The trend: Generative AI is rapidly shifting from experimental to essential in advertising, redefining how creative work is produced and distributed. Nearly 90% of marketers spending $1 million or more on digital video last year are already using or plan to use AI tools, per the Interactive Advertising Bureau.

Use cases are broadening: In North America, 38% of marketers use AI for content ideation and 36% for personalization at scale, according to Growthloop and Ascend2.

Recent campaigns show the change in action. Kalshi created a viral NBA Finals ad in just two days for under $2,000 using Google’s Veo 3 and OpenAI, while Coign produced a national TV ad in half a day for less than 1% of a traditional shoot’s budget. New tools like Waymark Cinematic are enabling narrative-driven ads, while Betr’s connected TV spot featured an AI-generated Jake Paul blending synthetic and real voice in a high-production-value execution.

Why it matters:

• Production costs are collapsing. Ads that once required six-figure budgets and weeks of planning can now be produced in hours. This opens national TV and streaming opportunities to smaller advertisers who previously couldn’t compete.
• Experimentation is accelerating. Audience customization is leading AI use cases for video ad versioning, with 42% of marketers using it to tailor creative to different demographics. This allows testing of formats, geographies, and messages at a pace not possible with traditional production.
• Adoption is only climbing. Within a year, 68% of North American marketers expect to use AI for insights and recommendations, while 63% will use it for content generation. Adoption curves are steepening, encouraged by platforms like Meta, TikTok, and ITV.
• Trust is fragile. Consumer skepticism looms large: Over 30% of US adults in every age group say AI in ads makes them less likely to choose a brand, a figure that jumps to 42% among those 65 and above. At the same time, surveys show younger audiences are more open to contextual and localized creative, highlighting generational divides.
• Human craft still matters. Even as AI gains ground, US teens and adults overwhelmingly say humans are better at developing music (63%) and writing dialog (59%), reminding advertisers that automation cannot yet replace cultural nuance.

Our take: GenAI is democratizing ad production, compressing timelines, and enabling levels of customization that would have been cost-prohibitive just two years ago. Smaller advertisers can now compete with larger rivals, while big brands can personalize campaigns across audiences and markets at scale.

But efficiency comes with trade-offs. Consumer wariness, especially among older demographics, and persistent belief in human creative superiority underscore that trust and craftsmanship remain essential. The next phase will test whether advertisers can combine AI’s cost savings and speed with authentic, culturally resonant creative. Those who succeed will not only reshape digital video but could also disrupt the $250 billion TV ad market and the broader media production economy.