GenAI transforms advertising's core pillars. It enables hyper-personalized creatives at scale, democratizes ad production for smaller businesses, and fundamentally enhances the two most critical functions of any ad platform: predicting user behavior and measuring campaign outcomes.

The next evolution, the Generative Ads Recommendation Model (GEM), aims to fully automate ad creation. Marketers will simply provide an image and a budget, and the AI will generate the entire ad library. This shifts the marketer's primary value from ad creation to optimizing the post-click customer journey and offer.

AI video creative is no longer theoretical. E-commerce company Ridge reports that it is running full-blown AI-generated videos that are "winners in the ad account." These assets now command up to a third of the company's total ad spend, proving their real-world performance.

The largest advertisers on platforms like Meta launch over 10,000 new creatives a year, equating to more than 40 per workday. This massive scale of experimentation is manually impossible for most companies, creating a clear market need for AI platforms that automate and scale video production.

According to Higgsfield AI, a new market is emerging where Fortune 500 brands are bypassing large ad agencies and hiring small (10-30 person) AI-native firms to create social media commercials. This demonstrates a strategic shift towards agile, specialized partners for AI-driven creative production.

The cost of creating a sophisticated, multi-clip AI video ad, including all image and video generations, can be astonishingly low—as little as two dollars. This radical reduction in production costs democratizes high-quality video creation, making it accessible to nearly anyone, regardless of budget.

Higgsfield's CEO notes a key trend: the best-performing AI-generated ads don't try to pass as real. They lean into a distinct AI aesthetic, suggesting that audiences are not only accepting but are also engaged by this new visual style, prioritizing creativity over photorealism.

Previously, marketers told Meta who to target. With the new AI algorithm, marketers provide diverse creative, and the AI uses that creative to find the right audience. Targeting control has shifted from human to machine, fundamentally changing how ads are built and optimized.

The real economic value of generative video lies in advertising, not filmmaking. Unlike movies with finite consumption, there is unlimited demand for personalized, diverse ad content. This makes advertising a perfect fit for the technology's scalable content creation capabilities.