Some global companies are expanding AI ad production in-house, while analysts say agencies continue to provide strategy, creative direction, and specialist support.

Executives from Kimberly-Clark, Catalyst Brands, and Target India told Reuters that their teams in India are using AI across parts of the marketing process. These include creating product images and videos, choosing influencers, and localising campaigns. The companies are also using AI to write ad copy and optimise campaign performance.

The work is taking place inside global capability centres, which many multinational companies use to support operations across markets. Reuters reported that companies are using these centres to test AI tools for marketing work that has often involved external production teams.

In-housing is already common among major advertisers. WFA and The Observatory International reported that 66% of major multinational brands had an in-house agency, while 21% were considering establishing one.

AI moves more production in-house

Kimberly-Clark said an AI platform built in India has shortened the time needed to create content from 24 days to two hours. Deena Dayalan, head of Kimberly-Clark India, said the tool also supports influencer selection and campaign localisation across different markets.

Catalyst Brands, the parent company of J.C. Penney, is testing computer-generated product images and videos for online listings. India Managing Director Nihar Nidhi told Reuters that the approach could reduce the need to move inventory around the world for photo shoots.

Nidhi said the company’s Bangalore team is leading work on prototypes and pilots. Some of these tools are close to being put into production, he added.

Target is also using AI in its advertising operations. Andrea Zimmerman, president of Target India, said copywriters at Roundel, Target’s ad business, are using AI to produce ads faster and respond more quickly to changing trends.

Zimmerman said the use of AI is helping business partners move more work through the system. She pointed to loyalty and personalisation as other possible areas of use.

The companies cited AI use in production-heavy parts of advertising. These include image generation, copy variation, localisation, and campaign testing.

Marketing budgets have remained flat as a share of company revenue. Gartner’s 2025 CMO Spend Survey found that marketing budgets remained at 7.7% of overall company revenue, unchanged from the previous year.

Agencies face pressure to prove specialist value

A Gartner survey of 405 senior marketing leaders last year found that almost all were using AI to some extent. The survey also found that AI investment accounted for more than 15% of marketing budgets.

Gartner analyst Jay Wilson told Reuters that AI is contributing to stronger interest in in-house agencies. He said agencies that previously competed on size and scale can no longer rely on that advantage alone.

Wilson said strategic and creative thinking will become more important points of difference.

IAB has also reported quality and governance issues linked to AI use in advertising. IAB reported that 70% of marketers had experienced at least one AI-related incident. These included hallucinated outputs, biased or inappropriate content, and off-brand material.

Analysts told Reuters that agencies are expected to remain part of the advertising process, partly because of public distrust of AI and the specialised skills agencies provide.

Brian Wieser, CEO of advisory firm Madison and Wall, said the question is whether clients still see value in expertise. He said companies can produce average work internally if that is enough, but higher-value work still depends on specialist judgement.

Production work that once required external teams, longer timelines, and physical shoots is increasingly being tested inside company-owned operations. Analysts told Reuters that agencies are expected to remain relevant where clients need specialist judgement and expertise.

(Photo by Anthony Rosset)

See also: OpenAI makes ChatGPT ads easier for ecommerce brands

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