AI Video Ads vs Real Video: Which One Should You Actually Use for Ads?

Under $2,000. That's what Kalshi says it spent prompting the AI behind the ad it ran during the 2025 NBA Finals, made by one filmmaker, PJ Accetturo, in about two days. So should you sack off your video team and switch all your ad creative to AI video ads?

Hold your horses. Because while the industry was busy getting excited, the public were making it pretty clear how they feel about AI video, and it isn't all warm and fuzzy.

Think of it like dinner. AI video is the microwave meal: ready in minutes, costs next to nothing, and perfectly fine on a Tuesday. A proper shoot with a video team is your nan's Sunday roast. It takes all morning and a mountain of washing up, but it's what you put out when the in-laws are coming. Both have their place. The trick is knowing which night it is.

So let's look at what people actually think, two pros and two cons for each, and when to use which.

What the Public Actually Think About AI Video Ads

Short version: they're not sold yet.

NielsenIQ had more than 2,000 people watch AI-generated ads. They spotted most of them, and rated them more "annoying", "boring" and "confusing" than traditional ads.

Advertisers haven't quite clocked this. Research from IAB and Sonata Insights found 82% of US ad execs think Gen Z and millennials feel positive about AI ads, when only 45% of them actually do. That's a lot of confidence to be wrong about.

Closer to home, YouGov asked 2,012 UK adults in July 2026, and 78% said they'd trust a brand less if it used AI-generated actors. Ouch.

AI Video Ads: The Pros

It's Fast and Cheap

The Kalshi ad says it all: a spot good enough for an NBA Finals broadcast, turned around in a couple of days. If you need something out of the door by Friday, that's hard to argue with.

It Feeds the Algorithm

In April 2025 Meta told advertisers that creative diversification, rather than niche targeting, is now the best lever for finding the right audience. In other words, the platform wants lots of genuinely different ads, and AI lets you make them without booking 23 and a half shoot days. Plenty of businesses have noticed, with Meta saying more than 9 million small businesses now use at least one of its AI ad creative tools. One of our favourite uses is testing five different hooks cheaply, then putting proper budget behind the one that wins.

AI Video Ads: The Cons

People Can Tell, and They're Not Keen

Back to NielsenIQ: even the AI ads people rated as high quality produced weaker memory activation in the brain than traditional ads. You can nail the visuals and still get forgotten. And when it goes wrong, it goes wrong in public. McDonald's Netherlands posted an AI-generated Christmas ad on 6 December 2025 and pulled it within days after a social media backlash. Merry Christmas.

It's Harder Than It Looks, and the Rules Still Apply

Accetturo, an advertising veteran, said the Kalshi ad took around 300 to 400 generations to get 15 usable clips. Cheap to make doesn't mean easy to make. You also can't blame the robot. The ASA's guidance says the usual rules apply however an ad is made, and an AI disclaimer won't rescue an ad that misleads — such as AI footage showing cosmetic results the real product can't deliver.

Real Video: The Pros

Trust

Getty Images found 98% of consumers agree authentic images and videos are key to building trust. But YouGov backs it up: 68% of Brits who've seen AI actors in ads find them less convincing than human ones.

It Shows the Real Thing

Real people, your actual product, real results. That matters most when you're making a claim, because your customers and the ASA can hold you to it. Flip NielsenIQ's finding round, too: the traditional ads were the ones that stuck in people's memories.

Real Video: The Cons

It Costs More and Takes A LOT Longer

Accetturo reckons the Kalshi ad aired alongside spots that probably cost hundreds of thousands of dollars and took months. Your shoot won't necessarily be that big, but crew, kit, locations, talent and editing add up fast, and it all needs booking weeks ahead.

One Shoot, One Set of Options

Once the crew's gone home, you've got what you've got. Want a fresh hook in week three because the first batch are looking tired? Hope you filmed it. That's a real headache when Meta wants variety and you've got, say, six edits from one day of filming.

When to Use AI Video

YouGov also asked Brits when AI actors are acceptable, and the answers make a pretty handy brief. Humour came top at 45%, then background characters (44%) and storytelling (38%). So AI is your friend for:

• Testing hooks and concepts before you commit budget to a shoot
• Surreal, funny or physically impossible visuals where nobody expects realism
• Extra variations and formats to keep your Meta ads fresh
• B-roll and backgrounds where nobody is the star

When to Use Real Video

The same survey found only 7% think AI actors are acceptable for financial claims and 6% for health claims, with product demos not far ahead on 23%. So go real for:

• Finance, health and anything where trust is the whole sale
• Product demos, especially if you're showing results
• Testimonials and case studies (a fake happy customer is still a fake)
• Brand pieces you want people to remember

Personally, I'd use both. Shoot your real people and product properly, then use AI to test angles and build variations around it. Whichever you choose, be upfront about it: 94% of Brits in that YouGov poll said companies should disclose when they use AI-generated actors.

So, microwave or Sunday roast? Tuesday gets the microwave, the in-laws get the roast, and nobody should be serving a ready meal at Christmas. Just ask McDonald's.

And if all this sounds like a lot of cooking, there's a Leeds-based paid media agency that'd happily run the kitchen for you...