream avatars have risen 20‑30 % each month, he noted.

“Finding a livestream host is hard now. In Singapore a human host costs S$3,000‑S$4,000 for a month and works four‑five hours daily,” said Mr Zhang, whose clients include Walch and Acer.

Both human and AI hosts usually have about ten viewers at any moment, he said.

An AI avatar costs S$458 per month but can stream 24 hours a day, Mr Zhang explained.

The cost drop is big, and nonstop streaming means more sales because the avatar can sell products longer, he stressed.

For a brand to benefit, it must already be well known and have many followers on shopping platforms, he said.

Consumers already know what they want and the price, so they do not care if the host is human or AI, he added.

Agoda’s Singapore director Pranjal Kalra said the travel site used generative AI for a recent local campaign.

“Without AI, doing this across many scenarios and formats would have been expensive and slow,” he said.

Travel content often needs to be changed for different languages, markets, formats and channels, Kalra explained.

AI helps Agoda’s creative team bring local content to market faster. For example, AI in video production raised monthly adaptations from 64 to 720, he said.

Time and cost savings vary by task and how much human polishing is needed, he added.

Beyond speed and cost, AI lets teams test more creative ideas quickly and efficiently, he said.

If AI does not improve work or cannot be used responsibly, it should not be used, he said, noting the company values user feedback.

Circles.Life brand and marketing director Ms Priyadharshini Seevaratnam said the telco has used AI in ads and marketing since 2025.

It uses AI tools for copy, images and video where suitable, she told CNA.

Doing this has made work faster, she added, saying tasks that once took hours now take minutes.

The company also cut spending on stock photos and footage, saving money on licences, she said.

But AI is not a complete solution and every AI asset goes through the same quality checks as other campaign material.

Our teams check AI work for accuracy, brand fit, creative and technical quality, audience suitability and copyright compliance before final approval, she said.

AI does not make final creative choices or publish content on its own, the brand’s director said.

The team knows audiences have mixed feelings about AI in creative work – some find it impersonal or overly machine‑made, she said.

That is why Circles.Life’s mascot was created in‑house in 2D and 3D, not by AI, she explained.

The team constantly reviews whether AI improves its creative output and serves customers and the brand, she added.

“We would cut back if AI‑assisted work no longer meets quality or brand standards, adds errors, or if feedback shows it reduces relevance or trust,” she said.

National water agency PUB uses AI where appropriate to help create advertising and marketing material, it said to CNA.

For PUB’s November 2025 flood‑resilience campaign, visuals combined real actors, photos, stock images and AI‑generated water and background props.

“We use AI thoughtfully. All materials, no matter the tools, are carefully checked before publishing to ensure they are accurate, effective and resonate with our audience,” PUB said.

PropNex Realty’s communications director Ms Fazilla Nordin said the firm used generative AI for animated visuals in its National Day Parade commercial.

Many scenes came from real video footage of real people and were part of the final campaign material, she added.

The AI use was mainly a creative decision, not a cost‑cutting move, she said, noting the creative team stayed involved throughout.

“This project let us experiment, learn and better understand both what AI can do and its limits,” she added.

AI agency Touchmkt founder Charlie Tan, 28, sometimes advises high‑trust clients to avoid AI in ads to keep consumer trust.

For example, a tuition centre should film real parents, children and teachers for testimonial videos to show they are genuine, he said.

“But it also depends… What’s the difference if a teacher approves an AI‑read script versus reading it themselves? The voice and actions are almost the same,” he explained.

Large brands using AI despite having resources for traditional ads is a new trend, said NTU assistant professor Looi, noting most backlash targets them.

Research shows the backlash is strongest for luxury brands, she added.

Luxury brands should be very careful before jumping on the AI bandwagon because shoppers may see AI ads as lazy and think the brand is less authentic, Looi said.

A luxury brand sells an aspirational lifestyle, and authenticity is tied to high‑quality products, she noted.

“If you want wealthy shoppers to spend big money, but your story feels lazy, why would they buy from a brand that doesn’t seem to care?”

Dr Jun Yu, NUS assistant professor of communications, said small businesses might be forgiven for using AI due to limited budgets, but large firms using AI by choice may be judged harshly.

If a global brand that has spent decades showing care now uses AI, people might think it no longer values its relationship with customers, he said.

People will wonder what else is being quietly automated – customer service, quality checks, complaint handling, and more, Dr Yu said.

“It isn’t just one AI use in ads; it’s about whether a company still wants to spend effort and resources,” the sociologist said.

Dr Yu also highlighted a moral issue: many AI models were trained on human creators’ work without permission, threatening their livelihoods, he said.

“So a synthetic ad is more than a marketing choice; it becomes a visible sign of wider worries about fairness, inequality and the social costs of AI,” Dr Yu concluded.

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