Agencies using AI as a substitute for human intelligence will be left behind: Srinivasan K Swamy

New Delhi: Consolidation among large multinational advertising holding companies may lead to the realignment of clients and talent, creating opportunities for R K Swamy, the Indian marketing services group said in its FY26 annual report. In its Directors’ Report, the company said the global advertising industry was witnessing increased consolidation and that such developments could result in client and talent movement. R K Swamy said its independent ownership and capabilities across brand and marketing consulting, creative communication, media, data analytics and market research positioned it to offer clients a locally anchored and execution-focused alternative. It also expects to attract professionals looking for greater stability and growth opportunities. Separately, Srinivasan K Swamy, Executive Group Chairman of R K Swamy, said two global companies had combined to create the largest enterprise in the marketing services industry. Swamy said the combination had resulted in “structural re-alignments, presenting distinct challenges and opportunities” for the global and domestic marketing services industries. While he did not name them, the reference was evidently to Omnicom’s acquisition of Interpublic Group, completed in November 2025. He identified the acceleration of artificial intelligence and the changing nature of brand-agency engagement as another challenge. According to Swamy, agencies that master AI and use it as a tool will progress, while “those who use it as a substitute for human intelligence will be left on the wayside." AI should support, not replace, human intelligence Swamy identified artificial intelligence as another major force changing the relationship between brands and agencies. He said agencies that learn to master AI as a tool will progress, while those that treat it as a substitute for human intelligence will be “left on the wayside”. The comment draws a line between using AI to improve marketing execution and allowing it to replace strategic thinking, judgement and creativity. R K Swamy’s annual report also detailed how the group is applying AI and automation to client assignments. For the launch of an electric vehicle, the group used AI-led segmentation and automated journeys on Salesforce to identify and activate consumers with high purchase intent. Personalised communication helped double the lead-to-enquiry rate, while the enquiry-to-booking conversion increased 1.7 times. For a direct-to-home company, R K Swamy brought viewing and recharge information into a unified data ecosystem built on AWS. It added Tableau reporting, Salesforce CDP, predictive modelling and automated customer lifecycle journeys, resulting in a 1.5-times increase in retention. In another assignment, the group used behavioural segmentation and personalised campaigns to improve the adoption of services offered by a payments app. The campaign used customer activity, spending and deposit patterns to increase transactions, card activations and savings volumes. Swamy also flagged the impact of economic uncertainty on advertisers’ priorities. He said supply-chain disruptions and higher oil prices were shifting attention towards immediate, results-driven digital measures and away from traditional long-term brand building. Video production to move in-house R K Swamy is also preparing to bring digital video production in-house, with digital services now accounting for approximately 75% of the group’s consolidated revenue. The company has signed a letter of intent to lease studio space in South Mumbai for the proposed Digital Video Content Production Studio. The facility will produce multilingual and multi-format digital video content. R K Swamy expects the in-house operation to reduce client turnaround times and allow it to “retain production margins that were previously outsourced”. The decision comes as the volume of video content produced by the group rises. R K Swamy produced 1,581 videos in FY26, compared with 957 in the previous year, an increase of about 65%. The number of integrated marketing communication campaigns executed during the year increased to 2,235 from 1,853. R K Swamy had allocated Rs 10.99 crore from its IPO proceeds towards setting up the digital video studio. No amount from this allocation had been used as of March 31, 2026. The annual report said there had been no deviation in the use of IPO funds. However, the company was unable to deploy the entire IPO proceeds by the original March 2026 deadline due to economic and business conditions, the timing of the offer, market conditions and other commercial considerations. Its board and audit committee have extended the deadline for fully utilising the remaining proceeds until the financial year ending March 31, 2029. Consulting unit moves agency higher up the decision chain R K Swamy is also expanding its role beyond advertising execution through its Brand and Marketing Consulting Group. Launched in the first quarter of FY26, the unit has been structured to work directly with founders, chief executives and senior corporate leaders. It combines brand strategy, consumer insights, digital experience, communications and data analytics under a single operation, with the objective of developing business strategies that can also be executed through the wider group. The company said the consulting division had received early operational validation, although it did not disclose the unit’s revenue or client contribution separately. R K Swamy said its wider integrated model brings together consulting, strategy, creative, media, data, research and technology. This allows clients to use one group for brand building, customer acquisition, retention and business transformation. Martech campaign volume more than doubles The group reported a sharp increase in the scale of its customer data and marketing technology operations during FY26. One-to-one customer intelligence campaigns increased to 17.58 billion from 7.75 billion a year earlier. The number of unique customer profiles managed by the company increased to 180.7 million from 166.7 million. Voice-call volumes nearly doubled to 83.54 million from 42.29 million. Its private cloud infrastructure expanded to 235.95 terabytes from 96.40 terabytes. R K Swamy also expanded its Customer Experience Centre by adding 600 seats, increasing its capacity by nearly 50%. The centre was operating at 83% utilisation as of March 31, 2026. The company expects utilisation to cross 90% in the early part of FY27 based on business already secured and present in its client pipeline. Hansa Research, the group’s market research division, added 346 computer-assisted telephone interviewing stations, representing an 86% increase in capacity. Revenue grows 15.8% in FY26 R K Swamy’s consolidated revenue from operations increased 15.8% to Rs 340.75 crore in FY26 from Rs 294.29 crore in the previous year. Total income rose 14.9% to Rs 351.73 crore, while EBITDA increased to Rs 54.49 crore from Rs 41.41 crore. The EBITDA margin on total income improved to 15.49% from 13.52%. Profit after tax increased to Rs 22.11 crore from Rs 18.66 crore. Revenue from operations per full-time employee rose to Rs 26.85 lakh from Rs 16.98 lakh. The company also reduced its dependence on its largest clients. Its top ten clients contributed 41.28% of revenue from operations in FY26, compared with 47.92% in the previous year. The contribution from the top 50 clients declined to 72.94% from 76.07%, while their average revenue per client increased to Rs 4.97 crore from Rs 4.48 crore. The annual report said Indian companies continue to spend substantially less on marketing than businesses in developed markets. Citing industry studies, it said marketing expenditure among Indian companies was around 3% to 4% of revenue, compared with 10% to 11% in the US and Europe. R K Swamy sees the gap as a long-term opportunity as Indian companies increase investments in brand building, customer acquisition and engagement. The annual report was circulated ahead of R K Swamy’s 53rd annual general meeting, scheduled to be held virtually on August 17, 2026.