AI-native advertising surges in India as report flags huge knowledge gap among consumers
New study shows Indian users still learning basic ad concepts even as brands push ahead with hyper-personalisation, vernacular AI and $70-billion social commerce growth.
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India’s digital advertising ecosystem is undergoing a dramatic transformation, with a new industry study showing that the country is rapidly emerging as a global testbed for AI-driven, hyper-personalised marketing, even as most consumers remain in the early stages of understanding basic advertising concepts.
According to the report by LS Digital, Indian consumers are still primarily searching for foundational definitions of native advertising, with 99% of search queries centred on basic concepts rather than advanced programmatic or AI technologies. This signals a significant knowledge gap, even as the industry accelerates toward sophisticated automation, vernacular AI and behavioural targeting.
Despite this gap, India is showing some of the strongest consumer openness to AI in the world. The study finds that 48% of Indian users trust AI-generated content, and 82% are willing to accept AI-driven recommendations, far higher than global averages. This makes the country an attractive market for brands experimenting with AI-native advertising tools, dynamic creative optimisation and cross-platform personalisation.
The report identifies hyper-personalisation, human–AI collaboration, vernacular AI and platform-led democratisation as the key themes driving the shift. Hyper-personalisation alone accounts for nearly half the industry discourse, driven by India’s unique receptivity to AI-tailored content. Meanwhile, vernacular content strategies are delivering 30–40% higher engagement, as brands increasingly tailor campaigns to regional languages and dialects.
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AI adoption is also pushing advertising deeper into Tier-2 and Tier-3 cities. Self-serve platforms are enabling small and medium businesses to access advanced targeting capabilities once limited to major advertisers. The report notes that social commerce in these markets is on track to hit $70 billion by 2030, powered largely by vernacular AI and voice-led technologies.
Marketers, however, remain cautious about fully replacing human creativity. Nearly 73% see AI as a tool for augmentation rather than automation, with many emphasising the need for human oversight to preserve cultural nuance and ethical judgment.
The report highlights emerging challenges, including rising privacy concerns under India’s Digital Personal Data Protection Act, the shift away from reliance on global “walled garden” platforms, and the rapid evolution of micro-moment marketing that targets consumers based on culturally specific, time-sensitive triggers. Voice assistants are also expected to play a major role in bridging digital divides, especially in rural regions and among first-time internet users.
The study concludes that India is not simply adopting global AI advertising trends but crafting a model of its own, one built around vernacular scale, hybrid human-AI creativity, and the democratisation of advanced marketing tools. Brands that balance innovation with consumer education, the report says, will be best positioned to lead the next phase of India’s digital advertising boom.
