AI commercials: what works, what fails, and what they take

In early December 2025, McDonald’s Netherlands released a 45-second Christmas spot titled “the most terrible time of the year.” A few days later it was gone. McDonald’s confirmed the removal on December 10, after online criticism, and acknowledged that for many guests the season is “the most wonderful time of the year.”

The AI commercial was not rushed. Its producer said the work took ten people five weeks, full-time. A month earlier, Coca-Cola had released two new AI-generated holiday ads of its own. Same season, same technology, very different handling. The gap between those two cases is the subject of this guide.

The model draws the frames. Someone still decides which ones stay.

What is an AI commercial?

An AI commercial is a spot in which some or all of the images, voices or music are generated by models. Google’s keyword data for Canada shows searches for “AI ads” and “AI advertising” climbing sharply over the past year, and the label now covers very different work. A brand that adds a generated winter street behind a filmed product and a brand that generates every shot both say “AI generated commercial”. Buyers should ask which one they are getting.

AI ads on a spectrum: from assisted to fully generated

Three positions cover most of the market.

• AI-assisted. Real product, real hands, real performers shot on camera. Models add settings, extra angles or pickup shots. Microsoft’s design team described a product ad in April 2025 where the shots with intricate movement, such as hands typing, “had to be shot live”, while quick cuts and low-motion shots were generated.
• Hybrid. A generated world with a real voice, real music or a filmed hero shot. Coca-Cola’s 2025 holiday films were generated, and the company said the music was performed and sung by real artists.
• Fully generated. Every image, voice and sound comes from models. Coca-Cola’s 2024 holiday film is described by the company as the first entirely generated film on broadcast media.

Three positions on the spectrum

From filmed with AI help to fully generated

Three positions on the spectrum

1	AI-assisted	Microsoft Design ad, April 2025: hands typing shot live, quick cuts generated
2	Hybrid	Coca-Cola 2025 holiday films: generated images, music by real artists
3	Fully generated	Coca-Cola 2024 holiday film, described by the company as entirely generated

Each step toward full generation adds control over the image and removes anchors to reality. Both have consequences for trust.

AI advertising that worked, and AI ads that drew backlash

Kalshi, NBA Finals, June 2025. A 30-second AI video ad made by ad veteran P.J. Accetturo in two days. NPR reported 300 to 400 generations to get 15 usable clips, and more than 3 million views on Kalshi’s X account within a week. Accetturo’s own caution: “Just because this was cheap doesn’t mean anyone can do it.”

Coca-Cola, November 2025. Two reimagined versions of the 1995 “Holidays Are Coming” spot, made with the studios Secret Level and Silverside AI. The company’s global head of generative AI said creative direction “has and always will be human-led.” Reviewers saw progress over 2024: TechRadar noted wheels that rotate correctly and steadier lighting, but also a mix of polished and cartoonish scenes, and called the result “an imitation of nostalgia.” Craft improved. Warmth stayed in question.

McDonald’s Netherlands, December 2025. The spot, made by The Sweetshop Films with the agency TBWA\Neboko, mocked the stress of the holidays. Viewers called it unsettling and the company removed it. The lesson sits in the concept as much as the pixels: a generated image that looks slightly wrong will amplify a message that already risks feeling cold.

For the two holiday campaigns side by side, see Coca-Cola vs McDonald’s. For more cases, see AI-made ads: what worked.

How common are AI video ads now?

The IAB’s 2026 digital video report, published July 14, 2026, puts numbers on adoption in the United States. Nearly two in three video ad buyers use generative AI for creative, up from half in 2025. One third of ad assets use it in 2026, up from one fourth in 2025. Buyers expect the share to reach 43% in 2027. Among smaller buyers, 96% are not satisfied with their current level of use; see our reading of the IAB report.

Share of video ad assets using generative AI

US video ad buyers, IAB 2026 report

Share of video ad assets using generative AI

Year	Share of assets
2025	one fourth
2026	one third
2027 (buyers’ forecast)	43%

Audience reaction is the next test.

What makes an AI video ad work

Four decisions separate the spots that hold up from the ones that get pulled.

1. Story first. The idea has to hold up with imperfect visuals. A concept that relies on warmth will test generated faces and crowds hard.
2. A real product. Where accuracy matters, film it or build from exact references. A product that differs from the one on the shelf is a credibility problem and a legal one.
3. Consistency. Characters, wardrobe, packaging and light must match from shot to shot. The mixed styles TechRadar flagged in the 2025 Coca-Cola spot are a continuity failure, and viewers sense them even when they cannot name them.
4. Sound. Voice, music and room tone carry feeling. A generated image with a human voice and real music reads differently from a fully synthetic stack.

What an AI generated commercial takes

Production is a sequence of decisions, and each one has a cost in time.

• Brief and script. Offer, audience, one idea, a length.
• Reference sheets. Characters, product and locations fixed before generation starts. See character sheets.
• Storyboard. Shot order and timing, agreed with the client.
• Generation. The slowest stage to predict. Kalshi’s 300 to 400 generations for 15 usable clips is a public benchmark. Our note on tries per usable shot explains why.
• Edit, sound and finishing. Cutting, music, voice, formats for each platform.
• Review. Brand, legal and a fresh pair of eyes before anything ships.
• Revisions. Planned from day one.

Shot count, approvals and the accuracy your product demands decide the schedule. The studio’s services and pricing pages describe how this work is scoped.

Disclosure, trust and the rules in Canada

The IAB’s January 15, 2026 study found a gap. Of 104 advertising executives surveyed, 82% believed Gen Z and Millennial consumers feel positive about AI-made ads. Of 505 consumers surveyed, 45% did. DoubleVerify’s July 29, 2026 study of 22,000 consumers in 22 markets found that 42% say a low-quality or “uncanny” AI ad would hurt their opinion of a brand and 56% cannot consistently identify AI-generated content. Quality moves opinion. The trust gap in AI video covers this in depth.

The AI ad perception gap

Share who say Gen Z and Millennial consumers feel positive about AI-made ads

The AI ad perception gap

Group	Share
Advertising executives (104) who believe consumers feel positive	82%
Consumers (505) who actually feel positive	45%

In Canada, Ad Standards told Daily Hive in October 2026 that there is no dedicated regulatory framework for AI-generated advertising. Existing law and standards still apply. The Competition Bureau states that the Competition Act covers commercial material regardless of how it was created, and Ad Standards says a disclaimer cannot cancel a misleading overall impression. In Quebec, commercial content aimed at the Quebec market, including videos, generally has to be available in French.

Before you commission an AI commercial

1. Which parts of the spot must be real, and who films them?
2. Who approves each stage, and how many rounds of revisions are planned?
3. How will you label the spot, and does every claim and product shot match what you sell?

FAQ

How much does an AI commercial cost?

Cost depends on length, shot count, how much real footage is mixed in, product accuracy, voice and music rights, formats and revision rounds. Kalshi said generation for its 30-second spot cost under $2,000, and declined to disclose what it paid the creator. Our rates are on the Pricing page.

Are AI ads legal in Canada?

Yes. Ad Standards says Canada has no dedicated framework for AI-generated advertising, so existing rules apply. The Competition Act bars materially false or misleading representations however the ad was made, and a disclaimer cannot fix a misleading overall impression. Ads aimed at Quebec must also respect French-language rules. Ask a lawyer about your case.

Do people trust AI ads?

Trust is mixed and quality-dependent. The IAB found 45% of US Gen Z and Millennial consumers feel positive about AI-made ads, well below what executives assumed. DoubleVerify found 42% would think less of a brand running low-quality AI ads, while 40% view polished ones positively.

How long does it take to make an AI commercial?

It depends on shot count, approvals and revisions. Public cases range from two days for a 30-second spot made by one experienced creator to five weeks of full-time work by ten people for a 45-second film. Generation is the hardest stage to predict, because usable shots take many tries.

Can AI use my real product?

Yes. Exact product photos, footage and specifications serve as references, and shots that need precision can be filmed and combined with generated settings, as Microsoft did for its typing close-ups. The product on screen must match the product you sell, since misleading representations fall under the Competition Act.