Mondelez International Oreo bisquits are seen in this illustration taken July 26, 2021. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights,
- - AI tool cuts ad production costs by 30% to 50% - exec says
- - Mondelez has invested $40M in AI tool - exec says
- - Rivals Kraft Heinz, Coca-Cola also using AI for ads
NEW YORK, Oct 24 (Reuters) - Snack maker Mondelez (MDLZ.O), opens new tab 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.N), opens new tab 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 global senior vice president of consumer experience.
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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, 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.O), opens new tab and Coca-Cola (KO.N), opens new tab 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 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 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.O), opens new tab and Walmart (WMT.N), opens new tab in November. Mondelez 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 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.
Oreo-maker Mondelez to use new generative AI tool to slash marketing costs
Snack maker Mondelez 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.
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