Google has launched a suite of AI-driven advertising tools in India, following their U.S. debut in May. The repeal of India’s “Google tax” has made the market more attractive for global tech companies aiming to expand their online advertising presence.
In March, the Indian government abolished the 6% digital advertisement levy effective April, addressing concerns raised by the United States Trade Representative, which had labeled the tax “discriminatory and unreasonable” because it exempted domestic companies. The removal reduces costs for major tech firms including Google, Meta, and Amazon.
New AI Tools for Indian Marketers
During a local Marketing Live event on Thursday, Google unveiled new AI-powered tools tailored for Indian marketers.
One highlighted feature is “Generated for You” within Product Studio. This tool scans shopping catalogs and uses AI to pre-generate relevant images and videos that merchants can save or publish across Google’s platforms.
Another innovation is Smart Bidding Exploration, an opt-in feature for search campaigns that uses AI to identify qualified leads merchants might not typically capture.
Google also introduced new agentic capabilities within Google Ads and Analytics, enabling the AI to learn from datasets, landing pages, assets, and real-time campaign data to optimize business goals.
Early Success and Expanded Ad Formats
Google’s AI Max for Search Campaigns uses machine learning to identify high-performing search queries by analyzing brands’ landing pages, ads, and keyword lists. Early testing with Indian online marketplace Cashify resulted in a 15% increase in conversions and a 12% reduction in customer acquisition costs.
Later this year, ads will start appearing on AI Overviews in India. Additionally, Google has launched shoppable connected TV (CTV) ads on YouTube and will begin serving ads on YouTube’s mobile masthead in India.
YouTube on connected TVs has been India’s most-watched streaming service over the past year, and YouTube Shorts has gained tremendous popularity, with trillions of views since launch. Approximately 87% of Indian consumers use YouTube or Shorts during their shopping journey.
India’s Growing Digital Advertising Market
India, the world’s second-largest internet market, continues to see rapid digital growth. The digital advertising market in India is projected to expand over 20% year-over-year, reaching nearly $7 billion by 2025, according to Dentsu Digital Advertising.
Google’s presence is strong, with gross ad revenue in India rising 11% to ₹312.21 billion ($3.6 billion) in fiscal year 2024, and net advertising revenue increasing 18% to ₹27.43 billion ($320 million).
Google confirmed its new tools support Hindi, improving local campaign relevance. It also introduced urban and rural audience filters at the state level, enabling advertisers to plan, buy, and report media with greater granularity.
What The Author Thinks
India’s digital ecosystem is poised to benefit enormously from Google’s AI-powered ad tools. By combining advanced machine learning with localized language support and granular targeting, Google is enabling marketers to reach consumers more effectively than ever before. This integration marks a key moment where AI becomes a mainstream driver of advertising growth, fueling innovation in one of the world’s fastest-growing digital markets.
Featured image credit: PxHere
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