Indian quick commerce unicotn Zepto launched high-quality video ads from static images using Google’s Veo 2 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

© Inc42