What's Happening?
Mondelez International, the maker of popular snacks such as Oreo cookies, is leveraging a new generative AI tool to significantly cut marketing costs. The company aims to reduce expenses associated with producing marketing content by 30% to 50%. This
initiative, developed in collaboration with IT firm Accenture, is part of Mondelez's strategy to streamline operations amid economic pressures like tariffs and reduced consumer spending. The AI tool is being used to create content for social media campaigns, including for Chips Ahoy in the U.S. and Milka chocolate in Germany. Mondelez has invested over $40 million in this technology, which is expected to produce short TV ads by the next holiday season and potentially for the 2027 Super Bowl. The company is cautious about the content produced, ensuring it adheres to guidelines that prevent the promotion of unhealthy habits or offensive stereotypes.
Why It's Important?
The adoption of generative AI by Mondelez highlights a growing trend among consumer goods companies to utilize advanced technologies to enhance efficiency and reduce costs. By cutting down on fees paid to advertising agencies and speeding up content production, Mondelez can allocate resources more effectively, potentially leading to increased competitiveness in the market. This move also reflects a broader industry shift towards digital transformation, as companies seek innovative solutions to navigate economic challenges. The success of this initiative could set a precedent for other companies in the sector, influencing marketing strategies and operational models across the industry.
What's Next?
Mondelez plans to expand the use of the AI tool to other brands and regions, including Lacta chocolate and Oreo in Brazil, and Cadbury in the UK. The company will continue to monitor the tool's output to ensure compliance with its content guidelines. As the tool evolves, Mondelez may explore more complex video productions, potentially increasing savings and enhancing marketing effectiveness. The industry will likely watch closely to see how this technology impacts Mondelez's market performance and whether similar strategies will be adopted by competitors.
Beyond the Headlines
The use of AI in marketing raises questions about the balance between automation and human oversight. Mondelez's approach, which includes human review of AI-generated content, underscores the importance of maintaining ethical standards and cultural sensitivity in advertising. This development also prompts discussions about the future of creative jobs in marketing, as AI tools become more prevalent. The long-term implications could include shifts in employment patterns and the need for new skill sets in the workforce.
