TLDR: Kellanova, the consumer packaged goods giant, is utilizing AI-powered solutions to significantly improve the effectiveness of its marketing creative and is consequently adjusting its agency fee structures to be more performance-based. This initiative follows a 12-month study across 10 brands, demonstrating AI’s role in optimizing creative output and addressing declining marketing budgets.
Kellanova, the company behind iconic brands such as Kellogg’s, Pringles, and Pop-Tarts, is at the forefront of integrating artificial intelligence into its marketing operations to boost creative effectiveness and redefine its relationships with advertising agencies. This strategic shift comes as marketing budgets face long-term declines, with Gartner reporting a drop from 11% of average U.S. company revenues in 2020 to 7.7% in 2025. Kellanova’s own global marketing spend decreased from $766 million in 2023 to $611 million in 2024, according to its full-year results.
The CPG giant embarked on a year-long pilot program, testing 443 creative assets across 10 of its U.S. brands, including Rice Krispies Treats and Cheez-It. For this, Kellanova partnered with Vidmob, a creative technology firm, and MMA Global, an industry association. They employed Vidmob’s Aperture solution, which integrates machine learning, historical data, and large language models (LLMs) like Google’s Gemini, to analyze the performance of creative deployed on Meta ad units. The study identified 19 key scoring criteria related to elements such as copy, logo placement, tone, narrative, pacing, and product placement, which were common in assets that achieved at least a three-second view.
Nicole Vinson, VP, Global Digital, Media and Omni-Shopper Experience at Kellanova, emphasized the dual benefit of AI, stating, “AI is not just an efficiency unlock, it’s an effectiveness unlock.” This focus on effectiveness is crucial for CMOs navigating tighter budgets.
The insights gleaned from this extensive study are now being used by Kellanova to refine its creative production processes and, notably, to modify its commercial agreements with creative agencies. The company is transitioning towards an output-based pricing system with some of its agency partners. Vinson explained, “We want our agency partners to have skin in the game,” indicating that a portion of agency bonus fees will now be directly linked to creative performance, as measured by the AI-powered effectiveness project.
This move by Kellanova exemplifies a broader trend of major advertisers leveraging AI to operationalize marketing’s creative side. While companies like Unilever and Kimberly-Clark have focused on time and cost-saving initiatives with AI, Kellanova is specifically addressing the “Wanamaker problem” – the challenge of knowing which half of advertising spend is wasted.
Beyond marketing, Kellanova is also embracing AI across its broader operations to build a “future-ready digital workplace.” Lesley Salmon, SVP and Chief Digital and Information Officer at Kellanova, highlighted the company’s strategies to prepare its workforce for the AI revolution. This includes empowering employees with AI tools like an “AI-powered chat buddy via Copilot for the web” to enhance creativity, skills, and productivity in daily tasks such as research, ideation, and drafting. Kellanova fosters a “test-and-learn culture” and hosts “Kuriosity Clinics” to encourage exploration of AI.
Ramesh Kollepara, Kellanova’s Global Chief Technology Officer, noted the exciting evolution of AI, including generative AI and agentic AI variations, which offer new opportunities for growth, accelerating speed to market, driving new product development, and fostering creativity and innovation. The company is moving beyond isolated AI pilots to strategically implement AI agents across various business functions for measurable impact.
Kellanova’s digital transformation journey has already yielded results, with a 30% increase in first-party data and streamlined supply chain operations. The company is also exploring AI-powered approaches for media targeting strategies, utilizing clean room technology to analyze purchase behavior, attitudinal insights, and demographic data for actionable segmentation that could lead to sales lifts.
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This strategic embrace of AI by Kellanova underscores a significant shift in how large corporations approach marketing and internal operations, moving towards data-driven creative optimization and performance-linked partnerships.
