Imagine telling a friend about a product and then seeing an ad for it on your phone moments later. This eerie coincidence is now common. Marketers are using AI and big data to deliver hyper-personalized ads tailored to each user’s identity, behavior and sometimes emotional state. This trend, often referred to as dark targeting, promises higher engagement and efficiency but raises new ethical and privacy concerns.
Across global and Indian markets, spending on AI-enabled marketing has surged. Marketers say the appeal is clear. Hyper-personalisation improves performance and relevance at scale, and many businesses report that targeted ads generate stronger click-through rates, higher conversions and greater customer retention. Predictions also suggest that digital ad spending in India will continue growing rapidly over the next few years, driven largely by smarter, data-driven targeting.
AI models can now combine browsing habits, location, purchase history and inferred interests to create accurate consumer profiles. Advertisers then serve tailored banners, videos or messages that change in real time depending on user signals. Major platforms have built tools for this purpose. Some global brands use AI to personalise promotional visuals or product videos, showing viewers content matched to their preferences. In India, consumer-facing brands are following suit. E-commerce platforms personalise product recommendations for each shopper. Food delivery apps customise meal suggestions and notifications for individual users and neighbourhoods. Retail and telecom companies run dynamic campaigns where thousands of personalised ad variations are created automatically. These examples show how deeply the Indian market has embraced AI-driven personalisation.
The potential benefits are substantial. Hitesh Nahata of MiQ South Asia explains the appeal clearly. “By leveraging predictive analytics, AI reduces costs through improved bid management and the prevention of ad fraud. This technology enables marketers to scale campaigns efficiently across various platforms and enhance customer experiences with personalised content.” Many marketers echo this view, saying AI helps them reach people more precisely while saving time and resources. Research in multiple markets also shows that personalisation efforts can significantly increase marketing returns.
Yet this power comes with difficult questions. AI-driven personalisation often relies on detailed behavioural tracking that consumers may not fully understand. Modern ad systems observe what people search, what they click, how long they linger and which emotional cues they reveal. Critics argue this begins to resemble surveillance rather than marketing. Some experts point to cases where algorithmic targeting contributed to discrimination, such as showing certain job ads more to men than women. Others highlight patterns where vulnerable users are targeted with sensitive content, such as mental health or financial products, at moments when they may be emotionally exposed. Because AI systems make decisions automatically, users rarely know why they are seeing a particular ad.
The risk of bias is one of the biggest concerns. Nahata warns that “algorithm bias must be prevented in outputs through appropriate checks” and urges companies to strengthen transparency. Another industry voice, Ranjit Thind of Asymmetrique, frames the challenge clearly. “While AI enables hyper-targeted marketing, this mustn’t cross the line into manipulation or over-intrusion, which could alienate consumers rather than engage them. Marketers must navigate these ethical waters carefully.” These comments reflect a broader sentiment among marketing leaders that powerful tools require responsible oversight.
Real-world examples illustrate the tension. Some Indian campaigns show AI personalisation being used positively. A well-known FMCG brand used AI-generated messaging to create hyper-local ads for thousands of neighbourhood kirana stores during a festive season. The campaign allowed small businesses to feature a major film celebrity in personalised promotional videos, boosting both relevance and visibility. Internationally, brands have created personalised video trailers, voiceovers or product showcases using AI. These efforts are generally well received, showing how personalisation can create value without feeling intrusive.
But other incidents highlight the risks. Industry executives recall cases where AI unintentionally paired inappropriate ads with sensitive news stories or pushed content that felt uncomfortably specific. In another example, a dynamic ad engine adjusted visuals and text so aggressively that some users felt the brand was “watching” them. These cases underline why marketers are increasingly cautious about over-personalisation.
In India, the regulatory framework for targeted advertising is still evolving. The Advertising Standards Council of India regulates ad content but does not specifically govern how ads are targeted or how consumer data is used. Historically, only sensitive data categories required strict consent. That is changing. The Digital Personal Data Protection Act, passed in 2023, introduces new rules around consent, transparency and accountability. Companies will need to disclose how data is used and offer clearer opt-out mechanisms. They will also be required to establish grievance systems and designate responsible officers. Many industry analysts believe these rules will significantly alter how digital marketers operate, especially in areas such as audience segmentation and algorithmic targeting.
Meanwhile, brands are already taking steps on their own. Large Indian companies are building internal guidelines for responsible AI use. Several ad-tech firms are testing privacy-preserving methods that target groups rather than individuals. Some brands are avoiding AI-generated human likenesses to prevent misrepresentation. Others are training marketing teams to understand data ethics better and to question how automated decisions are made.
The creative and performance sides of advertising are also changing. Many creative directors say AI should assist, not replace, intuition and cultural understanding. They argue that hyper-personalisation may optimise performance metrics but cannot replace the emotional resonance that human creativity brings. As Sukhleen Aneja, former CEO of a leading consumer brand, puts it, “Gen AI comes with great risks and great opportunities. It is important to tread with caution and for brands to remain authentic and humane.” Her comment reflects a growing belief that personalisation must not override trust.
For Indian marketers, the debate is not about rejecting AI. Adoption is accelerating, and the benefits are significant. The real question is where to draw boundaries so that personalisation does not slip into intrusion. Many brands believe this balance requires three practices: being transparent with consumers, preventing misuse of sensitive inferences and ensuring a human review layer for campaigns that rely heavily on automation.
The future of AI-powered targeting in India will likely revolve around trust. Consumers are becoming more aware of how their data is used, and regulators are taking a keener interest in digital privacy. Marketers who use AI responsibly could deepen customer relationships through relevant, helpful communication. Those who push too far risk backlash and loss of confidence.
Dark targeting is not inherently harmful. It becomes risky when personalisation goes beyond what users expect or understand. The industry now faces a pivotal moment. AI can make ads smarter, faster and more engaging, but only if brands commit to ethical use. The challenge is to ensure that personalisation feels like a service, not surveillance. The brands that succeed will be those that treat AI as a tool for relevance and respect, not control.
Disclaimer: All data points and statistics are attributed to published research studies and verified market research. All quotes are either sourced directly or attributed to public statements.
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