India closes advertising technology gap with US adopting AI-native formats

New Delhi:India is picking up new advertising formats more quickly than in the past, with AI‑native formats expected to become mainstream in the country within three years, a report said on Thursday.

Programmatic advertising took roughly five to seven years to become mainstream in India after the United States and connected TV lagged by four to five years.

However, AI‑native formats should close that gap to three years as India’s large digital consumer base and adaptable ecosystem speed adoption, the report from Redseer Strategy Consultants said.

India’s digital advertising market is expected to grow from nearly $11 billion in 2025 to $19–22 billion by 2030 at 10–15 per cent annual growth, outpacing the global digital advertising market.

Digital advertising overtook traditional advertising in India in 2023 and is expected to account for 70 per cent of total ad spend by 2027.

“Mobile still anchors the market, while connected TV and retail media are drawing more advertiser interest. Quick commerce adds a distinct opportunity because the distance between seeing a product and buying it can be unusually small,” the report said.

“India is becoming a market where global advertising ideas can find commercial scale much sooner. The shift matters because advertisers are getting access to richer consumer signals, stronger commerce linkages and new surfaces at the same time,” said Mukesh Kumar, Associate Partner, Redseer Strategy Consultants.

The trend makes advertising more measurable for brands and closer to the point of purchase. It creates a stronger case for platforms to invest in first-party data, distribution and monetisation capabilities before the next format becomes mainstream, Kumar added.

The report forecasted the global advertising market to transition into a space driven by AI-native consumer experiences and new advertising formats.

Integrated platforms that combine demand-and-supply reach with owned consumer surfaces, SDK distribution and first-party (1P) surfaces will be best positioned to capture the next generation of advertising value as budgets increasingly follow high-intent consumer interactions.

Conversational AI advertising delivered more than twice the click-through rate of traditional search, while lower-funnel formats recorded over 70 per cent higher conversion, the report noted.

IANS