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Foodtech major Zomato has announced a ban on AI-generated images in restaurant partners' menus and marketing materials in a bid to prevent misleading advertisements. The new policy, effective from Monday, September 16, comes with the warning that restaurants failing to comply will be delisted from the platform.

Zomato's CEO of food ordering and delivery, Rakesh Ranjan, explained the move in an interview with Financial Express, noting that while the issue of AI-generated images is not yet widespread, the company aims to address the problem in its early stages. Despite this ban, Ranjan emphasized that AI will remain crucial for cataloguing and quick commerce operations.

The decision follows a statement made last month by Zomato founder and CEO Deepinder Goyal, who urged restaurants to avoid using AI to generate dish images. "We will actively start removing such images from menus by the end of this month," Goyal said in a post on X (formerly Twitter), citing customer complaints, higher refund rates, and lower ratings due to AI-generated images. 

To support restaurants in adapting to the new policy, Zomato has introduced discounted photoshoot services, offering professional photography at rates between INR 4,000-5,000, depending on how much of the menu requires new images.

By comparison, small restaurants typically spend between INR 7,000-15,000 for photoshoots that cover around 70% of their menus, according to the report.

This development comes as Indian enterprises increasingly adopt AI-driven solution amid the global rise of generative AI (GenAI).

Last year, Zomato appointed a head of AI product development and launched its Zomato AI chatbot to enhance user experience with personalized recommendations and improved customer support. 

Zomato's main rival, Swiggy, is also embracing AI, having partnered with Sypne.ai to offer AI-powered photoshoot services to its restaurants partners. Additionally, Swiggy is testing an AI chatbot, 'neural search,' aimed at providing personalized recommendations based on open-ended queries, further fuelling competition in the Indian foodtech space.

Zomato bans AI-generated images from menus with immediate effect

Swiggy in its annual report for FY23-24 reported that they have reduced spending on marketing and promotion compared to last year. The Bengaluru based company spent Rs 1,581 crore in FY24 as compared to Rs 2,501 crore last year. The food aggregator app also reported that a former junior employee embezzled Rs 33 crore over a period of time. 

The company asked an “external team” to investigate the matter and filed a "legal complaint" against the former employee. The annual reports states, "The Group, during the current year, identified embezzlement of funds in one of the subsidiaries by a former junior employee amounting to Rs 326.76 million over the past periods." 
"Based on review of the facts discovered during the investigation, the Group has recorded an expense for the aforementioned amount during the year ended March 31, 2024."

Swiggy is looking to raise up to Rs 3,750 crore (around $450 million) through a fresh issue and up to Rs 6,664 crore (around $800 million) as an offer-for-sale (OFS) component in its $1.25 billion IPO later this year. 
The food-delivery company’s revenue grew 36 percent to Rs 11,247 crore in FY24, the annual report said. It narrowed losses to 44 percent from Rs 4,179 crore to Rs 2,350 crore, as it curtailed expenses.

It spent Rs 13,947 crore in FY24, 8 percent lower than the previous year as it cut down its promotion and marketing spending from Rs 2,501 crore in FY23 to Rs 1,851 crore in FY24.

Despite the improving finances, Swiggy lagged its rival Zomato during the year. On a gross order value (GOV) basis – which totaled to around Rs 56,924 crore between the two companies in FY24 – Swiggy had a market share of 43 percent in the food delivery industry and Zomato was the market leader with a 57 percent share in FY24.


Swiggy spent Rs 1,581 crore on marketing, says junior employee embezzled Rs 33 crore

Zomato's standalone spending on advertisement, sales, and promotion has increased by 84% to Rs 340 crore in the first quarter (April-June) in the current fiscal year FY25. In the last fiscal, the company spent Rs 184 crore on ads.

The online food delivery platform's standalone revenue from operation stood at Rs 2,048 crore between April to June quarter in FY25 from Rs 1,420 crore in the same period last fiscal.

The standalone net profit of Zomato in the first quarter stood at Rs 470 crore from Rs 276 crore in the same period in FY24.

	
<a href="https://www.storyboard18.com/advertising/zee-entertainment-q1-fy25-net-profit-rises-to-rs-118-crore-ad-revenue-declines-by-3-6-38363.htm">Zee Entertainment Q1 net profit rises to Rs 118 crore; ad revenue declines by 3.6%</a>

The company registered a consolidated profit of Rs 253 crore between April and June FY25. Zomato's consolidated spending on ads and promotion in Q1 stood at Rs 396 crore.

In a stock exchange filing, Zomato said that there has been a 53% growth in its gross order value across all B2C businesses (food delivery, quick commerce, and Going-out) in Q1 FY25 to Rs 15,455 crore.

The adjusted EBITDA was up by Rs 287 crore YoY to Rs 299 crore between April-June in FY25.

<a href="https://www.storyboard18.com/how-it-works/zomato-reports-net-profit-of-rs-175-crore-for-the-january-march-31358.htm">Zomato reports net profit of Rs 175 crore for the January-March</a>

Meanwhile, Albinder Dhindsa, chief executive officer of Blinkit, said the company has planned to get 2,000 dark stores in the top 10 cities in the country by the end of 2026 for its quick commerce business.

The gross added value throughout per dark store has grown from Rs 6 lakh per store to about Rs 10 lakh, Albinder said. At present, Zomato has a total of 639 dark stores.

Zomato's ad spendings rise by 84% to Rs 340 cr in Q1 FY25

Zomato has done it again. The online food delivery company has yet again managed to start a boycott trend with its new campaign featuring Hrithik Roshan. This was the brand’s first attempt at using deepfake technology. What won Cadbury's Cannes Lions-winning campaign applause, clearly didn’t work for Zomato. Angry priests and hurt netizens pushed the brand to withdraw the ad.

However, domain experts do not blame the brand. According to them, Zomato was just trying to promote local businesses with the help of technology.

“Every word is scrutinized these days and people somehow have become over sensitive. Zomato has been successful with their tongue-in-cheek content and the campaign was an extension of the overall messaging. They didn’t deserve the trolling,” says N Chandramouli, chief executive officer (CEO) of Mumbai-based brand intelligence and advisory firm TRA Research.

This is not the first time the brand has found itself in a boycott saga.

<strong>Shockvertising </strong>

It is, in fact, the third time in a row that a campaign from the brand has received  backlash. One of the first campaigns that didn’t go down well was the brand’s outdoor campaign where the letters "MC.BC." (mac n’ cheese, butter chicken) were used in a creative way. Even though they were used as abbreviations of food item names, there was no fooling the crowd. People called out Zomato for pushing "sexist" and "cheap" messaging.

Then there was the 'Har Customer Hai star' campaign last year. When the campaign went live across TV and digital, people took offence because the spot showed how the delivery executive did not even have the time to take a selfie with Hrithik Roshan who also ended up calling the delivery executive 'Jadoo' (the alien character from Roshan’s film Koi Mil Gaya).

While the focus of the brand was to portray how every customer is important and calling the valet Jadoo was more about his super power of quickness, that was not how the ad was perceived.

There were questions on the gig economy, treatment of delivery agents, the impact of celebrity endorsements and, of course, brand culture.

<strong>Advertising in sensitive times </strong>

Talking of brand culture, Rutu Mody-Kamdar Founder of Jigsaw Brand Consultants, says Zomato’s content is reflective of their brand ethos which is fun, impulsive and tongue in cheek and off the traditional path.

“Unfortunately hypersensitivity has been dominating the way we respond to situations. Zomato is an iconoclastic brand and brands like this have no option but to face the reactions to their actions and wait for the controversy to fizzle out” she said.

"Sensitivity" is a very thin line in the world of advertising, and creators often find themselves on the wrong side of it, unintentionally says another industry expert who didn't want to be named. "Brands definitely need to be more careful and avoid any prejudice or stereotyping. Brands should be cautious not to rub religious sentiments the wrong way.”

<strong>Never too late to apologise</strong>

Looks like Zomato didn’t want to earn further ire of the Ujjain priests who were offended by the mention of Malakal in the brand's hyperlocal ad. They not only took down the ad but also issued a clarification that said, “The Hrithik Roshan-starrer ad that ran in certain pincodes of Ujjain referenced ‘thalis’ at ‘Mahakal Restaurant’, and not the revered Shree Mahakaleshwar Temple. Mahakal Restaurant is one of our high order-volume restaurant partners in Ujjain, and thali is a recommended item on its menu.”

The note further said, “The video is part of a pan-India campaign for which we identified top local restaurants and their top dishes based on popularity in each city. Mahakal Restaurant (simplified as ‘Mahakal’) was one of the restaurants chosen for the campaign in Ujjain. We deeply respect the sentiments of the people of Ujjain, and the ad in question is no longer running. We offer our sincerest apologies, for the intent here was never to hurt anyone's beliefs and sentiments.”


Why doesn’t controversy go off the menu for Zomato ads?

Meme marketing is becoming the latest tool in companies’ digital marketing arsenal. More companies are devoting a bigger portion of their budget than ever before towards meme marketing, and specialised companies are stepping in to help them go viral.

But why memes? “That is the language that Netizens understand. People don’t want to be preached to. Memes subtly integrate brand messaging into conversation,” says Aditya Sobti, creative lead at Schbang, a creative and digital transformation agency. “Customers don’t know their time has been taken (by a brand).”

Take the case of the recent trailer for the movie Brahmastra, starring Ranbir Kapoor, Alia Bhatt and Amitabh Bachchan, among others. A dialogue said by Kapoor’s character Shiva in the trailer – ‘Kuch rishta hai mera aag se (I have a strange connection with fire)’ – quickly became a meme. Several brands like Tinder, Dunzo, Zepto and Voot were quick to catch on, and posted their own variations of the meme.

“Memes are a part of our day-to-day lives,” says Saksham Jadon, founder of Youngun, a meme marketing agency that was started in 2019. “And brands want to be part of internet conversations.”

Youngun handles clients such as Netflix, PepsiCo, Swiggy and Cred.

<strong>A short history of meme marketing</strong>

According to Sobti from Schbang, the meme marketing trend in India was started around 2018 by brands like Zomato and Swiggy, both of which are in the food-delivery space.

Many startups typically didn’t have much money to spend on recurring campaigns that are heavy on print ads and TV commercials, which are typically expensive.

Instead, they relied on a more irreverent – and practically free – marketing style which involves catching on to the latest trending topics online and putting the brand’s spin on it. And this often involved memes.

An analysis of Google Trends indicates that the search term ‘meme’ had been slowly gaining in popularity in India since around 2013. When compared to the worldwide trend, growth in India was slow.

The real spike happened during the pandemic-induced lockdowns in March 2020, when millions of people all across the world were stuck at home, with little other than their phones and laptops in the way of entertainment. While worldwide interest in memes grew at that time, India’s growth was much faster, and stabilised at about 75% of those levels since then.

Startups and their marketing teams were quick to catch on. The ability to make memes is even a part of the job description for a social media role at a startup. Fintech unicorn Slice even has a ‘Chief Meme Officer’.

<strong>The method to the viral madness</strong>

Brands that don’t have their own meme makers go to agencies like Jadon. “We’ve cracked how to make it so organic that even news publishers will pick it up. We make sure it’s worth people’s time.”

For instance, Youngun handled the meme marketing for the recent ‘Ranveer vs Wild with Bear Grylls’ web episode, featuring actor Ranveer Singh. The trailer sparked a meme fest, and ended up getting covered by several news outlets.

Brands are also exploring user-generated memes, but with a caveat.

Meme Chat, a meme community social media app started in 2019, enables brands to take this route. Kyle Fernandes, 24-year-old co-founder and CEO of Meme Chat, explains how the process works, “A brand sponsors a meme template. Our users generate thousands of memes, which are curated by moderators. The best ones are shows to the brand. If a user’s meme gets selected by the brand, they get paid Rs.5-10.”

The chosen memes are propagated across meme pages on Facebook and Instagram. Meme Chat said it owns 100 meme pages with a total following of 60mn and has tie-ups with another 300 that have a following of 540mn, meaning it can tap a collective following of 600mn.

[caption id="attachment_1307" align="aligncenter" width="700"]<img class="size-full wp-image-1307" src="https://images.storyboard18.com/storyboard18/Kuch-viral-bana-do-yaar.jpg" alt="Kuch viral bana do yaar" width="700" height="1200" /> Kuch viral bana do yaar[/caption]

Meme Chat has done campaigns for companies such as Britannia, Moj (owned by ShareChat) and films like Jugjugg Jeeyo. Last year, the company raised $1mn in a funding round led by BeeNext, a Singapore-based venture capital firm.

OTT platforms are the biggest clients for meme marketing agencies, followed by e-commerce and digital startups.

Sometimes, memes can also be "seeded" via influencers and content creators – they either repost these memes, or make their own versions of them. And when multiple brands are handled by a single agency, the agencies ensure the brands end up participating in each other's meme trends online, seemingly organically.

Larger, more traditional companies are slow to the uptake, says Sobti. Lawsuits arising from copyright infringement are the main concern, even though lawsuits like these are rare.

Way back in 2015, Getty Images asked GetDigital, a German blog, to pay licensing fees for using a picture of a penguin from their image database to create what would become a widely popular meme called ‘Socially Awkward Penguin’.Getty said they were trying to protect the livelihoods of photographers who click such photos. GetDigital was also asked to keep quiet about it. They didn’t.

In a later report by Huffpost, Getty said they had pursued similar action against several such blogs who used images in this manner.

“Companies like Jio and Britannia have a lot to lose,” says Sobti. “It’s been tough to convince them, (but) slowly and steadily, brands are warming up to the opportunity – they know they will lose out on social media reach otherwise.”

Britannia recently launched a meme campaign for the launch of a new biscuit. The campaign was managed by Schbang and Meme Chat.

<strong>A numbers game</strong>

Meme marketing companies can change anywhere between Rs.2 lakh to Rs.3 crore, depending on the duration of the project.

Memes are now becoming a bigger part of companies’ marketing budgets. Snehil Khanor, CEO of Indian dating app TrulyMadly says that meme marketing now makes up 30-40% of his content marketing budget, up from 7-10% when they first started meme marketing about two and half years ago.

“We see very good engagement for memes versus other posts. Users are able to relate to it – it doesn’t seem like advertising,” says Khanor. Video memes are now becoming more popular versus static ones, says Khanor.

What constitutes virality? It depends on who you ask. Fernandes says that it would have to be about 10 million in reach and engagement numbers would constitute virality. Jadon says that it’s viral when news publishers organically pick up stories on memes, or the meme makes it to the meme review video of an influencer like Tanmay Bhat.

But sometimes, it’s hard to tell what’s organic and what’s not.

For instance, a recent meme that went viral was a screenshot of a WhatsApp conversation between a college student and his dad. Storyboard18 spoke to the original poster of the meme, 23-year-old engineering student Jitu Malani from Ajmer. Malani, who posts memes on his Twitter page, said he had no idea that this screenshot would go viral. Malani said he was approached by a few news outlets after the meme went viral, although not by the brand itself.

While the meme appears not to have been posted by the brand, the story was picked up by several news organisations. Jadon put up a LinkedIn post with screenshots of the coverage, with the caption ‘Remember this viral meme? Work by Youngun – a Meme Marketing agency for Swiggy’.

Similarly, yet another viral post by Swiggy shows signs of the blurring lines between brand-led and organic viral content.

In this case, it was a video of a man on a horse carrying a Swiggy delivery box. Three days later, the brand put out a tongue-in-cheek notice saying it had taken note of the viral video, and announced a reward for whoever identified the horseman. The day after that, the app’s delivery status section had a modification which showed a man on a horse, instead of the usual bike.

A week after the meme went viral, the company put out another letter, saying it had identified the horseman, as well as the person who shot the video.

Sobti says that, typically, changes to an app take weeks to plan and execute. He added that this particular meme was considered a well-executed campaign in marketing circles because of how organic it looked.

In response to questions about the story, Swiggy sent links to the notices it posted on its official Instagram page (described above).

Sobti says there’s no harm in marketers trying their best to make memes look as organic as they can.

The audience has a few laughs, and the brand wins too.

[caption id="attachment_1306" align="aligncenter" width="700"]<img class="size-full wp-image-1306" src="https://images.storyboard18.com/storyboard18/Manufacturing-Memes-How-meme-marketing-works.jpg" alt="Manufacturing Memes - How Meme marketing works" width="700" height="700" /> Manufacturing Memes - How Meme marketing works[/caption]

Engineering the viral: The science behind meme marketing

Hrithik Roshan is a special forces agent in a bulletproof vest who is seated in a black van, holding a gun. Along with him are several other agents. Suddenly, they hear a knock on the door. As soon as they open it, the group point their guns at the intruder - a Zomato delivery man who is as shocked as they.

As one of them asks, "Yeh kisne mangaaya?" Roshan replies, “Maine! Burger ka mann kiya. Sirsa main hain, toh Grillmasters se mangaliya.” But the name of the dish, the restaurant and the city and locality changes every time depending on the ad’s viewer - and their phone’s GPS.

This is Zomato’s hyper-localised campaign that claims to use deepfake technology to deliver personalized messages to audiences.

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At the 2022 Cannes Lions International Festival of Creativity, another hyper-localised campaign - ‘Not Just a Cadbury ad’, by Ogilvy India and Wavemaker, which featured actor Shah Rukh Khan, brought home a Titanium Lion. The brand made use of machine learning to recreate the actor’s face and voice to highlight the names of various local stores in the ad, extending help to hundreds of small business owners who were deeply affected by the lockdown.

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Pepsi and Ageas Life Insurance have also used the technology to create a much younger Salman Khan and Sachin Tendulkar in their commercials.

<iframe title="YouTube video player" src="https://www.youtube.com/embed/lYIj7rkR8VY" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe>

Brands are playing and experimenting with new technologies to give audiences something new and to break through the clutter.

<strong>But what is the technology and how does it work?</strong>

Rephrase.ai’s founder Ashray Malhotra refers to the technology driving these campaigns as ‘synthetic media’. “Every person thinks synthetic media is deepfake. If someone even generates Shah Rukh Khan’s voice, that gets labelled as deepfake voice. But, that is not how it began,” says Malhotra, whose company uses artificial intelligence technology to create hyper-personalized videos for brands and businesses.

In fact, deepfake tech turned into a menace and continues to be so.

Deepfake technology, which is a combination of two concepts ‘deep learning’ and ‘fake’, was initially used for creating pornographic representations of women. Today, this technology is also used to fool recruiters and voters.

But it has other useful applications. Marketers have begun using the technology to help brands communicate and reach their audiences in what they hope are more engaging ways.

<strong>How it works</strong>

Speaking about the Zomato campaign featuring Hrithik Roshan, the company's spokesperson tells us, “Business owners—big and small—dream of having Bollywood celebrities endorse them. We wanted to give a platform to the restaurant partners that have helped Zomato reach over 1000 cities and have helped serve millions of consumers.”

Four months in the making, the company shares, “AI technology married with some smart targeting on Google and Facebook helped us land a relevant message for the viewers at a mass scale.”

Zomato partnered with Gan Studio, a startup with focus on state of art algorithms.

This campaign was also advertising agency Enormous’ first experience with experimenting with AI-driven technology in crafting a narrative around the brand and its proposition. The agency’s managing partner Ashish Khazanchi mentions that this technology is of great use when the distribution of advertisements is through digital.

“When it comes to distribution, deepfake does make for a lot of interactivity, and a lot of personalisation of assets. It works well when you are trying to create personalized content for people. Therefore, you can have any number of output which would work very well for a hyperlocal market, or a pin pointed kind of a distribution strategy,” explains Khazanchi.

Saumya Rathor, Category Lead, Pepsi Cola, PepsiCo India, agrees with Khazanchi. She says, "With the acceleration of a digital forward communications approach, audiences are turning towards a technologically advanced way of consuming information."

Malhotra looks at it as an evolution of marketing. “The end goal of a marketer is to talk to their audience in a personalized manner, and in a video format which is the most effective. Hence, personalization plus videos is what synthetic media now enables, and one can see more and more marketers make use of this technology,” he says.

Bengaluru-based Rephrase.ai builds generative AI tools to ease video creation. Its clients include Cadbury, Castrol, Raymond, online teaching platform Classplus, edtech startup Sunstone, and learning platform White Hat Jr as clients.

Rephrase.ai has also worked with CXOs like Titan Company’s Ajoy Chawla, CoinDCX’s Minal Thukral, DBS Singapore’s Royce Teo, Becton Dickinson’s Pavan Mocherla, Bagic’s Tapan Singhel, Johnson &amp; Johnson Vision’s Sherri Ferstler, and Meesho’s Vidit Aatrey.

<strong>Inclusion of deepfake in advertising: Critical stages</strong>

Khazanchi explains that the critical stage is always finding the right kind of idea where technology would be of use.

In the case of Zomato, it made sense to the agency due to specific restaurants, and specific dishes in specific parts of the country. He says, “You need to shoot in a static block where you do not need too many changes in the backdrop. You will want the person to be stationed in that particular place. There is enough data captured using a celebrity so that all we have is the information on the way he or she would speak or intonate any particular part of him or her.”

Speaking of the Pepsi campaign, which recreated a scene from the 1994 Bollywood super hit Hum Aapke Hain Kaun, Rathor says, "To start with ensuring that we got the right script to do justice to an iconic character of Indian cinema was a task. We had to ensure that while we make the film quirky, witty, fun, it had to be respectful to the character. At the same time, there is so much love for Prem (Salman Khan’s character in Hum Aapke Hain Kaun) that we knew there would always be high expectations from the audiences while recreating this avatar."

<strong>That's the tale. Now, what about tech?</strong>

Rephrase.ai’s Malhotra recalls the three steps involved while rolling out a campaign involving deepfake technology. Step one: creating a clone. A video is recorded for a few minutes. Then the video is handed over to a machine learning algorithm, which trains for a few days, and creates a clone of the person’s face and voice.

Step two is integration and testing. Malhotra explains, “This process is different for every company. If you want to integrate with your customised relationship management (CRM), which means, as soon as a new customer signs up, they get a personalised video from, say the CEO of the company, we need to integrate the AI generated clone in the middle of the pipeline.”

Step three is deployment, where it is decided that this is a live process. Anybody can type in a name and a video gets generated which can be sent via any medium. “The timeline for the creation of a campaign with the inclusion of this technology on an average takes two weeks. For a concerned campaign, we have done it in as short as five to six days,” adds Malhotra.

For ‘Not Just a Cadbury ad’, it took two weeks and Rephrase.ai created five different avatars of Khan. This was done parallelly because he was in five different locations. Plus, Google Maps API was used to highlight the names of the shops. Malhotra mentions, “The initial intention was to create 20,000 videos. But, we went as high as 1,40,000 videos in a span of 10 days.”

Given Salman Khan's popularity, Pepsi's ad was also well received by audiences and "got social media brimming with conversations through media and memes on the return of Salman's iconic character 'Prem'," adds Rathor.

<strong>Putting in checks and balances</strong>

Since Rephrase.ai works with well-known personalities, it recommends companies add the ‘Assured by Rephrase.ai’ logo. Malhotra says, “The logo assures brands that even if something goes wrong, they can say that the video was AI generated, and not of the actual celebrity or executive.”

In the case of celebrities, every video is created with written consent. Malhotra says, ‘Even though brands have the ability to create new videos, they don’t have the authority until and unless they obtain consent. When the final video—besides the written scripts—is created, they are also sent to the celebrity for approval to ensure that they are comfortable with the final video going out. This means that in every part of the process, they are in control of what goes out.”

In the case of customers, ‘Assured by Rephrase.ai’ logo is added to highlight that the video was created with permission and consent of the person in the video.

<strong>Can’t fake creativity</strong>

For agencies and creators, there’s also the additional challenge of how to keep refreshing the use of the technology in campaigns.

Khazanchi says the challenge will always be creativity, and not technology. “It is not that challenging to shoot because the basics are simple. Now what to do, and who to do it for, that is where the challenge lies,” he adds.

The managing partner says, “The bigger challenge would also be crafting a new narrative so that it always stays fresh. Since three to four brands have already experimented with this technology, you have to find a way of making use of it which makes a lot of sense and is still new.”

The point is to find a way to marry creativity and technology to create clutter-breaking work, and not let technology consume creativity.

ZOMATO