Google has launched a suite of AI-driven advertising tools in India, following their debut in the US earlier this year.

The rollout comes after India repealed its digital tax in April, which had increased costs for global tech firms.

New features include “Generated for You” in Product Studio, which uses AI to create images and videos for shopping catalogs.

Smart Bidding Exploration helps identify new leads and boost search campaigns.

Google also introduced AI Max for Search Campaigns, which analyzes landing pages, ads, and keyword lists to find high-performing queries.

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🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ India’s digital transformation creates unique advertising opportunity

Google’s deployment of AI tools in India aligns with tech giants investing in the country’s significant digital growth potential.

India’s internet user base of 400 million continues to grow by approximately 40 million new users annually, representing one of the fastest-growing digital markets globally 1.

The importance of this market is evident in Google’s fiscal year 2024 performance, where its gross ad revenue in India reached ₹312.21 billion ($3.6 billion) with net advertising revenue increasing by 18% 2.

Indian consumers are increasingly using digital channels for purchase decisions, with 87% of consumers watching YouTube or Shorts as part of their shopping journey and 80% of auto buyers watching YouTube videos before making purchase decisions 12.

Non-metropolitan areas are driving significant search growth across multiple categories including life insurance, vehicles, beauty, and travel, creating new advertising opportunities beyond traditional urban markets 1.

Google’s introduction of tools like “Generated for You” and “AI Max” addresses this market’s unique characteristics, including the projected growth of Indian language speakers to 75% of internet users and the 270% year-over-year increase in voice search queries 1.

2️⃣ Policy changes create immediate market impact in digital advertising

The repeal of India’s “Google tax” demonstrates how targeted policy changes can influence tech company investment decisions and market dynamics.

The 6% levy on digital advertisements, officially removed in April, had been criticized by the United States Trade Representative as “discriminatory and unreasonable” since domestic companies were exempt from the tax 2.

Following the tax repeal, Google launched its suite of AI-powered advertising tools in India, tools that had previously been limited to other markets 2.

This response illustrates how tax policy influences where and when tech giants deploy their latest innovations, particularly in the competitive digital advertising space where Google, Meta, and Amazon compete for market share.

India’s digital advertising market is projected to grow over 20% annually, reaching nearly $7 billion by 2025 according to Dentsu Digital Advertising’s report, a growth trajectory that may have been accelerated by the policy change 2.

Early results from Google’s AI tools in India appear promising, with companies like Cashify reporting a 15% increase in conversions and 12% reduction in customer acquisition costs during testing periods 2.

3️⃣ AI represents a fundamental shift in advertising effectiveness metrics

Google’s AI advertising tools highlight how artificial intelligence is transforming marketing from creative messaging to predictive analytics and automated optimization.

The global AI marketing market is projected to reach $47.32 billion by 2025, with adoption rates already reaching 88% among marketers, indicating this is no longer an emerging technology but the new standard 34.

Tools like Smart Bidding Exploration and AI Max for Search Campaigns represent a shift in approach, using artificial intelligence to identify opportunities that human marketers would likely miss, such as qualified leads that wouldn’t have been captured or bid on typically 2.

These AI systems operate by continuously learning from multiple data sources simultaneously, including landing pages, existing ads, keyword lists, and real-time campaign performance, creating optimization capabilities that exceed what manual management could achieve 2.

Early performance data showing Cashify’s 15% conversion increase and 12% cost reduction demonstrates that AI-driven advertising can deliver measurable performance improvements rather than just operational efficiencies 2.

The introduction of these AI capabilities across Google’s advertising ecosystem indicates that campaign performance will increasingly depend on algorithmic advantage rather than just creative execution or media buying power.

Recent Google developments

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