Oh, the blind test argument is one I drag out regularly. It's like the creative director thinks customers are secretly judging kerning while scrolling through Instagram.
Been there. The reality is most people can't tell the difference between a £5,000 photoshoot and a well-prompted AI image if the message hits them in the right moment. They care about whether the ad feels like it gets them, not whether it was birthed from a human's tortured creative soul.
The only ones who can reliably spot the difference are other creatives, and they're not the ones buying the product. Your audience is busy, distracted, and mostly just wants to know if you can solve their problem. If the AI-generated ad does that better than the "human-crafted" one, well... that's a pretty uncomfortable truth for the craft-first crowd.