MAM
Is India ready for the impact of AI on marketing?
MUMBAI: From self-driving cars to voice assistants Siri and Alexa, artificial intelligence (AI) is expeditiously becoming popular. While one may think of AI only as intelligent robots or technology, it encompasses everything from Google’s search algorithm to e-commerce to geo-target and understanding consumer behaviour.
AI has taken a hold of the advertising and marketing industry too along with big data, analytics, machine learning (ML), and chatbots. Not one advertising or marketing conference goes by without one or more sessions on the subject.
It was in 2017 that marketers realised the leverage AI and ML provided. But the reality is far from the hype as marketers in India and around the world are still unacquainted with the technology and the benefit it can add to business.
Today, companies are gathering thousands of records from each consumer touch point. They have the entire database of what their consumer is searching for, from which device and how long before they actually purchase it. Companies can also trace the consumer’s likes and dislikes by scrutinising their customer profile. This large set of data about consumer behaviour, which is also known as big data, provides definite information to brands that can help their business. This is where AI comes into the picture.
AI in marketing terms consists of machine learning, deep learning and natural language processing applications. But the hard reality is that many of the tools that are being marketed as AI are still in their primitive form and there is a long way before companies can actually begin to use AI to yield better results. Currently, a lot of brands feel the urgency to adopt the modern and new technologies to keep up with the changing marketing dynamics, but AI, just like any other technical tool, is not a magic solution and requires time, resources and money.
Though the name sounds fancy, it may not be essential for every brand to jump on the bandwagon. Agencies, being industry experts, first need to familiarise themselves with how best to use AI for their client before even discussing client readiness of AI in marketing strategy. Setting the record straight, The Glitch managing partner and business head Kabir Kochhar says that the first step to getting clients interested in using these tools by showing them the money. “Showing improved return on investment will get clients to take notice and giving them deeper insights into their customers will allow and inform them on their future product roadmaps,” he says.
For instance, predictive analytics allows online players like Amazon, Netflix, Hotstar, Myntra, Flipkart and YouTube among others to surface and finesse recommendations. Putting together information from diverse datasets is a common use of AI. Even the most advanced tech firms in Silicon Valley are just beginning to unearth its possibilities. Dentsu Aegis Network chief data officer Gautam Mehra suggests that if media companies do not catch up, it’s definitely going to affect them as we do see the local OTT players and even telecoms such as Jio building significant data practices.
In spite of all the automation and move to programmatic, there are large parts of media planning and strategy that are still being done laboriously by human intervention. While stating that currently only some really sharp media planners will come up with half a dozen hypotheses and run tests that either prove or disprove the same, Indigo Consulting national head of strategy Devang Raiyani believes that going forward, a few startups will lead this and big media players will wait till some of them acquire critical mass and acquire them.
The revolution of AI in marketing has been propelled by the advent of affordable and advanced data analytics tools, extensive datasets and a growing acceptance of the data-driven approach to marketing decision making by marketers. With the advent of cloud computing, it’s very easy to scale without having to make large upfront investments. Most of the cost to use an AI system is rarely the system itself, but in ensuring you have the right data in the right format prepared for the AI engine. While stating that certain AI systems require some level of initial investment in technology, Mehra points out that these, however, sustain themselves within a year and hence it’s not really a CapEx investment in that sense. And then there are AI systems that are absolutely turn-key and pay-per-use.
It is a herculean task for agencies to convince clients unaware of AI to use the technology. In such cases, Raiyani opines that the best way is to prove the use-cases at the fringes, create a few proof of concepts before betting big as the challenge with most Indian companies is that data available is not very clean and highly fragmented across touch-points. He believes that it will be the GAFAs (Google – Apple – Facebook – Amazon) of the world who will lead this change.
Kochhar thinks that the grasp of terms such as AI and big data are theoretical and in practice, we’re just scratching the surface on how AI can transform industries. “For now, agencies need to think of it as a tool of inspiration for the copywriter as it will essentially eliminate a bunch of A/B testing we currently do to see the effectiveness of communication,” he says.
AI in creative advertising has been touted as a replacement to human copy although there’s still a long way to go for that since, in advertising, context is everything and the nuances of language still need to be mastered. AI will help throw up more insights based on user interaction with ads and act as a guide showcasing the types of communication routes that can have a higher impact on the end user.
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Starting a business is one of the most financially demanding transitions a person can make. In the early months, expenses are immediate and often unpredictable, while revenue streams may take time to stabilise. For first-time entrepreneurs, securing small business loans can feel like a paradox: lenders expect a clean financial track-record before approving a loan, but the business cannot establish that track record without funding. Understanding the start-up lending environment in India and knowing the realistic funding options make this process far less daunting, allowing entrepreneurs to plan strategically.
Why Traditional Business Loans Are Harder for Start-ups
Most financial institutions require a minimum business vintage of 2 to 3 years before approving a term loan. This is because the first two years of operations carry the highest risk of failure. For start-ups less than 12 months old, traditional loan options are limited, and lenders often ask for substantial collateral to mitigate risk.
The vintage requirement is not arbitrary. Businesses that have survived their first two operating cycles demonstrate market viability, which significantly lowers the lender’s risk. Until this milestone is reached, entrepreneurs often rely on bootstrapping, personal savings, or alternative financing to build a stable business foundation. Understanding this reality helps first-time entrepreneurs set practical expectations when seeking funding.
Government-Linked Schemes for Startups
India offers several government-backed schemes to support first-time entrepreneurs. One such scheme is the Pradhan Mantri Mudra Yojana (PMMY), which provides collateral-free loans for micro and small enterprises in three categories:
● Shishu: up to Rs. 50,000
● Kishore: Rs. 50,000 to Rs. 5 lakh
● Tarun: Rs. 5 lakh to Rs. 10 lakh
These loans are available through eligible lending institutions, making them suitable for early-stage businesses. For first-time entrepreneurs, a Mudra loan not only provides initial working capital but also helps establish a credit history. Repaying a Mudra loan on time strengthens the entrepreneur’s profile and increases the chances of securing larger loans in the future.
Using Personal Loans to Fund Early-Stage Needs
When business loan eligibility is not yet established, a personal loan can serve as bridge funding. These loans are assessed on the individual’s credit profile and income rather than the business’s financial history, making them accessible to salaried individuals or those with a strong personal credit record.
Personal loans have limitations: the loan amount is capped based on personal income, and the interest rate is typically higher than secured business loans. Nevertheless, taking out a personal loan during the first 12 to 18 months can provide crucial support as the start-up builds its financial profile. It is especially useful for covering immediate expenses such as inventory, marketing, or office setup costs.
Alternative Financing Options for Startups
For start-ups that are not yet eligible for traditional business loans, other financing options are available through financial institutions. Many lenders offer startup-focused or small-business loans designed for early-stage businesses. These loans evaluate the entrepreneur’s personal credit profile, business plan, and projected revenue rather than relying solely on business vintage. Financial institutions such as Tata Capital provide these loans with minimal documentation and fast disbursal, enabling entrepreneurs to manage operational expenses, purchase equipment, or fund early growth initiatives without pledging collateral.
Some lenders also offer flexible loan amounts, quicker approvals, and streamlined processes, making them well-suited for first-time entrepreneurs. Exploring these options early allows start-ups to access working capital while gradually building a credit history that will support larger loans in the future.
Building the Right Financial Profile Before Applying
For entrepreneurs planning to apply for a business loan in 12 to 18 months, the preparation period is critical. Key steps include:
● Filing Income Tax Returns (ITRs) consistently and accurately from the first year
● Maintaining a clean current account with regular deposits and no overdraft patterns
● Keeping the promoter’s CIBIL score above 750
Lenders assess start-ups by examining these signals. Entrepreneurs who maintain financial discipline from the start will have stronger loan applications after two years. Additionally, tracking cash flow and avoiding irregular withdrawals can further enhance the business’s credibility.
Collateral-Based Options for Larger Requirements
Startups requiring larger amounts beyond government schemes can consider loans against property. These loans allow entrepreneurs to access larger amounts of funding at lower interest rates, as the property secures the lender’s risk.
This option carries significant risk: using personal or family assets as collateral can result in a loss if the business does not perform as expected. Such loans should be considered only when the business plan is validated, the entrepreneur has clear cash flow projections, and the repayment strategy is realistic. Careful assessment of risk versus reward is essential before pledging assets.
Practical Steps to Strengthen Your Loan Application
To maximise the chances of approval, entrepreneurs should:
● Maintain accurate financial statements, bank records, and GST returns.
● Avoid over-borrowing; apply for realistic amounts that match business needs.
● Keep personal and business credit profiles in good standing.
● Explore lenders that offer startup-friendly products.
● Be transparent and complete in all documentation.
Taking these steps early ensures a smoother and faster loan process when the business is ready for formal financing. A well-prepared application reduces processing delays and demonstrates professionalism to the lender.
Conclusion
First-time entrepreneurs often face a funding gap in the early stages, but it is usually smaller than it appears. Maintaining clean banking records, filing ITRs consistently, and exploring personal loans, government schemes, and alternative financing options help build a strong financial profile. Entrepreneurs who plan systematically from day one are better positioned to access formal credit sooner, giving their start-ups financial stability through small business loans.
The ideal time to start building a credit-worthy business profile is the very first month of operations, not when applying for a loan. By understanding available funding options and acting proactively, first-time entrepreneurs can confidently apply for a business loan and set their businesses on a path to long-term growth.
