What's Happening?
Mondelez International, a leading snack manufacturer, is leveraging a new generative AI tool to significantly reduce the costs associated with producing marketing content. The company, known for brands like Cadbury and Oreo, has collaborated with Publicis
Groupe and Accenture to develop this tool, which aims to cut production costs by 30% to 50%. The AI tool is expected to create short TV ads ready for airing by the next holiday season and potentially for the 2027 Super Bowl. Mondelez has invested over $40 million in this technology, which is part of a broader strategy to adopt AI in response to economic pressures such as tariffs and reduced consumer spending. The tool is already being used for social media content in the U.S. and Germany, with plans to expand its use to other markets.
Why It's Important?
The adoption of AI by Mondelez highlights a significant shift in the marketing strategies of major consumer goods companies. By reducing reliance on traditional advertising agencies, Mondelez can streamline its marketing processes and reduce costs, which is crucial in a competitive market with shrinking consumer budgets. This move also reflects a broader industry trend, as other companies like Kraft Heinz and Coca-Cola explore AI for advertising. The potential cost savings and increased efficiency could provide Mondelez with a competitive edge, allowing for more agile and targeted marketing campaigns. However, the use of AI in marketing also raises questions about the authenticity and emotional impact of AI-generated content, as seen in past criticisms of AI-created ads.
What's Next?
Mondelez plans to expand the use of its AI tool to other brands and markets, including Lacta chocolate and Oreo in Brazil, and Cadbury in the UK. The company will continue to monitor and refine the tool's output to ensure compliance with its guidelines, which prohibit content that promotes unhealthy habits or uses offensive stereotypes. As the tool's capabilities grow, Mondelez may further reduce its marketing costs and enhance its ability to quickly adapt to market changes. The success of this initiative could influence other companies to adopt similar technologies, potentially transforming the landscape of marketing in the consumer goods industry.
Beyond the Headlines
The integration of AI in marketing raises ethical considerations, particularly regarding the portrayal of human likenesses and the potential for emotionally manipulative content. Mondelez's decision to avoid using human likenesses in its AI-generated content reflects an awareness of these concerns. Additionally, the company's guidelines aim to prevent the promotion of unhealthy behaviors, highlighting the need for responsible AI use in marketing. As AI technology continues to evolve, companies will need to balance innovation with ethical considerations to maintain consumer trust.
