AI to push advertising volumes up to 18% in the next three to five years

With the advertising industry rapidly adopting technology, and about 42 per cent of advertisers already using artificial intelligence (AI) for campaigns, AI is set to increase advertising volumes up to 18 per cent in the next three to five years, driven by lower costs, better reach, and return on investment (ROI).

 

Media buying executives said that the digital segment is expected to have the highest uplift in advertising volumes, followed by connected TV and streaming platforms. Apart from better reach, Ai will also increase the variation and testing frequency of advertisements and enable small- and mid-size brands to advertise more often. The company estimates algorithmically enabled (for data, AI, or programmatic-driven) advertising spend will rise from about 59.5 per cent of the total ad spend in 2025 to a share of 79 per cent by 2027, Abhinay Bhasin, senior vice president, product and technology, Dentsu India said. Additionally, he noted that using some of its proprietary technology, it has seen average cost reductions across markets in the range of 15 to 20 per cent (on cost per result), with some cases seeing reductions of nearly 50 per cent on lower- and mid-funnel objectives.

 

“Linear TV will see moderate uplift driven by AI-assisted planning (for automated spot selection, reach curves, genre optimisation), but growth will be smaller because the inventory is finite and less dynamically bought,” said Bhasin.

 

AI is rapidly transforming the media ecosystem, with the capability to automate being a significant part of the planning and buying workflow, said Rohan Chincholi, chief digital officer, Havas Media India, corroborating with Bhasin. Havas Media India anticipates AI to drive ad volumes up by 12 to 18 per cent over the next three to five years, powered by improved reach, precision and ROI.

 

“In our own work, we are seeing 20 to 30 per cent gains in campaign efficiency through AI-driven optimisation, depending on the category and maturity of data. Performance media, retail media networks and live TV optimisation will scale faster than traditional formats, though AI will gradually modernise traditional media as well. Overall, we are entering a phase where AI does not just optimise media, it fundamentally redefines how campaigns are planned, delivered and measured, placing data intelligence and automation at the core of future media growth,” Chincholi added. 

 

Media buying executives highlighted that banking, financial services and insurance (BFSI) almost leads with the highest AI-adoption rates among other sectors through rapid growth in digital media. Other categories, like automobile and direct-to-consumer (D2C), are also adopting AI at a faster pace due to their performance-led, data-rich environments. Bhasin added that fast-moving consumer goods (FMCG) and D2C brands are leveraging AI to optimise vast audiences, creative variations, and high-frequency campaigns.

 

Currently, entertainment and streaming, healthcare, e-commerce, banking are contributing to advertising volumes through AI, Anshu Yardi, vice president, business partnerships and communication, TAM Media Research noted. He added that about 40 to 70 per cent of media planning and buying can be done through AI tools in the next five years, however, this would depend upon regulations in the industry as well.

 

Mirroring global trends of adopting AI in media buying and planning aspects, Dentsu India has Dentsu Marketing Cloud, which uses AI to decode content signals, map consumer behaviour, and translate them into actionable, channel-agnostic media plans, and an Automated TV Planner for AI-driven linear TV plans by analysing genre, slot, affinity, and reach curves at scale. On the other hand, Havas Media India’s Converged.AI platform integrates owned, subscribed and syndicated data for sharper decisions and higher media efficiency.

 

This comes at a time when media-buying firms have already begun making significant investments in building AI capabilities across industry verticals. Shilpa Malaiya Singhai, managing director, business transformation services, Alvarez & Marsal India, said that around 15 to 18 per cent of media-buying firms’ budget allocation is now shifting toward automation and AI across trafficking, reporting, performance optimisation, and asset versioning. Within the digital segment, she anticipates an incremental six to 12 per cent uplift in digital ad volumes over the next 32 to 36 months.

 

“The next three to five years will mark a decisive shift in India’s digital advertising landscape, as we move from digital-led to truly AI-native advertising, with 40 to 50 per cent of the ad workflow, including creative, targeting, optimisation, and measurement, set to be AI-enabled. Amid reducing attention spans and increasing ad inventory availability, this is where AI can significantly drive automation,” Singhai added.