Machine Learning

Pencil doubles returns for brands with next generation ads created by AI

  • Learning: Pencil’s “Machine Generated Creative” platform learns from historic ads to generate new creative ideas that help brands systematically improve results
  • Performance: Pencil ads outperform existing creatives for brands, consistently delivering 2x stronger results across more than 100 campaigns
  • Technology: Pencil is able to generate 1 new video ad concept per minute, leveraging proprietary algorithms for video generation and OpenAI’s GPT-3 for copy generation

Friday 19th March 2021: Online video ads can now be generated by artificial intelligence (AI), while learning what resonates with audiences, in order to deliver better results for brands. This innovation is being pioneered by Pencil, the Creative AI company, with the launch of its Machine Generated Creative (MGC) platform.

US online sales reached almost $800 billion in 2020, up by 32% year-over-year fuelled by the pandemic1. Over ten million advertisers bought over $80 billion of Facebook ads last year, and research consultancy Nielsen has estimated that creative design can drive almost half of campaign performance.


Pencil’s MGC video ads, which are each unique and can be generated in 1 minute, have dozens of creative parameters which can be tracked and analysed through the Pencil platform. Using historic ad performance data, Pencil is able to understand what in the ad is resonating with customers. It can then generate new batches of ad ideas which are new and distinct, but which share winning characteristics with past winners. In this way Pencil learns what works while continuously exploring new ideas that might resonate with audiences.

For example, a flashlight brand using Pencil may generate a first batch of ads and find that those pitching battery life outperform those pitching brightness. The brand may then generate more ads exploring how battery life is important when keeping a flashlight in the car for emergencies.


Pencil analysed over 100 campaigns that used MGC video ads over the past 6 months and found the best MGC ads delivered an average return on ad spend (ROAS) 2x that of other ads the brands were running. One brand’s MGC campaign delivered 7x higher ROAS.

Will Hanschell, CEO and co-founder of Pencil commented: “Great ad campaigns are born from many creative ideas that are distilled down to a few. We are doing exactly this, extremely quickly, using AI. In launching MGC, we want to bring speed, insights and new ideas to marketing teams who care about both the creativity and the results of their ads – that means all marketing teams. Our platform uses the same brainstorm and refine process that creative teams have always used, which means creative teams can collaborate with the platform or use it to automate their day-to-day experimentation.” 

“Video ads have been dominating marketing campaigns around the world, even more so in 2020 as businesses have pivoted to ecommerce and social channels to engage new customers. The Pencil platform allows brands affordable access to the most powerful AI technology available today to deliver badly needed growth for their businesses, from day one.”


Pencil leverages proprietary technology to generate ad video, derive insights and make predictions, as well as integrating the OpenAI API to generate ad copy. The OpenAI API provides access to GPT-3, one of the world’s most powerful language models. Pencil is among the first companies approved to use it commercially. This approval requires strict criteria in AI safety and ethics.

GPT-3 allows Pencil to go beyond generating product descriptions, and begin to generate entirely new narratives around a brand or product. For example, pitching a flashlight in an ad by first establishing that working in the dark can be dangerous. This makes Pencil’s ads more compelling to potential customers, and therefore more effective for brands.

“Our ads are able to learn from what works for the people – like you or me – who see them and click on them. Our platform gives brands a tool to build a deep understanding of what’s working, what isn’t and what they should try next. We are generating ideas and campaigns that self-learn, providing brands with new insights and a way forward to grow their businesses. With the 2x better results we’ve already achieved at 10x less time and cost, we believe AI will be as fundamental to creativity in the future as the pencil was in the past.” adds Will Hanschell 


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