“I made this in like two days, in my underwear”: AI studios slash advertising production costs

AI-powered creative studios are emerging as a significant force in advertising, with companies like The Dor Brothers charging €200,000 for major campaigns while dramatically reducing production costs and timelines. This shift represents a fundamental change in how brands create content, as 76% of global ad agencies plan to increase AI spending this year, driven by the technology’s ability to compress six- and seven-figure budgets into five-figure productions.

What you should know: AI studios are attracting both corporate clients and investor interest by offering production-grade campaigns at a fraction of traditional costs.

• The Dor Brothers, a German AI studio, charges roughly €200,000 ($235,000) for larger advertising spots, significantly less than traditional production costs.
• Genre.ai charges around $100,000 to make a 30-second commercial, spending only a few thousand dollars on AI tool credits to create them.
• PJ Accetturo of Genre.ai created Kalshi’s NBA finals ad “in like two days in my underwear,” featuring elaborate scenes like alligator wrestling and explosions that would typically cost hundreds of thousands to millions.

The big picture: Major brands and platforms are rapidly adopting AI for advertising production and personalization.

• Consumer brands like Coca-Cola and Toys “R” Us have published AI ads, while Meta is preparing AI tools for personalized campaigns by next year.
• Meta and Google are positioned to create one-stop-shops for marketers, offering both AI-generation tools and ad distribution platforms.
• An April report found 70% of agencies already use AI multiple times per week for everything from brainstorming to media buying.

How it works: AI production requires fewer people with different skills, using tools like Google’s Veo 3, Kling AI, and Midjourney.

• The technology allows for more spontaneous creative processes, though some marketers resist this flexibility.
• AI enables companies to create commercials in different languages with location-specific content.
• Small- and mid-sized companies can now produce campaigns without the budgets of larger competitors.

What they’re saying: Industry leaders highlight both the opportunities and challenges of AI advertising.

• “The beauty of AI is that if I generate a video and something happens that I would have never expected, I can use that,” said Yonatan Dor, CEO of The Dor Brothers.
• “Capitalism is going to capitalism,” noted PJ Accetturo. “If you can compress six- and seven-figure budgets into five figures — where you’re getting 90% of the same look and fidelity — why wouldn’t you switch to AI?”
• “It’s the golden era of production and advertising,” said Shay Chikotay of eToro, an Israeli trading app that has worked with multiple AI studios.

Investment landscape: Traditional advertising agencies are acquiring AI startups focused on ad creation.

• R/GA, a 50-year-old agency, made its first-ever acquisition in Addition, an AI-powered campaign developer.
• This represents a shift from agencies’ traditional investments in data and analytics companies toward creative AI tools.

Room for disagreement: Consumer and industry skepticism remains significant.

• Nearly half of consumers across global markets are “uncomfortable” with AI use in ads, according to a 2024 YouGov survey.
• Some consider current AI ads “weak and gimmicky,” with Coca-Cola facing blowback for a Christmas commercial called “soulless” and “devoid of any actual creativity.”
• WPP’s Chief Technology Officer disputes job displacement fears: “AI replaces tasks, it eliminates tasks, it doesn’t eliminate jobs.”

Market context: The shift mirrors how advertisers adapted to influencer marketing, with global creator marketing spending growing from $1.7 billion a decade ago to an expected $33 billion this year, suggesting AI studios may capture similar budget reallocations.