Oreo-maker Mondelez to use new generative AI tool to slash marketing costs

NEW YORK: 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.

The packaged-food manufacturer began developing the tool last year with ad company Publicis Groupe and IT firm Accenture. Mondelez expects that the tool 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.

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 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 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 setup 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 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, overconsumption, emotionally manipulative language and the use of offensive stereotypes, according to a document shared by the Chicago-based company.