Google AI Marketing Tools Launch in India After Tax Repeal

Google Expands AI Advertising Tools to India Following Tax Repeal

Google has initiated the rollout of its artificial intelligence-driven advertising solutions in India. These tools were initially launched in the United States in May. This expansion is largely attributed to the recent removal of the “Google tax,” which has increased the attractiveness of the Indian market for international technology companies engaged in online advertising.

The Removal of the Digital Advertising Levy

In March, the Indian government eliminated its 6% tax on digital advertisements, with the change taking effect in April. This decision was made to address trade concerns previously voiced by the Trump administration.

The United States Trade Representative had previously labeled the levy as “discriminatory and unreasonable,” highlighting that domestic businesses were exempt from the tax. Its cancellation is expected to reduce expenses for major technology companies like Google, Meta, and Amazon.

Debut of AI-Powered Tools at Marketing Live

Google showcased its AI-enhanced tools for Indian marketers during a local iteration of its Marketing Live event held on Thursday.

Key Features and Capabilities

One notable tool is “Generated for You,” integrated within Product Studio. It identifies potential content opportunities within shopping catalogs and automatically generates images and videos using AI. Merchants can then save or publish these assets across Google’s platforms.

Another feature is Smart Bidding Exploration, an optional addition to search campaigns. Built upon existing Smart Bidding functionalities, it leverages AI to discover new, qualified leads that marketers might not typically identify or bid on.

Furthermore, Google has introduced new agentic capabilities within both Google Ads and Analytics.

Agentic Tools and AI Max

According to Dan Taylor, Vice President for Global Ads at Google, these agentic tools are designed to learn from advertising data, including datasets, landing pages, creative assets, and real-time campaign performance. This learning process aims to minimize uncertainty in achieving business objectives.

Google also launched AI Max for Search Campaigns, which seeks to improve the performance of search ad campaigns. It does this by identifying more pertinent and effective search queries through analysis of brand landing pages, existing advertisements, and keyword lists.

Early testing of AI Max by Cashify, an Indian online marketplace for used electronics, resulted in a 15% increase in conversions and a 12% reduction in customer acquisition costs, as reported by Google.

Expanding AI Integration

Google announced that advertisements will soon be integrated into AI Overviews within India, starting later this year.

In addition, the company has introduced shoppable connected TV advertisements on YouTube in India. The YouTube masthead on mobile devices will also now display advertisements within the country.

YouTube's Growing Presence in India

Roma Datta Chobey, Managing Director of Digital Native Industries at Google India, stated that YouTube on connected TVs has been the leading streaming service on television in India for the past year.

YouTube Shorts has also gained significant traction in India, with short-form videos on the platform being viewed trillions of times since its launch. A substantial 87% of Indian consumers incorporate YouTube or Shorts into their shopping process, according to Chobey.

India's Expanding Digital Advertising Market

India’s digital advertising sector is experiencing growth, driven by the increasing number of internet users in the world’s second-largest internet market. A recent report by Dentsu Digital Advertising projects that the country’s digital ad market will grow by over 20% year-over-year, reaching approximately $7 billion by the end of 2025.

Chobey explained that India’s vibrant digital ecosystem and large user base actively testing Google’s products are key factors in the accelerated rollout of these innovations.

Local Language Support and Audience Targeting

Google confirmed to TechCrunch that the newly launched features – including AI Max for Search Campaigns, Smart Bidding Exploration, YouTube’s shoppable masthead and CTV, and Performance Max Retention-Only Mode – now support Hindi, enhancing compatibility with local campaigns.

The company has also introduced state-level urban and rural audience filters for Indian advertisers, enabling more precise media planning, purchasing, and reporting.

Google's Financial Performance in India

India remains a crucial market for Google, both due to its extensive user base and consistent growth in advertising revenue. In fiscal year 2024, Google’s gross ad revenue in India increased by 11% year-over-year to ₹312.21 billion ($3.6 billion). Net advertising revenue saw an 18% increase, reaching ₹27.43 billion ($320 million).