AI-powered videos are ‘outperforming million-dollar ad campaigns’, according to a new report by the Internet Advertising Bureau
According to the the Internet Advertising Bureau’s 2025 Digital Video Ad Spend & Strategy Report, nearly nine in 10 advertisers are now using AI for video ads, with 40 percent of all ads expected to be AI-assisted by 2026.
The IAB is an American advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry.
The IAM used a family-owned tamale shop in Los Angeles as an unlikely case study in the power of AI-driven advertising. (Tamale is a traditional Mesoamerican dish made from a “masa” – a corn-based dough – that is steamed in a corn husk or banana leaf.)
The example shows why: the tamale shop created a funny, AI-assisted video “in just ten minutes”. The clip went viral, reaching 22 million views and 1.2 million likes within weeks, while drawing crowds of new customers to the storefront.
Advertisers say they are already applying AI to tailor content for audiences (42 percent), adjust visual styles (38 percent), and boost contextual relevance (36 percent).
The lesson, experts suggest, is that in an era of shrinking attention spans, brands that succeed will be those blending AI speed with human storytelling to create content that feels authentic and timely.
Keith Kakadia, CEO of Sociallyin, works with brands on this balance. He said the tamale shop’s success signals a broader industry shift.
“For small businesses, this is a game-changer. You don’t need a big budget or a massive production team anymore,” says Kakadia.
“A smart idea, paired with AI support, can cut through the noise and reach millions. The tamale shop’s 10-minute video proves that even the smallest players can compete with bigger brands if they lean into authenticity and creativity.”
Industry analysts point to five reasons why this shift matters:
- AI cuts costs dramatically – campaigns once requiring expensive studios can now be produced with laptops and generative AI tools.
- Creative testing is faster – multiple versions of a campaign can be generated and tested in real time.
- Smarter targeting is built in – ads can adapt by region, audience segment, or cultural moment without large teams.
- Engagement is shifting to authenticity – consumers reward brands that use AI to enhance, not replace, human storytelling.
- The window for attention is shrinking – the ability to spin up content in minutes is becoming a necessity.
Kakadia says: “AI can speed up how we create, test, and launch campaigns, but speed alone isn’t enough. What really drives impact is pairing that efficiency with human creativity and authenticity. The brands that succeed will be the ones using AI to enhance their storytelling, not replace it.”
10 AI-driven video ad creation tools
1. Creatify
Instantly generates UGC-style video ads from product URLs – producing 5 to 10 ready-to-run ads in seconds using AI avatars.
2. Arcads
Turns your written text into emotionally resonant video ads using AI actors – helping marketers create high-quality ads quickly and cost‑effectively.
3. AdCreative.ai
An AI tool that lets users create ad banners, text, photos, and videos – with promises of up to 14 times more conversions and no design work needed.
4. QuickAds.ai
An AI ad generator that crafts image and video ads, faceless videos, and YouTube Shorts in as little as 30 seconds, powered by insights from Meta’s ad library.
5. Canva Video Ad Maker
Features drag-and-drop templated video creation right in the browser – allowing users to customize pre-made templates in minutes without needing design software.
6. InVideo AI
Lets users generate AI-powered video ads by simply typing an idea or providing a product link – AI handles scripting, hooks, editing, avatars, and more.
7. AdGen AI
Enables “create multiple ads in 2 minutes” from a single website URL – producing on-brand ad variations formatted for platforms like Meta and Google.
8. Google Veo 3 (Fast)
Google’s upgraded video generation model (“Veo 3 Fast”) delivers rapid 1080p video clips for ads, demos, and training – now integrated into tools like Canva.
9. Runway (Gen‑series)
Offers text-to-video and video-to-video generative AI models (Gen‑1 through Gen‑4) via a user‑friendly web interface, enabling rapid multimedia creation.
10. Omneky
Uses AI to automatically generate and test scaled ad campaigns, and in 2025 introduced tools like Campaign Launcher, which instantly publishes personalized omnichannel campaigns across Meta, Google, TikTok, and more.
Main image courtesy of CreatorKit.com
