Mondelez invests $40M in AI video tool to slash TV ad costs

Snacking giant Mondelez is using generative AI to slash marketing costs and plans to release AI-generated TV ads next year, marking a significant shift toward automated content creation in traditional advertising. The move comes despite fierce backlash against AI-generated ads, including Coca-Cola’s widely criticized 2024 Christmas videos that were labeled “soulless” and creepy by online audiences.

What you should know: Mondelez, the company behind Oreo cookies and other popular snacks, has invested heavily in AI video technology to dramatically reduce production expenses.

• The company has spent more than $40 million on an AI video tool that can halve production costs, according to Jon Halvorson, Mondelez’s global senior vice president of consumer experience.
• TV ads created using the tool should be ready to air in time for the 2026 holiday season and potentially the 2027 Super Bowl.

Current AI usage: The company is already deploying AI-generated content across multiple brands and platforms.

• Mondelez is using the tool to create social media content for Chips Ahoy cookies and Milka chocolate.
• The company will use AI to design online product pages for Oreo cookies starting in November.

The big picture: Companies are increasingly turning to AI to cut advertising spending, though results have been mixed across the industry.

• Coca-Cola’s AI-generated Christmas ads last year were heavily criticized online as “soulless” and creepy, highlighting the potential risks of automated creative content.
• Mondelez’s decision to move forward with AI-generated TV ads represents a calculated risk given the documented consumer backlash against similar initiatives.

Why this matters: Mondelez’s commitment to AI-generated advertising could signal a broader industry shift toward automated content creation, despite consumer resistance and quality concerns that have plagued early AI advertising efforts.