AI is transforming Indian advertising. Fir Bhi, can it say ‘Daag Achhe Hain?’

Remember Terminator 2: Judgment Day? In the 1991 film, there’s something deeply potent about a dialogue exchange between John Connor and the character played by Arnold Schwarzenegger:

“Now don't take this the wrong way, but you're a Terminator, right?”

“Yes. Cyberdyne Systems, Model 101. My CPU is a neural-net processor; a learning computer. The more contact I have with humans, the more I learn.

The premise - that more contact with humans leads to greater learning - can now be perceived as a forerunner to the creative role of Artificial Intelligence, in observing and mimicking human behaviour. Yet, in that day and age, technology had its limitations, as evidenced in the climax when the Terminator says, “I know now why you cry, but it's something I can never do.”

Fast forward 35 years, and we know AI-created characters can easily extend a warm welcome or bid a tearful farewell, not just in filmmaking, but in advertising, marketing and mass communications.

India is where the US bets on scale

In the United States, where most of these tools are built and tested first, AI already writes the copy, cuts the video, voices the advertisement, recommends products, and answers customer calls. It is starting to play Influencer as well. McKinsey’s 2025 State of AI report found that 88 percent of companies now use AI in at least one business function, up from 78 percent a year earlier, with marketing and sales among the most common uses. Yet only about one company in 20 reports real financial returns at scale, so most of the industry is still paying for promise rather than proof.

What America builds spreads to other countries quickly. The same algorithms remaking advertising in New York and San Francisco are already playing out in Mumbai, Bengaluru, Delhi and Chennai, only faster, at greater scale, and with far more at stake for the thousands of creators, agencies and businesses that live off the work.

India’s advertising market closed 2025 at about ₹1.21 lakh crore, and digital, which grew 19 percent to roughly ₹71,600 crore, now takes 59 percent of every advertising rupee, on course for 70 percent by 2027, as television shrinks. The question today is not whether Indian brands will adopt AI (they already have), but whether they can do so without losing customer trust.

The scale of the shift is hard to overstate. McKinsey has put the annual value for generative AI at between $2.6 trillion and $4.4 trillion, and venture money keeps flowing into it at well over $100 billion a year, a pace that holds, even as investors turn cautious about almost everything else.

Advertising is where ordinary consumers see the consequences first. Work that once needed photographers, editors, actors and copywriters, and weeks of production, now takes hours. A festival campaign that used to lock or engage a studio for a month can be storyboarded, shot virtually and cut into a dozen regional edits in a single afternoon. The holding companies have moved fast, from Publicis investing millions into Marcel, a custom-made AI platform, to Omnicom’s takeover of Interpublic, the largest agency merger in history, which made the logic plain: data, automation, and technology will decide who wins.

Google Becomes the Operating System

None of this is a distant Silicon Valley story for Indian business. Google’s advertising arm earned close to $295 billion in 2025, the year Alphabet crossed $400 billion in revenue for the first time, which makes it the most powerful marketing platform on earth. For tens of thousands of Indian firms, Google Search, YouTube and Google Ads are the front door to every customer they have. 

CVL Srinivas, Country Manager of WPP India until earlier this year, has voiced the industry’s anxiety plainly. During an interview on the International Advertising Association (IAA) India Chapter Voice of Change series in 2025, he said: “You won't lose your job to AI, but you'll definitely lose your job to someone who understands how to use AI.” India needs to read the fine print.

On the Western Front, under Sundar Pichai, Google is attempting one of the boldest reinventions in its history. At Google Marketing Live in May 2026, the company made a single point under seven different banners: its Gemini AI is now the operating system of Google Ads. The headline launches put advertising directly inside AI-generated answers, through formats like Ads in AI Mode and Direct Offers. This means a brand’s pitch now surfaces in the middle of a consumer’s conversation rather than beside a list of links.

The old model asked marketers to choose the audience, pick the channels, test the creative and optimize in manual mode. The new one turns it upside down: you name the goal and the algorithm decides how to reach it. Performance Max, now a large slice of Google Ads spending, runs almost entirely on automated signals.

For India’s big advertisers, that efficiency is seductive. For everyone else, it should be unsettling. Google handles close to 90 percent of the world’s searches and an even larger share in India, and for most brands there is no real alternative. AI decides which ads people see. The question is how much marketers will still understand about those decisions, when a brand’s edge now lives inside a system even its makers cannot fully explain?

The irony is hard to miss. In 2024, a US federal judge ruled that Google had monopolized search. A year later, another court found the company had tied its publisher ad server and ad exchange to cement its dominance in digital advertising. As the United States tests the limits of Google's market power through antitrust action, India has yet to mount a comparable challenge in digital advertising, despite being one of the world's fastest-growing AI and advertising markets.

The Synthetic Influencer Goes Mainstream

The most visible sign of all this is synthetic media. Readers of Vogue magazine have already met models who do not exist, the lighting perfect, the styling flawless, the human entirely absent. Virtual influencers have graduated from novelty to business line. Aitana Lopez, an AI-generated influencer out of Barcelona, reportedly earns thousands of euros a month from brand deals, and Lil Miquela has worked with Calvin Klein, Samsung and Prada while gathering around three million followers.

Mirage, the New York company formerly known as Captions and led by Gaurav Misra, has raised more than $175 million and now enables brands to conjure lifelike AI actors through its Mirage Studio platform, with which more than 200 million videos have been made. Misra, who grew up in India, traces one of the platform’s signature touches — preserving a speaker’s native accent instead of flattening it into American English — to his own father, whose Indian accent the early tools kept erasing.

For India’s creator economy, this is all becoming real. Boston Consulting Group counted between two and 2.5 million monetized creators in 2025, together shaping more than $350 billion in consumer spending, a figure it expects to cross $1 trillion by 2030. YouTube’s Indian audience of more than 450 million is its largest anywhere in the world. The top creators will likely survive, but the working mid-tier, the talented many who earn real but modest livings, will feel the squeeze. A synthetic spokesperson never ages, never renegotiates, never misses a deadline and never posts anything that blows a brand overnight.

Will audiences mind this shift? The early evidence suggests the answer depends on disclosure, context and relationship. The late Piyush Pandey, chief creative officer of Ogilvy, who gave Indian advertising much of its soul, had said, “No campaign is worth its salt unless the people on the street love it.” It is a reminder that a synthetic influencer can perform flawlessly every time, but performance and trust are not the same thing, and audiences are far better at detecting inauthenticity than algorithms give them credit for.

The Trust Gap

The problem in AI-led advertising is psychological, and the gap it has opened is widening. The Interactive Advertising Bureau reported that advertisers keep growing more comfortable with AI-made ads while consumers, especially Gen Z, grow more wary. 

A study by Yahoo and Publicis Media, Trust Through Transparency: The Future of AI and Advertising, put numbers on the divide: around 77 percent of advertisers view AI in advertising positively, against only 38 percent of consumers. That distance measures how far the industry’s confidence has run ahead of the public’s comfort.

Seth Godin, whose ideas shaped a generation of brand thinking, has long argued that attention can be bought and measured, but trust cannot. Speaking in June 2026 at a Nonprofit New York gathering in Battery Park, where he previewed his forthcoming book The Knot, on what keeps capable people stuck, he returned to a story from rural India: helping VisionSpring, a social enterprise, sell reading glasses where a chart proved they worked instantly, yet most buyers still walked away. 

Sales jumped only when sellers handed people a working pair and asked them to pay or hand it back. The lesson was about reading human behavior, not price — precisely what algorithms struggle to do.

That instinct, trusting a human read over a system, lands with particular force in India. Nielsen has found for years that the most trusted form of advertising anywhere is a recommendation from someone you know, and that instinct runs especially deep here, where a word from family or community still outweighs any campaign. When content feels synthetic, the trust penalty may be steeper than in markets where people keep brands at arm’s length. 

The same research points to a way to deal with it. When brands admit that an ad was made with AI, trust tends to rise rather than fall. A study found that a noticed or declared disclosure lifted an ad’s trustworthiness by 73 percent and overall trust in the company by 96 percent. The Interactive Advertising Bureau now ranks clear disclosure among the strongest drivers of attention. Honesty, it turns out, is becoming a performance tactic, not just an ethical one. 

Now that we have taken you through the entry and impact of AI in advertising, what remains is the human element, a magic no algorithm can create. Think of the legends who once walked the floors of India's most creative agencies, whom no agentic AI tool can bring back or replace. 

Or the flash that comes to a copywriter on an overcrowded local train or bus. Like the iconic Fevicol line, "Fevicol ka mazboot jod hai, tootega nahi," with its memorable visual - a rustic, overloaded bus, dozens of passengers hanging off the back and the roof, all of them effortless and perfectly still, because a Fevicol sign is painted on the rear. An exaggeration, yes. AI will take time to reach this level.

Which brings us to what we have been saying from the start. Execution with AI: Check. Cost-cutting: Check. Speed: Check. Brilliance, customization and personalization, not yet there, but a wish list algorithms are working on. We will delve deeper into this in Part 2, to be published later in the week.

(Renuka Naj, a New York-based writer with research, writing, and editing roles across US media, has served as a staff journalist at The Wall Street Journal.  She advises brands on deploying artificial intelligence in marketing and media. R. Chandra Mouli, former advertising professional based in Mumbai, serves as advisor to ad tech and martech enterprises. Views expressed are their own.)