AI ads explode in India—and fuel fear of brand dilution

This shift is transforming ad production from a resource-intensive human process into a cost-effective technological tool, allowing companies to quickly test thousands of ad variations across platforms like Instagram, Facebook and their own websites.

After relying on humans for creative projects for a decade, Naturally Yours, a Mumbai-based health food brand, has shifted to producing all its creative work using generative AI tools, specifically Google’s Gemini and OpenAI’s ChatGPT, as its main engines. “Our ROAS [return on ad spend] It has increased significantly since we started using these tools. “We now spend less than half the time we spent before,” said Vinod Chendhil, founder and CEO of the company. Mint.

Plum Goodness, the beauty and personal care brand backed by A91 Partners and Unilever Ventures, is still in the early days of AI adoption and uses external platforms to create static images, videos and write ad copy. “Frankly, AI has shortened the time from concept to first draft, from revision to final. This has been the most significant impact of AI on our creative processes, even though we are still in the early stages of adoption,” said Shankar Prasad, the company’s founder and chief executive officer (CEO).

AI marketing startups attract capital

This rush to automate creative content has driven investment into key players in the generative AI space. Startups like Hypergro, which focuses on creating AI-powered video to increase conversions, have seen recent success. ₹7 crore pre-Series A funding round led by Eternal Capital. Dashverse, which runs tools as diverse as AI-powered microdrama app DashReels and comic book creation feature Dashtoon, raised $13 million in Series A funding from Peak XV Partners and Z47 in August to scale its AI-driven storytelling engine.

Earlier this month, global beverage maker Coca-Cola used artificial intelligence to create a video ad aimed primarily at the US market ahead of the Christmas holidays, making a splash on social media by becoming among the first major companies to do so. Chocolate maker Mondelez International recently said it would invest $40 million in a new generative AI tool to reduce marketing costs.

It is known that Fevikwik, Star Health and Cadbury India, owned by Pidilite Industries, used artificial intelligence in their different campaigns this year.

Creativity concerns are increasing

While artificial intelligence reduces costs and speeds up advertising production, it also raises concerns about job losses and the future of creativity.

“The downside of AI is that it cannot really make a big creative leap. And there is a certain similarity in its output. For example, I can now see ChatGPT writing quite easily. From social media posts to media articles, there is now a ChatGPT ‘chhaap’ and replacing unique individual voices with its own. When it comes to images and videos, sometimes they are given an AI look and feel,” said independent creative director Sumanto Chattopadhyay. Chattopadhyay.

“The best advertisements will now come from the collaboration between human creativity and artificial intelligence. The advertiser who is most creative in the use of artificial intelligence will come out on top,” he said.

A July 2025 survey by job search platform Naukri showed that over 40% of respondents in the advertising and marketing industry fear that AI tools could significantly reduce creativity in their roles.

“Cost effectiveness and shorter turnaround times are the biggest advantages of AI tools,” said Ujwal Sutaria, founder and general partner of venture capital firm TDV Partners. “There is good value in startups built for a variety of use cases, including ad creation and marketing automation tools to track performance.”

The rapid rise of AI tools comes at a time when marketing investments are becoming a key differentiator for brands struggling for visibility on competitive e-commerce and fast-paced commerce platforms. The ability to distribute hyper-personalized ads is now essential to increase market share in crowded categories like beauty, personal care, food and apparel and turn targeted creative work into a competitive advantage, Sutaria said.

“Every day, we can create a new ad tailored to different platforms, different target groups and needs. Even different geographies can display different ads according to purchasing patterns.”

Last year Mint reported that small brands were scrambling to grab shelf space in fast-trade dark stores, making marketing spend and uniqueness of campaigns a key factor.

creative dilution

But some industry executives are sounding the alarm, warning that relying too heavily on generative AI could pose a serious risk to brand identity if not done right.

While AI brings efficiency, executives worry that using the same tools to mass produce content will lead to creative similarities and the loss of the unique human creative touch.

“We are at a stage where the AI ​​revolution is a great co-pilot for testing and developing concepts. But completely replacing human creativity is not something we are ready for,” said Siddharth Jhawar, country manager at ad tech company Moloco. “A practitioner’s intuition about consumer behavior and an artist’s ability to envision new concepts are subtle and difficult to replace.”

Fears of brand dilution and inauthentic content that consumers already trust less underscore a strategic dilemma: Do cost savings outweigh the risk of eroding long-term brand value?

“The more marketers rely on AI to produce content, the less differentiated it will feel, placing a premium on higher quality research and writing. If everyone is using the same tool to create their ads, the market risks being overwhelmed by sameness, which will ultimately erode brand authenticity,” said Sutaria of TDV Partners. he said.

Moreover, glitches in ads generated by artificial intelligence are also worrying. Last month, Coca-Cola’s video ads came under scrutiny from social media viewers for their inconsistencies.