Mondelez International Invests $40 Million in AI to Slash Ad Production Costs by Up to 50%

Mondelez International, the global snack and confectionery giant behind brands like Oreo and Cadbury, has invested over $40 million in developing a proprietary generative artificial intelligence (AI) video model for its advertising campaigns. This strategic move aims to significantly reduce marketing content production costs by an estimated 30% to 50%, with the company anticipating the tool to be ready for short television advertisements as early as next year's holiday season. The initiative underscores a growing industry trend towards leveraging AI for enhanced efficiency and faster content creation.

The substantial $40 million investment was channeled into developing this advanced AI tool in collaboration with IT firm Accenture and ad company Publicis Groupe. Jon Halvorson, Mondelez's global senior vice president of consumer experience, confirmed the investment and the expected cost reductions, noting that savings could increase further as the tool becomes capable of more elaborate video creation. This development positions Mondelez to streamline its marketing operations amidst rising tariffs and tightening consumer budgets.

Currently, the AI-generated content is already being utilized for social media campaigns, including those for Chips Ahoy cookies in the U.S. and Milka chocolate in Germany. The tool will also be deployed for product pages for Oreo on platforms like Amazon and Walmart starting in November, with plans to expand its use to Lacta chocolate and Oreo in Brazil, and Cadbury in the UK. Halvorson indicated that the AI-powered ads could potentially debut during major events such as the 2027 Super Bowl.

The adoption of AI in advertising is not unique to Mondelez, as rivals like Kraft Heinz and Coca-Cola have also explored similar technologies. However, Mondelez is proceeding cautiously, avoiding the use of human likenesses in its AI-created content to prevent potential consumer backlash experienced by some competitors. Tina Vaswani, Vice President of Digital Enablement and Data for Mondelez, emphasized that human oversight will always be maintained to ensure compliance with company guidelines against unhealthy eating habits, over-consumption, and emotionally manipulative language.

The rapid advancements in video models suggest a transformative period for the advertising industry. As one observer noted, "Video models are continuing to advance at a rapid rate, by next year it will be difficult to tell if an ad is AI generated." This evolution highlights the increasing sophistication of AI in creative fields and its potential to redefine traditional advertising production processes.