Google launched a suite of AI-powered advertising tools in India, mirroring its U.S. debut, following the repeal of India’s 6% digital advertisement levy, which enhances market appeal for global tech firms. This move addresses previous trade concerns and aims to boost digital advertising capabilities within the South Asian nation.
The Indian government, in March, rescinded its 6% levy on digital advertisements, with the change becoming effective in April. This repeal was implemented to address trade concerns previously articulated by the Trump administration. The United States Trade Representative had characterized the levy as “discriminatory and unreasonable” because domestic Indian companies were exempt from its imposition. The elimination of this tax is expected to reduce operational costs for major technology firms, including Google, Meta, and Amazon.
On Thursday, Google conducted the local iteration of its Marketing Live event in India, where it introduced its new AI-powered tools designed for Indian marketers. Among these tools is “Generated for You,” integrated within Product Studio. This feature identifies relevant content opportunities across shopping catalogs and utilizes AI to pre-generate images and videos that merchants can either save or directly publish across Google platforms. Another significant tool is an opt-in feature named Smart Bidding Exploration, specifically for search campaigns. Built upon the existing Smart Bidding framework, this tool employs AI to identify new, qualified leads that merchants typically would not have captured or placed bids on.
Google also unveiled new agentic capabilities within Google Ads and Analytics. Dan Taylor, Vice President for Global Ads at Google, stated during a virtual media roundtable that “These agentic tools can learn from advertising inputs, including datasets, landing pages, assets, and real-time campaign performance, to take the guesswork out of achieving business goals.”
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The company introduced AI Max for Search Campaigns, a tool designed to improve search ad campaign effectiveness. It achieves this by identifying more pertinent and high-performing search queries, learning from brands’ landing pages, their current advertisements, and existing keyword lists. Google reported that Cashify, an Indian online marketplace for used electronics, experienced a 15% increase in conversions and a 12% reduction in customer acquisition costs after deploying AI Max during its early testing phase.
Google also confirmed that advertisements would begin appearing on AI Overviews in India later in the year. Additionally, the company has introduced shoppable connected TV ads on YouTube in India. The YouTube masthead on mobile devices will also commence serving advertisements in the country.
Roma Datta Chobey, managing director of Digital Native Industries at Google India, stated that YouTube on connected TVs has been the most-watched streaming service on television in India over the past year. Furthermore, India has emerged as a significant market for YouTube Shorts, with short videos on the platform recording trillions of views since their introduction. Chobey also noted that 87% of Indian consumers engage with YouTube or Shorts as part of their shopping journey.
India’s digital advertising sector is experiencing growth due to an increasing number of internet users in what is the world’s second-largest internet market. A recent Dentsu Digital Advertising report projects that the country’s digital advertising market will grow over 20% year-over-year, potentially reaching nearly $7 billion by the conclusion of 2025. In response to an inquiry from TechCrunch regarding the timing of the new AI ad tools, Chobey stated, “India is such a thriving digital ecosystem. We have the largest number of users who are actively trying and testing our products. So, that’s really the reason behind us getting these innovations to India faster.”
Google confirmed to TechCrunch that its recently launched features, which include AI Max for Search Campaigns, Smart Bidding Exploration, YouTube’s shoppable masthead and CTV, and Performance Max Retention-Only Mode, all support Hindi to enhance local campaign compatibility. The company also introduced state-level urban and rural audience filters for Indian advertisers, enabling more granular media planning, buying, and reporting.
India has consistently been a key market for Google, not only because it hosts the company’s largest user base but also due to consistent growth in advertising revenues. In the fiscal year 2024, Google’s gross advertising revenue in India increased by 11% year-over-year, reaching ₹312.21 billion ($3.6 billion). Its net advertising revenue during the same period rose by 18%, totaling ₹27.43 billion ($320 million).
