Global Firms Leverage AI at Indian Hubs to Consolidate In-House Advertising Operations
AI Revolutionizes Ad Industry in India
Global companies are leveraging artificial intelligence (AI) at their Indian hubs to bring more creative work in-house, reducing turnaround time and reliance on external advertising agencies. This shift is reshaping the ad industry, with executives from major advertisers, including Kimberly-Clark, J.C. Penney-parent Catalyst Brands, and Target India, revealing that their global capability centers in India are utilizing AI tools across various marketing functions.
From generating product images and videos to selecting influencers and optimizing campaigns, AI is proving appealing to major advertisers across industries, from consumer goods to truck manufacturing, as they seek to rein in marketing costs. Kimberly-Clark, for instance, has significantly reduced content creation time from nearly a month to just two hours using an India-built AI platform. This platform also helps the company identify suitable influencers and localize campaigns across markets.
The use of AI has led to a substantial reduction in content creation time for Kimberly-Clark. Two years ago, content creation took 24 days, but now it only takes two hours due to the implementation of AI. This transformation is attributed to the company's AI platform, which was built in India.
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Catalyst Brands is piloting the use of computer-generated product images and videos for its online listings, which can cut the need to ship inventory around the world for photo shoots. India Managing Director Nihar Nidhi stated that Bangalore is at the forefront of piloting and creating certain prototypes, and the company is close to being able to put some of these into production.
At Roundel, Target's ad business, copywriters are using AI to generate ads faster and help the company respond more quickly to changing trends. India President Andrea Zimmerman noted that their business partners are seeing more value come back through the flywheel because they are able to move more. AI is also opening up opportunities in areas such as loyalty and personalization.
The increasing use of AI in the ad industry could pressure the traditional agency model. However, it will also help ease talent shortages that have hindered companies' efforts to bring more ad work in-house. Analysts believe that the traditional agency model will continue to sustain, especially for clients with large budgets.
A Gartner survey of 405 senior marketing leaders last year showed that nearly all of them are now using AI to some extent, with investment in the technology accounting for more than 15% of marketing budgets and growing.
| Company | Investment in AI |
|---|---|
| Kimberly-Clark | Not specified |
| Catalyst Brands | Not specified |
| Target | Not specified |
| Average | > 15% of marketing budgets |
| Analyst | View on AI's impact on traditional agency model |
|---|---|
| Jay Wilson (Gartner) | Rising AI use could pressure the traditional agency model |
| Brian Wieser (Madison and Wall) | Growing public distrust of AI and the specialization that ad agencies bring will ensure the model sustains, especially for clients with large budgets |
Investor Takeaway
Investors should consider the growing adoption of AI in the advertising industry, particularly in India, as a potential driver of growth for companies with in-house capabilities.
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