# Advertising

> Source: https://aiwiki.ai/wiki/advertising
> Updated: 2026-05-13
> Categories: AI Tools & Products
> From AI Wiki (https://aiwiki.ai), a free encyclopedia of artificial intelligence. Quote with attribution.

*See also: [Advertising ChatGPT Plugins](/wiki/advertising_chatgpt_plugins)*

**Advertising** is one of the largest commercial applications of [artificial intelligence](/wiki/artificial_intelligence). AI now touches almost every step of the modern ad cycle: deciding which impression to buy in a [real-time bidding](/wiki/real_time_bidding) auction, generating the image and copy that appears in that impression, choosing which audience segment to target, classifying the surrounding content for [brand safety](/wiki/brand_safety), and measuring the campaign's effect on sales. The industry has moved through three rough technical eras: programmatic buying with predictive bidding models, [machine learning](/wiki/machine_learning) auction systems integrated into walled-garden platforms such as [Google Ads](/wiki/google_ads) and [Meta](/wiki/meta) Ads, and a generative phase that began around 2022 in which [large language models](/wiki/large_language_model) and [text-to-image](/wiki/text_to_image) tools produce the creative itself.

The shift has been fast and disorderly. Brands such as Heinz and Coca-Cola used generative AI to win press coverage as early as 2022 and 2023. By 2024 the first major commercials made almost entirely with [OpenAI](/wiki/openai)'s [Sora](/wiki/sora) and other diffusion video tools were airing during prime ad festivals. The same year saw fierce public backlash against Coca-Cola's AI-generated remake of its "Holidays Are Coming" spot and growing concern about AI-generated political ads, deepfake robocalls, and AI "influencers" with millions of followers. Regulators in the United States, the European Union, and elsewhere responded with disclosure rules.

## Overview

AI in advertising covers a wide range of overlapping technologies and use cases. The core categories are:

| Layer | What AI does | Representative products |
| --- | --- | --- |
| Programmatic buying | Predicts the value of each impression and bids in real time. | [The Trade Desk](/wiki/the_trade_desk), [Google Display & Video 360](/wiki/display_video_360), [Amazon DSP](/wiki/amazon_dsp), Yahoo DSP |
| Auction-time bidding inside walled gardens | Sets prices and targeting per auction inside platform inventory. | Google Smart Bidding, Meta auction system, TikTok Smart+ |
| Performance campaigns | Single goal-based campaigns that span an entire platform. | Google Performance Max, Meta Advantage+, Pinterest Performance+, Snap Smart Campaign Solutions |
| Generative creative | Produces images, video, copy, voice, and variations. | [Adobe Firefly](/wiki/adobe_firefly), [DALL-E](/wiki/dall_e), [Midjourney](/wiki/midjourney), [Stable Diffusion](/wiki/stable_diffusion), Sora, Meta Advantage+ Creative |
| Virtual humans | Synthetic models, influencers, and brand personas. | Lil Miquela, imma, Shudu, Aitana López |
| Brand safety and measurement | Classifies content and detects fraud and ad context. | [DoubleVerify](/wiki/doubleverify), [Integral Ad Science](/wiki/integral_ad_science), Pixalate, Zefr |
| Marketing mix modeling | Estimates the sales lift of each channel. | Meta Robyn, Google Lightweight MMM, commercial MMM vendors |

These layers feed each other. A generative tool may produce 200 variations of an image. An auction-time bidder then decides which variation to show which user. A brand-safety system decides which placements are eligible at all. A mix model estimates whether the resulting spend actually moved sales.

## History

### The programmatic era

Programmatic advertising as a recognisable industry started with display banner auctions. Right Media, founded by Michael Walrath in 2003, launched the Right Media Exchange in April 2005 and was sold to [Yahoo](/wiki/yahoo) in 2007 for about $680 million. The Right Media Exchange is widely cited as the first online ad exchange. Its CTO Brian O'Kelley left after the Yahoo acquisition and co-founded [AppNexus](/wiki/appnexus) in 2007. He is often credited with commercialising real-time bidding (RTB) and is sometimes called the "godfather of ad tech".

The years 2007 to 2011 saw a wave of new platforms: [Google](/wiki/google) acquired DoubleClick in 2008 and built it into what is now Google Ad Manager and Display & Video 360. MediaMath, founded in 2007, marketed itself as the first demand-side platform. Quantcast, founded in 2006 by Konrad Feldman, brought predictive modelling to audience targeting. The Trade Desk was founded in 2009 by Jeff Green and Dave Pickles, both veterans of Microsoft adECN, and built a self-serve DSP that became dominant in the open web. Supply-side platforms such as PubMatic (founded 2006), OpenX (founded 2008), Rubicon Project (founded 2007, renamed Magnite in 2020 after the merger with Telaria), and Index Exchange (founded 2001, refocused on advertising) sat on the publisher side.

Machine learning lived inside these systems from the start. Bidders had to estimate click-through and conversion rates in milliseconds, and the only feasible approach was a logistic-regression or gradient-boosted model trained on prior auctions. That same machinery later supported algorithmic creative selection and audience expansion. AppNexus shipped a machine-learning optimisation engine called Xandr Invest after AT&T rebranded the company in 2018. Microsoft acquired Xandr in 2021 and consolidated it under Microsoft Advertising in 2023, and the Microsoft Invest legacy stack is being wound down in early 2026.

### Smart bidding and walled gardens

The second phase moved the math from independent DSPs into the platforms themselves. Google introduced Smart Bidding under that brand in 2016 as a family of auction-time strategies. Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value all sit inside Smart Bidding, with the system pricing each auction using device, time, location, audience, and other live signals. Smart Bidding became the default recommendation for most Google Ads campaigns by the late 2010s.

Google then attacked the older idea of tightly controlled keyword targeting. The company's broad match keyword type was rebuilt around large language models. Google says broad match is 73% more accurate at predicting conversion intent than in 2023, and 62% of advertisers running Smart Bidding now use broad match as their primary match type.

Meta took a similar path on the social side. Its detailed targeting controls were progressively replaced by an automated audience system that picked the buyer for each impression using a deep learning ranker.

### The generative era

The third phase started when text-to-image and text-to-video models became good enough for commercial creative. Heinz's "AI Ketchup" campaign in July 2022 used DALL-E 2 to draw "ketchup" and discovered that almost every output looked like a Heinz bottle. The Cosmopolitan magazine cover generated by DALL-E 2 with Karen X. Cheng appeared in June 2022. By 2023 Coca-Cola had launched the "Create Real Magic" platform built on GPT-4 and DALL-E in partnership with [OpenAI](/wiki/openai) and Bain & Company, and aired its "Masterpiece" television spot, which combined live action and [Stable Diffusion](/wiki/stable_diffusion) frame transitions. By 2024 Toys "R" Us premiered the first major brand film made with Sora, and Coca-Cola produced an AI-generated remake of its "Holidays Are Coming" Christmas ad. The generative era also drove agency reorganisations, NVIDIA partnerships, and the first wave of cost cuts at companies that began running AI-only campaigns.

## Programmatic advertising

[Programmatic advertising](/wiki/programmatic_advertising) is the automated buying and selling of digital ad inventory. It currently makes up the majority of digital display spending worldwide. The main pieces are:

- **Ad exchanges:** auction venues that match buyers and sellers. Major exchanges include Google AdX (inside Google Ad Manager), OpenX, PubMatic, Magnite, and Index Exchange.
- **Demand-side platforms (DSPs):** software that lets advertisers and agencies bid on impressions across many exchanges. The Trade Desk, Google Display & Video 360 (DV360), Amazon DSP, Yahoo DSP, and Microsoft Invest are the largest examples. MediaMath was a pioneer in this category and filed for bankruptcy in 2023; the brand was relaunched in 2024 under Infillion.
- **Supply-side platforms (SSPs):** software that helps publishers monetise their inventory. PubMatic, OpenX, Magnite, and Index Exchange are the dominant independent SSPs.
- **Ad servers:** systems that deliver the chosen creative to the user's browser. Google Ad Manager is the most widely used. Microsoft Invest (formerly Xandr/AppNexus) is shutting down in February 2026, with Amazon DSP listed as Microsoft's preferred migration partner.

AI lives at every layer. Bidders use predictive models trained on conversion data to estimate the value of each user view. SSPs use machine learning to choose the floor price and to predict which buyer is most likely to win. Ad servers use models to choose which creative to deliver. Fraud detection and brand-safety filtering, described below, also run on AI.

The Trade Desk has built much of its product on a system it calls Koa, which surfaces machine-learning recommendations to traders. Quantcast uses its measurement panel to model audience interests directly. Amazon DSP uses Amazon's own retail purchase data as a training signal for prediction.

## Performance campaigns

The largest advertising platforms have all converged on a single product format: a goal-based campaign that uses AI to handle bidding, targeting, placement, and creative selection across the platform's full surface area. The naming differs by vendor.

| Platform | Product | Launched | Notes |
| --- | --- | --- | --- |
| Google Ads | Performance Max | General availability November 2021 | Runs across Search, Display, YouTube, Discover, Gmail, and Maps. Replaced Smart Shopping and Local campaigns in 2022. |
| Meta | Advantage+ Shopping Campaigns (ASC) | August 15, 2022 | Automates up to 150 creative combinations and targets buyers using Meta's deep learning models. |
| Meta | Advantage+ Creative | October 2023 | Adds generative AI features for background generation, image expansion, and text variations. Full global rollout completed during 2024. |
| Microsoft Advertising | Performance Max | July 2023 | Brought the Performance Max format into Bing and the Microsoft Audience Network. Microsoft launched a follow-on AI Max for Search pilot in 2025. |
| TikTok | Smart+ | October 2024 | An AI-driven performance suite covering web, app, catalog, and lead campaigns. Builds on earlier Smart Performance Campaigns. |
| Pinterest | Performance+ | Public launch October 2024 (preview at Cannes Lions 2024) | Halves the number of inputs an advertiser provides, applies machine learning to targeting and budget allocation. |
| Snap | Smart Campaign Solutions (Smart Bidding, Smart Budget, Smart Audience, Smart Ads) | 2024 onward, with successive features and AI Sponsored Snaps in 2025-2026 | Snap's answer to Performance Max and Advantage+. |

The trade-off in all of these products is the same. The advertiser gives up most of the manual control, in exchange for performance gains driven by the platform's own data and models. Pinterest reported that early Performance+ tests improved CPA by at least 10% in conversion campaigns. Meta's own A/B testing put Advantage+ Shopping Campaigns at a 12% lower cost per purchase than control campaigns. TikTok said its Smart+ web objective improved return on ad spend by 52% during closed beta tests and dropped cost per acquisition by 36% versus manual campaigns.

## Generative creative tools

Generative AI has shifted from a curiosity to a default part of the ad production pipeline in less than three years. The most widely used systems include:

- **Adobe Firefly.** Released in beta in March 2023 and made commercially available the same year. Firefly powers Generative Variations and is integrated into [Photoshop](/wiki/photoshop), [Illustrator](/wiki/illustrator), Express, Experience Manager, and the Firefly Services API. Adobe markets the model as commercially safe, since it is trained on licensed Adobe Stock content and public-domain material.
- **Meta Advantage+ Creative.** Meta launched generative AI features for advertisers in October 2023, starting with background generation. Image expansion, text variations, and (from May 2024) full image generation followed. Casetify reported a 13% increase in return on ad spend after testing background generation.
- **Google Demand Gen.** Google added generative image tools to Demand Gen campaigns in April 2024. The system creates ad images from text prompts and now includes "Animated images" and "Adaptable designs" that overlay branded text. The same models are surfaced in Performance Max.
- **WPP and NVIDIA.** [WPP](/wiki/wpp), the world's largest agency holding company, announced a partnership with [NVIDIA](/wiki/nvidia) in May 2023 at Computex Taipei to build a generative AI content engine on NVIDIA Omniverse Cloud and NVIDIA Picasso. The engine creates photoreal 3D product twins and personalised brand content. In July 2024 at SIGGRAPH, WPP and NVIDIA showed how new NIM microservices for OpenUSD would be used to generate 3D landscapes for ads.
- **Publicis CoreAI.** [Publicis Groupe](/wiki/publicis_groupe) announced CoreAI in early 2024, an in-house generative platform trained on data from Epsilon, Publicis Sapient, CitrusAd, Profitero, and the older Marcel platform. Publicis initially committed €300 million and later expanded the program toward a €1 billion target. CoreAI integrates Adobe Firefly Services for creative generation.
- **Klarna's internal stack.** Klarna used Midjourney, DALL-E, and Firefly to generate over 1,000 images in the first quarter of 2024 alone. It said its image production cycle dropped from six weeks to seven days and that AI cut sales and marketing spend by 11%, with $10 million in annual run-rate savings from AI-driven marketing and external agency budgets cut by 25%. By late 2024 Klarna had launched roughly 30 AI-built campaigns.

Video generation entered the same workflow. By 2024 OpenAI's Sora, [Runway](/wiki/runway)'s Gen-2 and Gen-3, [Google DeepMind](/wiki/google_deepmind)'s [Veo](/wiki/veo), and Pika Labs were all being used to produce social and broadcast spots, often for shorter cuts and product demos.

## Notable AI ad campaigns

| Campaign | Brand | Year | Agency or partner | AI technique |
| --- | --- | --- | --- | --- |
| AI Ketchup | Heinz (Kraft Heinz) | July 2022 | Rethink (Toronto/Montreal/Vancouver) | DALL-E 2 prompts to draw "ketchup"; many results resembled Heinz bottles. Won a Clio Gold in 2023. |
| First AI magazine cover | Cosmopolitan | June 2022 | Karen X. Cheng with OpenAI | DALL-E 2 generated the cover image in roughly 20 seconds. |
| Shah Rukh Khan My Ad / Not Just A Cadbury Ad 2.0 | Cadbury (Mondelez India) | Diwali 2021 | Ogilvy India, Wavemaker, Rephrase.ai | AI voice and face synthesis let more than 2,000 small shops insert their name into a Shah Rukh Khan endorsement. |
| Create Real Magic | Coca-Cola | March 2023 | OpenAI, Bain & Company | First platform combining GPT-4 and DALL-E. Fans could remix Coca-Cola brand assets. Followed by a Real Magic Creative Academy in Atlanta. |
| Masterpiece | Coca-Cola | March 2023 | Electric Theatre Collective | Live action plus Stable Diffusion frame transitions between artworks. Won a Yellow Pencil at the D&AD Awards 2023 for Visual Effects. |
| Vogue Singapore Roots cover | Vogue Singapore | March 2023 | Varun Gupta | Used [Midjourney](/wiki/midjourney) and DALL-E to create three AI cover models, Aadhya, Melur, and Faye, inspired by early 20th-century Southeast Asian portraits. |
| The Origin of Toys "R" Us | Toys "R" Us | June 2024 (Cannes Lions premiere) | Native Foreign | First major brand film made primarily with OpenAI's Sora. About 80% to 85% AI-generated with VFX on top. |
| Holidays Are Coming (AI remake) | Coca-Cola | November 2024 | Secret Level (Los Angeles), Silverside AI (San Francisco), Wild Card (Kuala Lumpur) | Four generative models, 10,000 frames, 5,000 video segments, over 40 creatives across four continents. Produced in two months. |
| 30 AI campaigns | Klarna | 2024 | Internal teams using Midjourney, DALL-E, Firefly, and an in-house Copy Assistant | Said to have replaced significant agency spend; trimmed image production cycle from six weeks to one. |
| Beauty Genius | L'Oreal Paris | Launched October 2024, showcased at CES January 2025 | L'Oreal internal | Combines generative AI, computer vision, augmented reality, and 10 LLMs. Trained on 6,000 images and 10,000 products. |

## AI-generated influencers and virtual models

Virtual influencers existed before generative AI, but generative tools have made them faster and cheaper to operate. The earliest wave used 3D rendering and photo compositing. The current wave uses [diffusion models](/wiki/diffusion_model), animation systems, and synthetic voice tools.

| Persona | Creator or studio | Launched | Notes |
| --- | --- | --- | --- |
| [Lil Miquela](/wiki/lil_miquela) | Trevor McFedries and Sara Decou, Brud | April 2016 | Half-Brazilian, half-Spanish 19-year-old Los Angeles persona. Brud raised $6 million in 2018. Endorsement deals with Prada, Calvin Klein, Samsung, and others. |
| [Shudu](/wiki/shudu) | Cameron-James Wilson, The Diigitals | April 2017 | Marketed as the world's first digital supermodel. Initially built in 3D modelling tools after Wilson became frustrated with hand-painting Barbies. |
| imma | Aww Inc. (Koichi Kishimoto, Takayuki Moriya) | 2018 | Japan's first "full-fledged" virtual model. Brand deals include IKEA, Porsche Japan, Dior, Valentino, Calvin Klein, Nike, and Nomura. Aww partnered with NVIDIA in 2024 to upgrade an interactive "AI imma". |
| Aitana López | The Clueless agency (Rubén Cruz), Barcelona | July 2023 | Spain's first hyper-realistic AI influencer. Reportedly earns €3,000 to €10,000 per month. Promoted by Amazon, Razer, and Freepik. |
| Esther Olofsson | RauwCC, Rotterdam | Existed earlier; converted to AI generation in December 2022 | After the relaunch, Stable Diffusion produces her images, ChatGPT writes her captions, Movio handles lip sync, and Replica Studio generates her voice. |
| Cosmopolitan AI cover | Karen X. Cheng with Cosmopolitan and OpenAI | June 2022 | A magazine cover rather than a recurring influencer, but widely cited as the first AI cover for a mass-market publication. |
| Vogue Singapore avatars | Vogue Singapore with Varun Gupta | March 2023 | Three AI avatars on Vogue Singapore's Roots issue. |

Virtual humans introduce a set of unsettled questions for the industry. Critics argue that hyper-polished AI bodies reinforce narrow beauty norms and that AI influencers displace real creators, especially women whose income depends on visibility. Trade unions have pushed for stronger disclosure when sponsored content is computer-generated.

## Brand safety and measurement

Brand safety and ad verification became a distinct industry segment after high-profile YouTube boycotts in 2017, when major advertisers found their ads appearing alongside extremist content. Most of the work in this segment is classification: deciding what a piece of inventory contains and whether it is suitable for a given brand.

- **DoubleVerify (DV).** A New York verification firm. DV's Universal Content Intelligence engine classifies inventory across video, audio, image, and text. DoubleVerify launched post-bid brand safety and suitability measurement on [Facebook](/wiki/facebook) and [Instagram](/wiki/instagram) Feeds and Reels in January 2024.
- **Integral Ad Science (IAS).** A direct competitor to DV. IAS uses frame-by-frame multimedia analysis to classify content. IAS became a measurement partner for Facebook in 2017 and now operates on TikTok, Meta, YouTube, and several other walled gardens.
- **Pixalate.** Focuses on invalid traffic, fraud, and connected TV inventory.
- **Zefr.** Specialises in YouTube and other open platforms. Zefr's brand safety and suitability reporting product is generally available on YouTube in North America. It received MRC accreditation for content-level brand safety classification. Zefr uses large language models and AI agents in combination with human review.

The systems share a common pattern. A classifier first scores every piece of inventory across the relevant brand-safety taxonomy, such as the Global Alliance for Responsible Media (GARM) categories: adult content, arms, crime, death, debated social issues, hate speech, misinformation, obscenity, terrorism, illegal drugs, and so on. Suitability is then layered on top. A children's brand may avoid all GARM categories, while a financial services brand may tolerate some of them. The classifier output drives bid filtering at the DSP layer.

The rise of made-for-advertising (MFA) sites and AI-generated content has put new pressure on classifiers. IAS and DV both report that they specifically detect generative AI content and "slop sites" designed to harvest programmatic spend. Brian O'Kelley, the AppNexus co-founder, launched Scope3 in 2021. Scope3 began as a carbon-emissions company for advertising but has expanded into AI-driven brand suitability in direct competition with DV and IAS.

### Attribution and marketing mix modeling

The death of [third-party cookies](/wiki/third_party_cookie) has pushed marketers back toward older statistical techniques. Marketing mix modeling (MMM) uses econometric regression to attribute sales to marketing channels using aggregate data.

- **Meta Robyn.** An open-source MMM package released by Meta Marketing Science in 2021. Robyn uses ridge regression, multi-objective evolutionary algorithms for hyperparameter optimisation, time-series decomposition for trend and season, and gradient-based optimisation for budget allocation. It is available in R and Python. As of late 2025 it had over 1,400 GitHub stars and more than 121,000 downloads.
- **Google Lightweight MMM and Meridian.** Google released Lightweight MMM in 2022 as a Bayesian MMM library built on JAX. In 2024 Google released a more capable successor called Meridian.
- **Commercial MMM platforms.** Kevel, Mass Analytics, Nielsen, and a number of consultancies sell hosted MMM products that wrap similar techniques with AI-driven data preparation.

Google's wider response to deprecating third-party cookies was the [Privacy Sandbox](/wiki/privacy_sandbox). The Topics API used on-device machine learning in Chrome to infer broad interest categories, such as sports or travel, without exposing detailed browsing data. In April 2025 Google announced it would keep third-party cookies in Chrome rather than removing them, and in 2025 it deprecated the Topics, Protected Audience (PAAPI), and several other Privacy Sandbox APIs. Meta runs its own privacy stack, including Aggregated Event Measurement, that relies on machine learning to model conversions when individual user data is unavailable.

## DOOH and emerging formats

Digital out-of-home (DOOH) advertising covers billboards, transit screens, retail panels, and other physical displays. Programmatic DOOH lets buyers purchase those screens in real time, much like a banner ad. The largest specialist in this category is Vistar Media. Vistar runs a DSP, SSP, ad server, player, device-management platform, and traditional OOH planning software, and lets buyers connect to DOOH screens worldwide. Its Dynamic Creative product changes images and messaging based on contextual data such as time of day, weather, or local traffic.

Generative AI is creeping into DOOH along two paths. The first is creative production: brands generate dozens of region-specific or weather-specific variants from a single master image. The second is interactive ad units, such as Sponsored AI Lenses on Snap and AI Sponsored Snaps that let users converse with a brand's agent inside a placement. Snap launched Sponsored AI Lenses powered by its own generative AI tech and previewed AI Sponsored Snaps that integrate conversational agents into ad units in 2025-2026.

Microsoft is pushing a related concept it calls the "agentic web," with ad surfaces inside Copilot. Microsoft's Offer Highlights format surfaces selling points such as free shipping inside an AI conversation. Best Buy was an early Offer Highlights partner.

## Disclosure and regulation

The widening use of generative AI in political and commercial advertising has triggered an active period of rule-making.

- **Google Ads political content policy.** Google updated its political content policy in September 2023 to require advertisers to disclose when election ads include synthetic content that depicts "real or realistic-looking people or events" in a way that could mislead viewers. The disclosure must be clear and conspicuous. Background edits, colour correction, and resizing are exempt. The policy took effect in mid-November 2023.
- **Meta political ads policy.** Meta announced a similar disclosure rule in November 2023 that took effect on January 1, 2024. Advertisers running social issue, election, or political ads must disclose any digitally created or altered realistic content of a person or event, even when third-party AI tools generated the asset.
- **FCC ruling on AI in political robocalls.** On February 8, 2024, the U.S. Federal Communications Commission ruled unanimously that AI-generated voices in robocalls are "artificial" under the Telephone Consumer Protection Act, making them illegal. The vote followed a deepfake robocall imitating President Joe Biden's voice that urged New Hampshire primary voters not to cast ballots. The FCC proposed a $6 million fine against political consultant Steve Kramer, finalised a $6 million forfeiture order against him on September 26, 2024, and reached a $1 million settlement with Lingo Telecom for transmitting the calls.
- **State-level laws.** California and Texas passed early political deepfake laws in 2019, followed by Minnesota, Washington, and Michigan in 2023. As of January 2026, 28 U.S. states had enacted laws on deepfakes in political communications. Texas's law applies to state-level races only and within 30 days of an election. California's package of 2024 laws (AB 2655, AB 2839, AB 2355) was partly blocked by a federal judge on October 2, 2024 on First Amendment grounds.
- **EU AI Act and Digital Services Act.** The EU AI Act, adopted in 2024, requires labelling of synthetic content used in advertising and content moderation. The Digital Services Act also imposes transparency requirements on online platforms regarding ad targeting.

In the commercial space, the Federal Trade Commission has signaled that AI-generated endorsements or fake reviews violate existing law on deceptive practices. Several agency holding companies, including WPP and Publicis, have published internal AI usage policies covering disclosure, training data, and IP rights.

## Notable controversies

### Toys "R" Us Sora ad

In June 2024 Toys "R" Us Studios premiered "The Origin of Toys 'R' Us," a short brand film, at the Cannes Lions International Festival of Creativity. The film tells the story of company founder Charles Lazarus and the giraffe mascot Geoffrey. The agency Native Foreign, whose chief creative had alpha access to Sora, produced the spot in a few weeks. By Native Foreign's account roughly 80% to 85% of the imagery was AI-generated, with traditional VFX layered on top.

The ad was the first major brand film made primarily with Sora, and the trade press treated it as a milestone. Reaction in the wider public was harsher. Critics on Fast Company, Reddit, and Twitter said the film had inconsistent character continuity, an uncanny lighting feel, and an unsettling tone for what was meant to be a nostalgic origin story. The ad also reignited a long-running concern about job displacement in commercial production. Independent commercial directors, VFX artists, and union groups argued that high-profile uses of Sora would put pressure on traditional crews.

Toys "R" Us's public response framed the ad as a creative experiment rather than a finished broadcast spot. The film never aired as a network commercial in the United States.

### Coca-Cola Christmas ad 2024

Coca-Cola's 2024 holiday campaign was a remake of the company's 1995 "Holidays Are Coming" spot, which features red trucks driving through snowy towns delivering bottles. The new version was built by three AI studios: Secret Level in Los Angeles, Silverside AI in San Francisco, and The Wild Card in Kuala Lumpur. The studios used four different generative video models, rendered 10,000 frames, produced 5,000 video segments, and worked with over 40 creatives across four continents. Coca-Cola said that what would have been a 12-month project shrank to two months.

The ad aired in November 2024. The reaction was sharp and largely negative. Reddit and X users called the spot "soulless" and "devoid of any actual creativity." Animator Alex Hirsch, creator of the Disney series Gravity Falls, posted a parody criticism. Marketing critics pointed to visual artefacts: trucks with the wrong number of wheels, characters whose faces shift between frames, and unnaturally smooth surfaces.

Coca-Cola defended the campaign. The company said in a statement that it "remains dedicated to creating the highest level of work at the intersection of human creativity and technology" and pointed to the project as part of its broader push to integrate AI into its creative toolkit. Internal metrics presented to trade press argued that the spot generated more impressions than expected. System1 Group, a creative effectiveness firm, reported in its own analysis that the ad still drove emotional positivity on tracking measures.

Coca-Cola repeated the experiment with a refreshed AI-generated "Holidays Are Coming" spot in late 2025, which faced a similar backlash.

Both controversies have become reference points for the wider debate about what generative AI does to ad craft. Defenders argue that the cost and speed advantages are too large to ignore. Critics argue that the medium is not yet good enough to carry the emotional weight of category-defining brand work and that audiences detect the difference.

## See also

- [Advertising ChatGPT Plugins](/wiki/advertising_chatgpt_plugins)
- [Programmatic advertising](/wiki/programmatic_advertising)
- [Real-time bidding](/wiki/real_time_bidding)
- [Brand safety](/wiki/brand_safety)
- [Sora](/wiki/sora)
- [DALL-E](/wiki/dall_e)
- [Midjourney](/wiki/midjourney)
- [Stable Diffusion](/wiki/stable_diffusion)
- [Adobe Firefly](/wiki/adobe_firefly)
- [Lil Miquela](/wiki/lil_miquela)
- [Deepfake](/wiki/deepfake)
- [Generative AI](/wiki/generative_ai)
- [Privacy Sandbox](/wiki/privacy_sandbox)

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29. "Coke launches Create Real Magic AI art contest using GPT-4 and DALL-E," The Drum, March 2023.
30. "A Coca-Cola bottle travels through artistic history in AI-inspired Masterpiece ad," Marketing Beat, May 2023.
31. "Breakdown of Coca-Cola Commercial Made with Stable Diffusion Revealed," 80 Level, 2023.
32. "Shah Rukh Khan My Ad," Ogilvy case page.
33. "Cadbury and Shah Rukh Khan Enlist the Help of AI to Promote Hundreds of Small Businesses This Diwali," LBB Online, 2021.
34. "AI behind the Diwali 2021 Not Just a Cadbury ad!" LearnOpenCV.
35. "Toys 'R' Us Studios and Native Foreign Use OpenAI's Sora to Narrate the Origin Story of Beloved Toy 'R' Us Brand," PR Newswire, 2024.
36. "Toys 'R' Us made an ad almost entirely AI," CNN Business, June 25, 2024.
37. "The new Toys R Us commercial was made with AI, and it shows," Fast Company, 2024.
38. "Coca-Cola causes controversy with AI-generated ad," NBC News, 2024.
39. "How Coca-Cola's AI Holiday Ad Went From Praise To Rage," AdWeek, 2024.
40. "Coca-Cola: Holidays Are Coming (AI-Generated)," Ads of the World.
41. "Coca-Cola Holidays," Silverside AI project page.
42. "L'Oréal showcases AI-powered advisor Beauty Genius and more at CES," Campaign US, January 2024.
43. "Case Study: L'Oréal's Beauty Genius App," AI Expert Network.
44. "Miquela," Wikipedia; "Trevor McFedries," Wikipedia.
45. "Aitana López," Wikipedia.
46. "imma," Aww Inc. and Virtual Humans coverage.
47. "Shudu Gram," Diigitals and Virtual Humans coverage.
48. "Esther Olofsson," RauwCC and Virtual Humans coverage.
49. "DALL-E 2 Makes Its First-Ever Magazine Cover for Cosmopolitan," Cosmopolitan, June 2022.
50. "Welcome to the altiverse: AI avatars grace the cover of Vogue Singapore's March Issue," Vogue Singapore, 2023.
51. "Zefr Makes Brand Safety, Suitability Reporting Generally Available to YouTube Advertisers," Zefr press release.
52. "Zefr Receives MRC Accreditation for Content-Level Brand Safety and Suitability Reporting on YouTube," Business Wire, 2026.
53. "IAS and DoubleVerify expand Brand Safety controls on Meta platforms," PPC Land.
54. "Twitter partners with DoubleVerify and IAS on brand safety initiative," TechCrunch, January 2023.
55. "Robyn (facebookexperimental/Robyn)," GitHub.
56. "What is open-source marketing mix modeling," Digiday.
57. "Google Privacy Sandbox" and "Privacy Sandbox: What Is the Topics API?" Index Exchange.
58. "Google to require disclosures of AI content in political ads," CNN Business, September 2023.
59. "Meta will start requiring disclosures for political ads manipulated with AI," TechCrunch, November 2023.
60. "FCC Proposes $6 Million Fine for Deepfake Robocalls Around NH Primary," Federal Communications Commission, 2024.
61. "FCC Issues $6M Fine For N.H. Robocalls," FCC, September 2024.
62. "AI deepfake policy in Texas," Ballotpedia.
63. "California Enacts New Laws to Combat AI-Generated Deceptive Election Content," Skadden, September 2024.
64. "Regulating AI Deepfakes and Synthetic Media in the Political Arena," Brennan Center for Justice.
65. "Vistar Media homepage and blog" (programmatic DOOH overview).
66. "Snap's AI play targets the advertisers tired of Meta and Google," Digiday, 2025.
67. "How broad match is being supercharged by new AI," Think with Google.
68. "Google's Smart Bidding will soon include ability to set Target CPA by device in AdWords," Search Engine Land, July 2016.