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

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

After a decade of relying on humans for creative projects, Naturally Yours–a Mumbai-based healthy-food brand–has shifted to producing all its creative work using generative AI tools, specifically Google’s Gemini and OpenAI’s ChatGPT as its primary engines. “Our ROAS [return on ad spend] has multiplied significantly since we began using these tools. We now also spend less than half the time than we did before," Vinod Chendhil, founder and chief executive officer of the company, told Mint.

Beauty and personal care brand Plum Goodness, backed by A91 Partners and Unilever Ventures, is still in its early days of AI adoption and uses external platforms for generating static images, videos, and writing ad copies. “Clearly, AI has crashed the time from concept to first draft to revision to final. This has been the most significant impact of AI on our creative processes, even though we are still in early stages of adoption," said Shankar Prasad, founder and chief executive officer (CEO) of the company.

AI marketing startups attract capital

This rush to automate creative content has funneled investment into key players in the generative AI space. Startups like Hypergro, which focuses on AI-driven video generation to boost conversions, recently secured a ₹7 crore pre-Series A funding round led by Eternal Capital. Dashverse, which runs different tools including AI-led microdrama app DashReels and comics creation feature Dashtoon, raised a $13 million Series A from Peak XV Partners and Z47 in August to scale its AI-native storytelling engine.

Earlier this month, global beverage maker Coca-Cola used AI to create a video ad primarily for the US market ahead of Christmas holidays, making waves on social media for being among the first large companies to do so. Chocolate maker Mondelez International recently said it will invest $40 million in a new generative AI tool to cut marketing costs.

At home, Pidilite Industries’ Fevikwik, Star Health, and Cadbury India are known to have used AI for their different campaigns this year.

Creativity concerns rise

While AI is cutting costs and accelerating up ad production, it is also raising concerns about job losses and the future of creativity.

"The drawback of AI is its inability to take a really big creative leap. And there is a certain sameness to its output. For example, I can spot ChatGPT writing pretty easily now. From social media posts to media articles, there is now a ChatGPT ‘chhaap’ and it’s replacing unique individual voices with its own. When it comes to images and videos, there is sometimes an AI look and feel to them," Sumanto Chattopadhyay, an independent creative director, said.

"The best ads will now come from a collaboration between human creativity and AI. And the ad person who is the most creative in their use of AI is the one who will come out on top," he noted.

A July 2025 study by job search platform Naukri showed that more than 40% of respondents in advertising and marketing feared 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 at venture capital firm TDV Partners. “There is good value in startups that are building for a variety of use-cases, including ad generation and marketing automation tools for tracking performance."

The rapid rise of AI tools comes at a time when marketing investments have become a key differentiating factor for brands fighting for visibility on competitive e-commerce and quick-commerce platforms. The ability to deploy hyper-personalized ads is now essential for bolstering market share in crowded categories like beauty, personal care, food, and apparel, turning targeted creative work into a matter of competitive leverage, Sutaria said.

“We can create a new ad every day specifically made for different platforms and different target groups and needs. Even different geographies can view different ads based on purchase patterns."

Last year, Mint reported that small brands are scrambling to grab shelf space in quick-commerce dark stores, making marketing spends and uniqueness of campaigns a crucial factor.

Creative dilution

However, several industry executives are sounding an alarm, cautioning that relying too heavily on generative AI could pose a serious risk to brand identity, if not done right.

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

“We are at a stage of the AI revolution where AI is a great co-pilot to test and refine concepts. However, completely replacing human creativity isn’t something we are ready for," said Siddharth Jhawar, country manager at advertising tech company Moloco. “A practitioner’s intuition of consumer behaviour and an artist’s ability to envision new concepts are nuanced and tough to replace."

This fear of brand dilution and inauthentic content — which consumers already trust less — highlights a strategic dilemma: do cost savings outweigh the risk of eroding long-term brand equity?

“The more reliant marketers become on AI to produce content, the less differentiated that content will feel, which will put a premium on higher quality research and writing. If everyone is using the same tool to generate their ads, the market risks becoming flooded with sameness that ultimately erodes brand authenticity," TDV Partners’ Sutaria said.

Moreover, glitches in AI-generated ads are also a concern. Last month, Coca-Cola’s video ads attracted scrutiny on social media viewers about inconsistencies.