The news: ByteDance’s TikTok paid people to lend their likenesses to digital avatars, often paying less than $1,000 per actor, per The New York Times.

• The avatars, which are free for TikTok advertisers to use, were meant for TikTok alone but have appeared on ByteDance’s video-editing tool CapCut and on platforms like Facebook and YouTube.
• Actors get no royalties for their avatars’ appearances.

For standard commercials, actors not represented by unions can make between $300 and $1,000, while union-represented actors can make $2,500 or more. Digital avatars, which can be used endlessly, cut that line out of the budget entirely.

“You can A/B-test scripts, you can A/B-test presenters, and you can do that en masse and very quickly,” said Yaniv Moore, CEO of ad tech company Tarzo. A single avatar “can speak all the languages in the world.”

Cut rates: Even when advertisers use generative AI (genAI) video tools off of TikTok, the cost difference between live productions and AI creations can be too good to pass up.

Case in point: Google’s Veo 3 costs $250 per month, which should net around eighty 30-second video clips, per Medium. Production for one 30-second clip from an agency could cost $3,000 to $8,000.

Our take: GenAI avatars are changing the face of advertising, literally.

As genAI images and videos improve and lose their uncanny valley feel, we can expect fewer avatars based on real people and more based solely on training data. The actors currently lending their appearances and voices to AI avatars are themselves data for training genAI models.

AI-based productions are democratizing advertising, allowing even the smallest firms to produce high-quality ads with minimal effort and budgets. Forty-five percent of smaller advertisers will use genAI in their videos by 2026, per IAB’s 2025 Digital Video Ad Spend Report.

However, brands must weigh the benefits against the risks, considering 31% of US adults say AI use in ads would make them less likely to buy, per CivicScience.