AI Has Come For Advertising

Summary

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Podcast Summary: "AI Has Come For Advertising"

Podcast: The Journal.
Hosts: Jessica Mendoza (The Wall Street Journal) & Katie Dayton
Air Date: December 12, 2025

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Overview

This episode explores the sweeping impact of artificial intelligence on the advertising industry, using Coca-Cola's iconic holiday ads as a case study. Hosts Jessica Mendoza and WSJ ad industry reporter Katie Dayton discuss the creative, economic, and cultural shifts provoked by AI-generated ads, the backlash and defenses within the industry, as well as broader changes to how advertisements are conceived and produced. The episode captures the tension between technological advancement and creative tradition at a time of rapid change for advertising.

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Key Discussion Points & Insights

1. Advertising's Traditional Roots and Sudden Disruption

• The episode begins by referencing Mad Men (00:06–00:39), highlighting how the ad business has long relied on creative teams much like TV’s Don Draper.
  • Quote: "The way an ad has been made for the last 50, 60 years... hasn't really changed that much." – Katie Dayton (00:39)
• Transition to how this tradition is now being upended by AI, especially by industry leaders like Coca-Cola (01:12–01:38).

2. Coca-Cola's AI-Generated Holiday Ads

• Analysis of Coke's 2024 and 2025 "Holidays Are Coming" ads, which were entirely produced using generative AI (03:16–07:19).
  • The first AI ad was met with negative reactions due to "uncanny valley" effects and criticisms of being "soulless" and "slop" (05:21–05:59).
    • Quote: "To put out slop like this just ruins the Christmas spirit... this just feels absolutely soulless." – Online Reaction (05:47)
    • Quote: "Coca Cola is red because it's made from the blood of out of work artists." – Animator Alex Hirsch, as paraphrased by Katie Dayton (06:16)
  • Despite the backlash, in 2025 Coke doubled down with another AI ad, this time featuring animals instead of people to minimize uncanny effects, but still revealed classic AI errors (e.g., wheels mysteriously changing on trucks) (07:19–08:06).
• Business rationale behind the shift:
  • AI meant lower costs, faster turnarounds—ads now produced in a month instead of a year, with 100 humans supporting 5 AI specialists generating 70,000 video clips (08:39).
    • Quote: "They would have had to start months and months and months before they did with AI." – Katie Dayton on Coke's CMO remarks (08:06)

3. Industry Response and AI’s Proliferation

• The trend is rapidly expanding beyond Coke—nearly a third of online video ads have an AI touch (11:35).
  • Quote: "There is a very high chance that you will have seen an AI ad already. Absolutely. There's like no doubt about it." – Katie Dayton (09:33)
• At the 2025 Cannes Lions advertising festival, AI was the dominant topic, marking a sharp change in sentiment from just two years earlier (10:44–11:35).

4. Notable AI-Driven Ad Campaigns and Backlash

• Examples of recent AI-heavy commercials:
  • Google’s animated turkey Thanksgiving ad—AI-generated but indistinguishable to most viewers (12:13–12:29).
  • McDonald's Netherlands’ AI holiday mishap ad—quickly pulled after online backlash (12:33).
  • Valentino’s AI ad with transforming handbags—deliberately "surreal" (12:33).
• Industry in flux: recent $9 billion merger between Omnicom and IPG, with 4,000 layoffs, signals broader challenges—even if not wholly AI-driven (13:32–13:49).

5. What’s At Stake: The Creative Future of Advertising

• AI shifts the disruption from media distribution to the core creation of ads—a role where agencies have long claimed irreplaceable expertise (13:57–14:32).
  • Quote: "With AI the panic is how you're actually creating the ads. ...Only we can do that. And now with AI that's kind of really not the case." – Katie Dayton (13:57)
• Pushback from companies emphasizing authenticity, such as Aerie’s pledge for “no AI-generated bodies or people” (15:00).
• Nonetheless, consumer testing suggests AI ads perform as well as traditional ones; Coke’s 2025 spot hit the top rating among viewers (15:28–15:48).
  • Quote: "If they don't care, then what is to stop a brand using this all the time?... all roads are pointing to them using AI more." – Katie Dayton (15:48)

6. Do "Mad Men" Jobs Survive?

• For now, AI works best when fed old ideas; creative direction and cultural insight remain human strengths (16:23–17:05).
  • Quote: "You still need the big idea...if you're going to remain fresh, you still need somebody to be in touch with culture and come up with a fantastic idea..." – Katie Dayton (16:29)
  • Quote: "And that's not yet something a computer can necessarily come up with." – Jessica Mendoza (17:05)
  • "Not yet." – Katie Dayton (17:08)

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Notable Quotes & Memorable Moments

• "The specter of AI infiltrate our favorite ads... we're seeing brands really embrace this technology..." – Katie Dayton (01:38)
• "Coca Cola is red because it's made from the blood of out of work artists." – Referenced by Katie Dayton (06:16)
• "They would have had to start months and months before... with AI, they could do it in a month." – Katie Dayton on industry efficiency (08:06, 08:39)
• "The wheels on the Coca Cola trucks—they change in number and placement throughout the commercial." – Jessica Mendoza (07:19)
• "Up until now, any kind of disruption we've had in the industry has tended to be around the media side... with AI the panic is how you're actually creating the ads." – Katie Dayton (13:57)
• "The Coke ad scored... a 5.9 star rating, which is the maximum possible score an ad can get through the model..." – Katie Dayton (15:28)
• "You still need the big idea...if you're going to remain fresh, you still need somebody to be in touch with culture..." – Katie Dayton (16:29)
• "Not yet." – Katie Dayton, on whether AI can provide groundbreaking creative inspiration (17:09)

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Timestamps for Key Segments

• 00:06–00:39: Mad Men analogy and tradition of ad creation
• 01:38–02:01: The "AI revolution" arrives in mainstream advertising
• 03:16–07:19: Examination of Coca-Cola’s AI holiday ads and public backlash
• 08:06–09:10: Business rationale: speed, cost, scale, and new production workflow
• 10:10–11:35: The Cannes Lions festival, industry attitudes toward AI
• 11:35–12:07: AI's prevalence in digital video advertising
• 12:13–13:32: Notable recent AI ads—Google, McDonald's, Valentino
• 13:32–14:32: Industry consolidation and what AI changes
• 14:42–15:28: Brand resistance, authenticity pledges
• 15:28–16:23: Effectiveness of AI ads, market reasons for adoption
• 16:23–17:09: Future of creative jobs and the role of human inspiration

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Conclusion

The episode concludes with the consensus that while AI is revolutionizing how ads are made—and leading to both cost savings and public debate—the need for human-driven creative ideas persists, even as technology progresses. Brands face a balancing act: leveraging AI’s efficiencies without losing the human touch that gives ads cultural resonance. For now, advertising’s “Mad Men” may be safe, but the landscape is shifting quickly.

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Transcript

[Jessica Mendoza]

When you think about the American advertising business, if you're like me, you think of the TV show Mad Men.

[Narrator/Announcer]

Every great ad tells a story. Here to tell that story is Peggy Olson.

[Jessica Mendoza]

The show's set in the 1960s and follows an ad exec named Don Draper. In nearly every episode, he and his team brainstorm creative new ads that play on people's imagination and emot. My colleague Katie Dayton, who covers advertising, says Mad Men is pretty realistic the.

[Katie Dayton]

Way an ad has been made for the last 50, 60 years. You know, all the way back to the Mad Men era. The way it's made hasn't really changed that much.

[Jessica Mendoza]

That series famously ends on a Coke ad. Can you sing me the song?

[Katie Dayton]

I will not sing it. Just a little, just a little. But I can tell you I would like to buy the world a Coke.

[Jessica Mendoza]

I'd like to buy the world a.

[Katie Dayton]

Coke and keep it Coke.

[Jessica Mendoza]

Mad Men was fiction, but that Coke ad is real. Coke for years has been making influential, award winning ads. They're known as leaders in the field and decades of creative, unique ads have helped make them one of the most recognizable brands in the world. But recently, Coke has been changing its approach, working with fewer Dawn Drapers and more artificial intelligence.

[Katie Dayton]

We are finally starting to see the specter of AI infiltrate our favorite ads. This is the first year for advertising generally in which we're seeing brands really embrace this technology and instead of playing around with it and sort of using it as a test, they're really committing to it.

[Jessica Mendoza]

Now other brands are following Coke's lead. Would you say that the AI revolution has come for advertising this year?

[Katie Dayton]

Absolutely.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Friday, December 12th. Coming up on the show, the era of the AI ad is here.

[Narrator/Announcer]

This episode is brought to you by US Bank. They don't just cheer you on, they help every move count. With US Bank Smartly checking and savings account to help track your spending and grow your savings, your finances can go further. Because when you have the right partner on your side, there's no limit to what you can achieve. That's the power of us. Visit usbank.com today to learn more. Copyright 2025 US Bank.

[Jessica Mendoza]

Nearly every holiday season, Coke remakes one of its most iconic ads. It's called Holidays are Coming. The ad changes a little each year, but always features a catchy jingle and a Coca Cola truck driving through the snow. As the truck passes over bridges and through neighborhoods, Christmas lights turn on, spreading the holiday cheer.

[Katie Dayton]

It's become part of the culture of Christmas. You know, I think when I grew up, the minute you saw Holidays Are Coming coming on tv, that was the watershed moment of, oh, okay, Christmas is here now.

[Jessica Mendoza]

Christmas is here. The holidays are here.

[Katie Dayton]

We didn't have Thanksgiving, so there wasn't a point before that on the calendar. That was honestly how people would discuss, okay, we're in the Christmas season.

[Jessica Mendoza]

Coke has put out many versions of Holidays Are Coming since it first debuted in 1995. But last year, the company decided to give its classic ad a new twist.

[Katie Dayton]

They decided last year they were going to, in a pretty public experiment, use AI methods to create this ad. So they employed a number of studios and they said to them, we want an updated version of Holidays Are Coming, but we want to not film anything. We don't want to use any archive footage. We want to make it entirely with AI generative AI. It was really using this moment as a point in which it could say, look at us, we are ahead of this technology. We have been known to be on the cutting edge of advertising for decades. This is coming whether you like it or not. And we're going to take one of our most iconic ads and we're going to show you that we can do this with AI. So I think if you were to watch last year's ad with your eyes closed, you would probably think it was exactly the same one that you've seen before. The music is such a huge part of it. That hasn't changed very much whatsoever.

[Jessica Mendoza]

But there are some things that stick out about the ad. If you look closely at last year's ad, there are some telltale signs of AI for one, the friendly neighborhood faces who smile as the Coca Cola trucks drive by look a little unnatural.

[Katie Dayton]

Yeah, very uncanny valley. Just that sort of real falsity that can creep people out.

[Jessica Mendoza]

And online people were open about the fact that they were creeped out. Indeed, to put out slop like this just ruins the Christmas spirit. Compared to Coca Cola's old Christmas commercials, this just feels absolutely soulless.

[Narrator/Announcer]

So Coca Cola's ad this year is all by AI and it shows and it has no heart. This is what people were worried about.

[Jessica Mendoza]

Besides the reaction to the ad's look, there were concerns about what using AI could mean for the creatives who usually make these ads.

[Katie Dayton]

An animator, Alex Hirsch, he responded last year with the line, coca Cola is red because it's made from the blood of out of work artists.

[Jessica Mendoza]

Wow.

[Katie Dayton]

So it then became this representation of how AI is going to decimate the creative industries.

[Jessica Mendoza]

But despite the ad's shortcomings and the criticism, this year Coke decided to do it again. Holidays are coming. 100% AI generated.

[Katie Dayton]

This year they had the same approach. They gave two different AI studios the brief and it hadn't changed too much. But I think it is a complete representation of how different studios have learned to use the technology more. And if you compare the two side by side, I think it's undeniable that this year's ad is better. You don't get that weird uncanniness.

[Jessica Mendoza]

One of the reasons is that this year's Coke ad has no people in it. Instead, animals watch and coo as the Coca Cola trucks drive through the snow. Days are coming cold, but the ainis of it all is still there, which people were again quick to point out online, in particular, the wheels on the Coca Cola trucks, they change in number and placement throughout the commercial. Why use AI to make these ads? Right? Because Coke has plenty of money and it seems like their ad strategy has worked all these years. They have been able to build that relationship with people, have been able to be part of the culture in the way they want it. And so why do this?

[Katie Dayton]

There is one school of thought that Coke did this not for consumers at all, but for investors and for anybody watching the company betting on the company's future. The chief marketing officer, he was very proud. He's a very enthusiastic man. He is very much a company man. And, you know, he admitted if they had filmed this the traditional way, they would have had to start months and months and months before they did with AI.

[Jessica Mendoza]

The company said that humans were still in the mix. Around 100 people total worked on this year's holiday ad campaign. But the CMO also told Katie that it was cheaper and speedier to produce than a typical non AI production. Only five AI specialists were needed to prompt, turn out and refine more than 70,000 video clips used in a version of the ad, according to Koch. And the CMO said that with AI campaigns that used to start production a year in advance could now be done in a month.

[Katie Dayton]

I think for a lot of brands, and not all of them, but a lot of them, it's just almost too difficult to resist. Just the ability to shed some expense and some time as well.

[Jessica Mendoza]

And so as consumers, sounds like we should be bracing for more AI ads to come, not just from Coke, but from all over.

[Katie Dayton]

Absolutely. And there is a very high chance that you will have seen an AI ad already. Absolutely. There's like no doubt about it.

[Jessica Mendoza]

After the break, the AI Takeover continues. Back in the warmer days of summer, Katie went to the ad industry's annual gathering in the French Riviera.

[Katie Dayton]

The Cannes Lions International Festival of Creativity. To give it its full name is a week long boozy meetup in the south of France. Naturally, we have to live up to the reputation of the industry somehow. And every CMO goes there, every addict agency goes there, all the trade journalists that report on the industry go there. And everyone hires out yachts that they probably can't afford. It has always been a real party.

[Jessica Mendoza]

And what were people saying about AI there this year?

[Katie Dayton]

Well, this year it was funny because I went to Cannes in 2023 and that was around the time people were trying to either put it down and say, this is never going to replace what we do, it's never going to replace the craft of producing advertising, or they were trying to say it's not, there's nothing to worry about, you can still figure this out. And now you cut to two years later and it was literally the only topic anyone talked about. Every company pretty much that works in this industry has invested somehow in AI this year. They have all this technology, they've been sat on it, they're training their people in it. And now is where we're starting to see that shift of, okay, well we need to produce something with all this investment that we've made.

[Jessica Mendoza]

Katie says that's starting to show up in commercials on streaming services like Hulu, on social media and elsewhere online. Almost a third of all of those videos have now been touched by AI in some way, according to the Interactive Advertising Bureau. That's a bigger number than I expected. This, this soon.

[Katie Dayton]

It's huge. And I think a lot of that is to do with the fact that it's getting quite good. They can sneak it in a lot easier and the technology's getting great. And it's right under our noses.

[Jessica Mendoza]

A few of the season's ads that have gotten attention for leaning into AI come from some well known companies.

[Katie Dayton]

Google just put out an ad a few months ago that was all made with AI and it's a animated turkey. And you would never know, I would never have picked up that it was.

[Jessica Mendoza]

AI in the ad. The turkey is trying to get out of town before Thanksgiving.

[Narrator/Announcer]

Planning a quick getaway. Just ask Google.

[Jessica Mendoza]

McDonald's also recently released an AI generated ad in the Netherlands showing a frenzy of people having holiday mishaps. It's the most terrible time of the year, though. McDonald's pulled the ad this week after online backlash. Other brands have used AI to make their ads artsy, Valentino, the luxury fashion house, released an ad that was clearly AI showing one of their bags turning into human body parts. The company called it a surreal encounter with the bag, which seemed to be a commentary on the idea of AI Slop itself. All this is happening at a moment when the ad industry was already going through a lot. Last month, two advertising agency giants, a company called Omnicom and a company called IPG, completed a $9 billion merger. As a result, some legacy agencies will shutter and 4,000 people are expected to be laid off.

[Katie Dayton]

We have seen the large advertising holding companies really go through one of the most tumultuous periods that they've ever been through as investors just start to question what this industry is going to look like in two, three, five years time.

[Jessica Mendoza]

And while those changes are not all about AI Katie says the technology is shaking up the industry in totally new ways.

[Katie Dayton]

Up until now, any kind of disruption we've had in the industry has tended to be around the media side of the business, which is, you know, digitally. How are you buying and selling ads now? With AI the panic is how you're actually creating the ads. And that's something that these agencies are always could rely on. They could go, we're the ones with the creators. We're the best in the world and we know how to make and we're going to make you a Hollywood style production and only we can do that. And now with AI that's kind of really not the case.

[Jessica Mendoza]

What does the resistance within the industry look like here? Like, are there people in the industry who are trying to fight these changes or slow them down or do something about it?

[Katie Dayton]

Yeah, we're seeing from the brand side and I think we will be seeing this so much more in the future. Is the brands that really prize authenticity that are coming out and saying, we're not going to be using any AI we're just going to tell you this now.

[Jessica Mendoza]

One example of that is the underwear brand Aerie. Back in October, Aerie posted a statement that said, quote, no AI generated bodies or people, real people only. Although Aerie is a brand that has long said it won't use photo editing to change models bodies. Still, Katie says that AI in advertising is likely here to stay in part because of the way ads like Cokes have been testing among regular viewers.

[Katie Dayton]

The Coke ad scored out of all of the Christmas ads that came out last year very, very well. And then they did it again this year with the, you know, quote unquote, better AI and it scored a 5.9 star rating, which is the maximum possible score an ad can get through the model that they were using.

[Jessica Mendoza]

Wow.

[Katie Dayton]

So it just does beg the question of, do, you know, real audiences? Do the people that are watching TV every night, are they paying attention enough? And if they don't care, then what is to stop a brand using this all the time? Even if a subset of people think it looks worse, if it's gonna still test the same and it's gonna cost them a lot less time and money, then all roads are pointing to them using AI more.

[Jessica Mendoza]

Will there still be the Don Draper Mad Men jobs and advertising moving forward?

[Katie Dayton]

The line that everyone falls back on right now is that you still need the big idea. So a lot of the ads that you're seeing, 100% AI generated right now. I think the thing that's sort of the commonality among them is that they're iterative, you know, they're based off an idea that somebody else had 30 years ago. Holidays are Coming looks very much like the original Holidays are Coming ad. So the question is, well, if you're going to remain fresh, you still need somebody to be in touch with culture and come up with a fantastic idea that's going to really turn people's heads, otherwise they're going to get bored.

[Jessica Mendoza]

And that's not yet something a computer can necessarily come up with.

[Katie Dayton]

Not yet.

[Jessica Mendoza]

Not yet. Before we go, we're working on our year end episode and we want to hear from you. Send us a voice note sharing your favorite episode of the year and any other questions you want us to answer. That's all for today. Friday, December 12th. The Journal is a co production of Spotify and the Wall Street Journal. The show is made by Kathryn Brewer, Pia Gadkari, Isabella Japal, Sophie Kodner, Ryan Knudson, Matt Kwong, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Allen Rodriguez Espinosa, Heather Rogers, Pierce Singhi, Jeevika Verma, Lisa Wang, Katherine Whalen, Tatiana Zamis and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singapak and Peter Leonard, with help this week from Sam Baer. Our theme music is by so Wiley. Additional music this week from Katherine Anderson, Marcus Bagala, Bobby Lord, Emma Munger, Peter Leonard, Nathan Singapok, Griffin Tanner, so Wiley and Blue Dot Sessions. Fact checking this week by Kate Gallagher and Mary Mathis. Thanks for listening. See you on Monday.