Decoding Google’s AI Push For Its $3.7 Bn Indian Ads Empire

Indian quick commerce unicorn Zepto launched high-quality video ads from static images using Google’s Veo 1 AI model for video creation. It took Zepto just a few hours for the software to stitch together visuals, motion, and captions.  

Thanks to the power of AI-generated videos, installs for the Zepto app surged 100% and advertising efficiency improved by 11%, according to what Google India claims. But this is just one example of how Google is banking on AI and GenAI to revamp its $3.7 Bn Indian ads business. 

Thanks to this, blitzscaling is indeed going through a big shift — not just in India, but across the world. It’s no longer about spending millions on ads, but being smart about where the money goes. Like sportswear giant Nike, which used data from the Nike Fit app to bring personalised shoes to customers in the US. Similarly, Indian startups are jumping on the AI bandwagon, a market that Google and Meta are both keenly eyeing.  

Google India registered an 11% surge in gross advertising revenues in FY24 to INR 31,221 Cr — close to $3.7 Bn — according to its filing with the Registrar Of Companies, boosted by the early adoption of its AI tools. The company’s closest rival Meta, too, saw its advertising revenues grow by 24% to INR 22,730 Cr, thanks to Instagram and Facebook ads. 

The shift shows a trend that was triggered by an evolving consumer behaviour and that went on to redefine consumer preferences. While conventional search engines have not turned completely obsolete, tech companies are rolling out AI-powered tools to make the searches more refined and helping brands and businesses garner better returns on their marketing and advertising spends.

As India represents a key advertising market for Google with a client base spanning D2C brands, BFSI, retail, MSMEs and startups, there’s heightened emphasis from the tech giant to capture this market. Earlier this month, it unveiled a set of AI-powered marketing tools to enable digital advertisers to get better yield on their advertising campaigns across Google-owned platforms.

As a major advertising channel for brands and businesses, Google claims to have designed the AI tools to help its clients target consumers, maximise their returns on advertising spends (ROAS), while also minimising their upfront costs. 

How Google AI Is Wooing Indian Brands 

Google Search and YouTube are the two biggest buckets through which it looks to attract startups and Indian businesses to its ad network. Internal data sourced by Inc42 shows that these two platforms are involved in 87% of discovery journeys of Indian consumers for brands and products.

Around 80% of Gen Z consumers rely on Google Search for shopping and product research, while 87% of overall consumers engage with YouTube or Shorts for their shopping journey, showed Google India’s internal data.

“With people searching, streaming, scrolling, and shopping across multiple screens, purchase journeys have become increasingly non-linear and complex,” Roma Datta Chobey, managing director for the Digital First Businesses of Google India, stated in an earlier statement. “Our latest launches unlock enhanced capabilities in scaling creative capacity with AI.” 

With searches shooting past 5 Tn in annual count, Google has designed its AI-powered ad solutions like Performance Max and AI Max for brands to show up across visual formats, while making advertising campaigns more economical. 

Google claimed that the adoption of its AI tools  for generating creatives has jumped 250% in the last year.

US tech giants like Google, Meta, Apple and Amazon got a breather when the Indian government scrapped a 6% levy on digital advertisements on platforms run by foreign companies in March. 

The Greyhound CMO Pulse 2025 report estimated that 54% of CMOs across India and Southeast Asia are stepping up their digital media spends, but 63% remain unconvinced that the existing platform metrics offer a complete picture of conversion value. 

“Google’s AI integrations offer improved early-funnel visibility, faster creatives, and real-time optimisation. But their success in emerging markets hinges on enterprise maturity across measurement, first-party data, and trust in AI-led autonomy,” Sanchit Vir Gogia, CEO and chief analyst at Greyhound Research, told Inc42. 

The AI Marketing Stack 

Reliance-owned fashion marketplace Ajio leveraged Google’s native AI abilities to shrink video production cycles and minimise the cost of production. Like Zepto, Ajio used the Veo model to turn product images into dynamic videos with AI voiceovers. The campaign is said to have delivered a 1.8-fold scale in video action campaigns and 20% higher conversions.

There are other GenAI tools and products built into Google Search and YouTube marketing suites to help startups get better returns on ad spends and minimise burn. 

For instance, Cashify, an ecommerce platform for refurbished mobile phones, used a Google AI tool to get rid of keyword-dependency and focus on user intent. It saw conversions shooting up 15% and CAC declining 12%.

“Our primary objective has always been to drive profitable growth on Google. But, our efforts to scale were historically hampered by high volatility, pushing us into a constant trade-off between growth and efficiency,” Cashify’s senior vice president for marketing Ujjwal Sinha recounted.

“This transition from simply matching keywords to actively predicting customer needs led to a significant breakthrough. We achieved a 15% increase in our most valuable conversions or qualified leads where a customer schedules a pickup with full payment and device details,” the Cashify VP added. 

For food delivery major Swiggy, the challenge of optimising its ad campaigns to re-engage with inactive users was resolved and costs were brought down by almost two-thirds. “We’re looking to scale this success across new business lines,” Swiggy’s Arjun Choudhary, who heads Revenue & Growth at Instamart told us.

Google also plans to roll out Ads in AI Overview later this year. These it claims will help consumers discover newer brands that show up in AI reviews relevant to queries and the response received. Search and Shopping ads will appear directly within AI Overview when relevant to both the query and the response provided.

The YouTube masthead too has been thrown open for brands to put up their advertisements there. 

Resolving Conversion Measuring Challenges

Even as the digital real estate for advertisers grows, companies have for long grappled with the challenge of assessing conversions from advertisements to purchase or lead generation.

Google said measuring metrics is being actively considered as a predictive tool and as part of the AI stack being offered. “Meridian, our open-source Marketing Mix Model, and Google Analytics are the tools  to further help brands measure the effectiveness of their campaigns and translate the learnings to optimise them,” it said in a statement. 

The company said is also working on a metric that would help advertisers understand the performance of video ads, especially its impact on organic search behaviour for a particular brand after users had already viewed the video ads. 

Online fashion retailer Myntra wanted to diversify its user base by acquiring customers identified for their high potential value, indicated by metrics like larger cart sizes and long-term engagements. They targeted iOS users as an addressable cohort for assessing premium user behaviour by implementing on-device measurement. 

“On-device conversion measurement helped us improve the efficiency of our iOS app acquisition campaigns, helping us acquire premium users at scale efficiently, and diversify our customer base to increase the share of premium users,” according to Myntra’s Deepash Jain, who heads performance marketing, martech, consumer growth, social commerce and analytics.

Brands are also using Google Gemini for a deeper connect with users from the hinterland through regional languages,particularly to reach out to consumers who focus on non-English keywords.

As GenAI takes over, Google’s India ad play is no longer just about its digital presence. Today, it’s about AI-powered marketing for end-to-end services providers.

With tools that span creative generation, predictive customer targeting, real-time measurement, and local intelligence, Google is positioning itself as the leader for India’s next wave of digital-first brands. As AI continues to evolve, Google is betting that its scaled innovation and cultural outreach will not only help brands find customers but also tailor their products and services based on the evolving customer preferences. 

The Greyhound CMO Pulse 2025 report, however, mentioned that this shift places a premium on human-led governance. “The AI tools are only as strategic as the humans guiding them,” Sanchit Vir Gogia warned. 

[Editing By Kumar Chatterjee]