AI reshapes $1-trillion advertising industry; India emerges as global adtech powerhouse: Report

As artificial intelligence reshapes the global digital economy, advertising is emerging as one of the sectors undergoing the sharpest structural transformations. A new report by Redseer said AI is no longer merely improving advertising efficiency but fundamentally rebuilding the global advertising stack across targeting, creative production, bidding, measurement, attribution, and commerce. The report identified India as a key beneficiary of this transformation.

The shift comes as the global advertising market crossed the $1 trillion mark in 2025, making it one of the largest industries powering the consumer internet economy. Digital formats now account for nearly 75–80% of global advertising spend, while 80–85% of digital advertising transactions are already programmatic, according to Redseer. 

Why is AI becoming central to the future of advertising?

For technology giants such as Alphabet, Meta, ByteDance, and Amazon, advertising remains the primary revenue engine funding everything from AI research and cloud infrastructure to hardware and consumer products. The report estimates Alphabet generated nearly $295 billion in advertising revenue in 2025, while Meta earned over $196 billion from ads. Together, Google, Meta, and ByteDance account for almost 80% of global digital advertising spending. 

“What makes this transition different is that AI is not adding another layer to advertising, it is rewriting every layer of it at the same time,” Mukesh Kumar, associate partner at Redseer Strategy Consultants, said during the firm’s media briefing.

According to Redseer, earlier transitions in advertising — from print to digital display, mobile advertising, and programmatic buying — largely added new layers to the ecosystem. AI, however, is simultaneously transforming targeting precision, creative generation, automation, attribution, and transaction systems. The report argues that advertising is increasingly moving away from traditional metrics such as impressions and clicks towards direct business outcomes such as revenue growth, customer acquisition, and lifetime value. 

How is AI creating entirely new advertising opportunities?

The consultancy also believes AI is creating entirely new advertising surfaces. Conversational AI platforms such as ChatGPT, Gemini, Claude, and Perplexity are rapidly evolving into high-engagement discovery platforms. ChatGPT itself reached 100 million monthly users within two months, making it one of the fastest-growing consumer internet products globally. 

Another emerging area is “agentic commerce”, where AI agents increasingly assist or execute purchase decisions on behalf of consumers. Redseer estimates that 10–25% of US e-commerce sales could become agent-mediated by 2030.  At the same time, AI-led app development tools are significantly reducing the cost and time required to launch digital products, creating a surge in hyper-personalised applications and fresh advertising inventory.

Can India emerge as a global AI-AdTech powerhouse?

The report positions India as a key beneficiary of this transformation. India currently has nearly 2.7 million annual engineering and technology enrolments, 20–24 million GitHub developers, and close to 1,900 global capability centres (GCCs) generating $65–75 billion in exports. 

Redseer argues that India is increasingly moving beyond outsourced technology services to become a global product and engineering hub for AI-led advertising infrastructure. Indian-origin AdTech firms such as InMobi and Affle are already operating as global product companies rather than pure service providers. 

“India is no longer just servicing global AdTech; it is increasingly building and owning the products powering the next phase of the industry,” Kumar said. 

The report also projects India’s digital advertising market to grow from around $21 billion in 2025 to $33–42 billion by 2030, creating a significant domestic growth engine for AI-driven advertising innovation.