Ah, yes. This video was made by the Dove "Campaign for Real Beauty". Or, in other words, the Dove "Maybe you'll buy from us if you think we give a shit" campaign. Sad. As for the video, it's basically true.
What makes this 1000x funnier. Doves new real beauty campaign is such bullshit. Dove and Axe(known for its objectifying women comercials) are actually owned by the same parent company.
It maybe easier now to do with Photoshop, but they have always modified pictures for ads, it just used to be done by hand and/or airbrush.