Good morning. Today, a WSJ Leadership Institute survey sheds light on the AI-in-advertising debate; Instacart will pay $60 million to resolve FTC allegations over subscription signups and satisfaction guarantee; CarMax fights a pricey perception.

Marketers that make ads with generative AI are betting that most consumers don’t mind as much as critics in the creative community and elsewhere. (“@CocaCola is ‘red’ because it’s made from the blood of out-of-work artists!”)

Here’s a new piece of new backup for that take:

In a national online survey of 1,017 respondents by TrueDot for the WSJ Leadership Institute, 56% said they’ve noticed ads that appear to be AI-generated.

But a plurality of 45% said it makes no difference to them either way.

Twenty-two percent even called it positive.

The results are just one snapshot of sentiment, which could change quickly as the technology advances. And there’s good reason to be cautious: 33% of respondents said AI-generated advertising bothers them.

Reaction also varies by age.

Gen Z is divided pretty evenly on the question, with 31% happy to see AI-created ads and 31% negative. Respondents over 60 were more critical, at 44% negative and 11% positive.

More AI: The Gap’s customer service chatbot was goaded into discussing topics including how a sales rep might have greeted Hitler if the store were in 1930s Germany. The brand had to respond after the user posted that and other exchanges on X. [Ad Age] 

Subscription tactics remain a hot spot in ad regulation:

Instacart will pay $60 million in refunds to customers to settle allegations from the Federal Trade Commission that it used deceptive practices to raise costs for shoppers, Katherine Hamilton reports for the Journal.

The FTC alleged that the grocery-delivery platform falsely advertised free delivery and 100% satisfaction guarantee, and also didn’t adequately disclose the terms for Instacart+ membership.

Instacart defended its practices even as it acknowledged the settlement.

“We flatly deny any allegations of wrongdoing by the Federal Trade Commission, and we stand firmly behind the integrity and transparency of our programs,” it said.

In the age of Amazon, even cars need to be easy to buy online.

CarMax will boost marketing spending, invest in improving its digital shopping experience and lower prices to arrest an ongoing decline in quarterly sales, Nicholas G. Miller writes.

“Based on recent results, it is clear CarMax needs change,” Interim Chief Executive David McCreight said Thursday on an earnings call:

The used-car company also called its online buying experience too difficult.

“We must now focus our energies on making the digital shopping experience easier and shift our digital voice from one that earnestly delivers abundant information to one that focuses on delivering sales,” McCreight said.

“It’s so easy to buy stuff online. It doesn’t matter what it is these days,” said Tom Folliard, interim executive chairman. “We need to simplify for the consumer how they go through the process with us.”

The community where marketing leaders drop the corporate speak and share what’s actually happening. The WSJ CMO Council unites leaders from the world’s most influential brands including Adobe, Audi, Google, IBM, Intel, Johnson & Johnson, Meta, Taco Bell, P&G and Verizon.

Tap into the connections and WSJ intelligence that move careers forward and separate the prepared from the scrambling.

Request Information

The Kennedy Center board voted to rename the venue the Trump-Kennedy Center, although there are doubts about whether it has legal authority to do so. [WSJ]

CBS News followed up Bari Weiss’s town hall interview with Erika Kirk by announcing a series of town halls and debates called “Things That Matter,” with scheduled guests including Vice President JD Vance, Maryland Governor Wes Moore and OpenAI CEO Sam Altman. [THR] 

Ben & Jerry’s remaining independent board members said owner Magnum Ice Cream is threatening to oust them, accusing the ice-cream giant in a court filing of telling them the company has grounds to dismiss them. [WSJ] 

Christian Parkes, the outgoing CMO at “Anora” and “Parasite” distributor Neon, was named to lead a new Warner Bros. label focused on “smartly budgeted global theatrical releases with innovative marketing campaigns.” [Deadline]

Unilever Chief Growth and Marketing Officer Esi Eggleston Bracey will leave the company in January. Her duties will be assumed by Leandro Barreto, CMO of the beauty and wellbeing group, in the additional role of companywide CMO. [MarketingWeek] 

Planters and Skippy parent Hormel Foods created a company-wide CMO role as part of broader efforts to strengthen its marketing. [Consumer Goods]

Costco shelves have a bit more health and beauty products and fewer Christmas trees and toys this holiday season as the retailer tweaks its lineup to navigate tariffs. [WSJ] 

Darden Restaurants said same-store sales at its LongHorn Steakhouse chain grew 5.9% last quarter, possibly indirectly aided by rising beef prices in grocery stores. [WSJ]

Sony is taking control of Snoopy and Charlie Brown, the latest Hollywood power play for cartoon icons across the entertainment industry. [WSJ] 

Is YouTuber-turned-boxer Jake Paul going to get pulverized tonight on Netflix? [WSJ] 

This year’s “He Gets Us” Super Bowl commercial will prompt viewers to consider Jesus as the answer to the pressures of the digital era. [Adweek]