What's Happening?
Mondelez International, the maker of Oreo cookies, is employing a new generative AI tool to significantly cut marketing costs by 30% to 50%. Developed in collaboration with Accenture, the tool is designed
to produce marketing content more efficiently, including short TV ads and social media content. Mondelez has invested over $40 million in the tool, which is already being used for Chips Ahoy cookies in the U.S. and Milka chocolate in Germany. The AI-generated content includes animations and videos tailored to different consumer demographics. Mondelez plans to expand the use of the tool to other brands and regions, including Lacta chocolate and Oreo in Brazil, and Cadbury in the UK.
Why It's Important?
The adoption of generative AI by Mondelez highlights the growing trend of using advanced technologies to optimize marketing strategies and reduce costs. By leveraging AI, Mondelez can streamline content production, reduce reliance on advertising agencies, and accelerate the development and launch of new products. This approach not only enhances efficiency but also allows for more targeted and personalized marketing campaigns. As consumer goods companies face economic challenges such as tariffs and shrinking budgets, AI offers a viable solution to maintain competitiveness and profitability. The success of Mondelez's AI initiative could influence other companies to explore similar technologies.
What's Next?
Mondelez plans to further integrate the AI tool into its marketing operations, potentially using it for more elaborate video content and major advertising events like the Super Bowl. The company will continue to monitor and refine the tool's output to ensure compliance with ethical standards and avoid any mishaps. As AI technology evolves, Mondelez may explore additional applications, such as predictive analytics and consumer behavior modeling, to enhance marketing strategies. The broader adoption of AI in marketing could lead to industry-wide changes, with companies seeking innovative ways to engage consumers and optimize costs.
Beyond the Headlines
The use of AI in marketing raises questions about the impact on creativity and human involvement in content production. While AI offers efficiency and cost savings, it may also lead to concerns about the authenticity and emotional resonance of marketing content. Mondelez's decision to avoid human likenesses in AI-generated content reflects a cautious approach to maintaining consumer trust and avoiding negative perceptions. As AI becomes more prevalent in marketing, companies must navigate ethical considerations and ensure that technology enhances rather than detracts from the consumer experience.
