Artificial Intelligence in Marketing: Transforming Consumer Engagement & Personalization

Abstract

The integration of Artificial Intelligence (AI) in marketing is revolutionizing how Indian businesses engage with their consumers, enabling real-time personalization and deeper insights into consumer behavior. As of 2023, India had over 880 million internet users, with smartphone penetration crossing over 700 million users, creating a fertile ground for AI-driven marketing innovations. With the Indian digital advertising industry expected to reach ₹35,809 crore (approx. USD 4.3 billion) by 2025, AI technologies such as machine learning, natural language processing, and predictive analytics are increasingly being adopted to drive strategic marketing decisions.

This paper explores the evolving role of AI in the Indian marketing landscape, with a specific focus on its impact on consumer engagement and the personalization of services. Indian brands across sectors—especially e-commerce, fintech, and consumer goods—are deploying AI-based chatbots, recommendation engines, and sentiment analysis tools to tailor interactions and enhance customer experience. For instance, Flipkart uses AI algorithms to offer dynamic product recommendations, while HDFC Bank employs AI for customer service automation, improving response time and accuracy.

Moreover, India's multilingual and culturally diverse consumer base is encouraging brands to use AI for localized content generation and regional language support, increasing engagement across Tier II and Tier III cities. With over 22 official languages and countless dialects, the role of AI in making communication inclusive is both vital and transformative.

The paper also examines challenges such as ethical concerns, data privacy regulations under India’s Digital Personal Data Protection Act (2023), and organizational readiness for AI adoption. It underscores the need for a responsible, transparent, and human-centered approach to AI in marketing.

With upcoming trends such as voice-enabled commerce, AR/VR in advertising, and hyper-personalization gaining traction, AI is set to redefine consumer-brand relationships in India. This study aims to provide a comprehensive view of how AI is not only enhancing marketing outcomes but also reshaping strategic thinking across industries