Measuring the impact of Artificial Intelligence on Online Marketing strategies: Evidence from India

Abstract

Artificial Intelligence (AI) has emerged as a transformative force in online marketing, particularly in India, where digital adoption is rapidly accelerating. With over 700 million internet users and a booming e-commerce sector, India presents a unique landscape for AI-driven marketing strategies. This study investigates the measurable impact of AI on online marketing outcomes such as campaign efficiency, consumer engagement, and return on investment (ROI). Using data from 200 Indian companies across sectors like e-commerce, BFSI (Banking, Financial Services, and Insurance), and FMCG (Fast-Moving Consumer Goods), the research employs a two-way ANOVA test to analyse interactions between AI usage levels and performance metrics. Key findings reveal that businesses leveraging AI tools experience a 40% increase in conversion rates and a 25% reduction in operational costs compared to non-users. Additionally, AI enhances customer satisfaction scores by enabling hyper-personalization and real-time engagement. However, challenges such as high implementation costs, lack of technical expertise, and regulatory hurdles persist. This study bridges theoretical and practical gaps by offering actionable insights for Indian marketers and policymakers. It also highlights the need for further exploration of AI’s societal impacts in the Indian context.