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AI tool cuts ad production costs by 30% to 50% - exec says

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Mondelez ( MDLZ ) has invested $40M in AI tool - exec says

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Rivals Kraft Heinz ( KHC ), Coca-Cola also using AI for ads

By Jessica DiNapoli

NEW YORK, Oct 24 (Reuters) - Snack maker Mondelez ( MDLZ )

is using a new generative AI tool to cut costs for the

production of marketing content by 30% to 50%, a senior

executive told Reuters.

The packaged food manufacturer began developing the tool

last year with IT firm Accenture ( ACN ) and expects that it

will be capable of making short TV ads that would be ready to

air as soon as next year's holiday season, and potentially for

the 2027 Super Bowl, said Jon Halvorson, Mondelez's ( MDLZ ) global

senior vice president of consumer experience.

The Cadbury chocolate producer has invested more than $40

million in the tool, Halvorson said, adding that savings would

grow if the tool is able to make more elaborate videos.

Faced with tariffs and shrinking shopper budgets, Mondelez ( MDLZ ),

like other consumer goods companies, is looking to adopt AI to

slash fees paid to advertising agencies, and speed up how long

it takes to develop and sell new products.

Rivals such as macaroni-and-cheese maker Kraft Heinz ( KHC )

and Coca-Cola have also been trying out AI for ads. Coke

in 2024 ran AI-created holiday ads, though the computer-created

people in them were ridiculed by some consumers for lacking real

emotion.

Mondelez ( MDLZ ) is not yet putting human likenesses in its

AI-created content.

It is using content generated by the new tool on social

media for its Chips Ahoy cookies in the U.S. and Milka chocolate

in Germany. An eight-second Milka video shows waves of chocolate

rippling over a wafer, along with different backgrounds

depending on which consumer Mondelez ( MDLZ ) is targeting.

The cost to do animations "is in the hundreds of thousands,"

Halvorson said. "This type of set-up is orders of magnitude

smaller."

In the U.S., Oreo will use the tool for product pages on

Amazon ( AMZN ) and Walmart ( WMT ) in November. Mondelez ( MDLZ ) plans

to use the tool in the coming months for Lacta chocolate and

Oreo in Brazil, and Cadbury in the UK, Halvorson said.

Tina Vaswani, vice president of digital enablement and data

for the company, said humans will always check what the tool

produces to avoid any mishaps. Mondelez ( MDLZ ) has rules prohibiting

highlighting unhealthy eating habits, vaping, over-consumption,

emotionally manipulative language and the use of offensive

stereotypes, according to a document shared by the Chicago-based

company.