close_game
close_game

AI, consolidation to impact ad business in 2025

ByShuchi Bansal
Jan 31, 2025 07:46 AM IST

Adman Sandeep Goyal predicts AI will transform advertising by 2025, emphasizing the need for agencies to adapt or risk failure amid evolving market trends.

Adman Sandeep Goyal, chairman, Rediffusion, is not known to mince words about the state of the advertising and media industry and often receives flak for his honest take on the issues plaguing the sector. The former founder-chairman of the Dentsu India JV is spot on about trends on the creative and media side of the business. For 2025 he predicts that AI (artificial intelligence) will be a game changer in advertising, money will continue to go into performance marketing, and agency mergers will lead to blood-letting as they are a euphemism for cost savings for the networks.

AI, consolidation to impact ad business in 2025
AI, consolidation to impact ad business in 2025

“AI is a reality and it is at our doorstep. Ad agencies will have to either learn how to use AI or it will trample their businesses,” Goyal said. This requires serious investments in re-training the creative cadres, acquiring new machines and software. “Typically, agencies wait for business to happen before they invest which will be a big mistake,” Goyal said. AI can bring the sheen back to the creative business as it offers greater control over output, improves productivity and saves time and money, he added.

Advertising money will keep pouring into performance marketing over brand building, which is unfortunate since it goes against the basic tenets of building Awareness-Interest-Desire-Action (AIDA), he added. “The new generation of brand builders seem to be focusing only on ‘Action’ without creating desirability for the brand. While it may be good to put money in performance, quality customers will flock to the brand if investments are made in building brand preference.”

For Lalatendu Das, CEO, Publicis Media (South Asia), a hybrid mode of content consumption will rule 2025 where viewers will seamlessly switch between digital platforms, CTV/OTT, and broadcast TV. “The average Indian consumer is adding screens not only for social connectivity but also for content consumption and e-commerce. This shift is prompting advertisers to tap into both digital and retail media to effectively reach their audiences,” he said.

Advertising will ride on the back of growth in quick commerce which gained prominence in 2024. As these platforms expand their geographical reach and diversify product categories, they are becoming increasingly relevant to advertisers who leverage them to enhance brand visibility, drive promotions, and encourage product trials, Das said.

Quick commerce platforms will also challenge established tech companies like Google and Meta for a share of ad money. Quick commerce provides access to invaluable consumer insights such as purchase preferences, basket composition and payment behaviours, Das said. Streaming services are also attracting advertising with consumers spending more time on digital entertainment.

Das places his bets on CTV advertising with increasing penetration of internet-enabled smart TVs or connected TVs (CTVs). “Device manufacturers are expected to integrate advanced features like touch or motion-based interactions, enabling viewers to engage directly with content. Interactive content, where viewers can seamlessly explore products or services while watching TV, is bridging the gap between entertainment and engagement,” Das said.

Goyal, meanwhile, also sees a continued traction for live experiences with Indians thronging such events in huge numbers. In India, live events increased from 19,000 in 2022 to 30,000 in 2024, according to BookMyShow’s year-end data. “Music festivals and concerts, such as NH7 Weekender, Lollapalooza, and international artiste tours by Dua Lipa and Coldplay, have become major attractions. Coldplay’s recent tour is reported to have generated a total billing of approximately 12-14 crore,” Das said. Advertisers are eagerly investing in this thriving sector, with major festivals hosting about 8 marquee sponsors and 3-4 long-tail sponsors, reflecting the high demand for brand visibility, he added.

But the ad industry has challenges regardless. A key concern is the lack of unified measurement standard in digital advertising which creates inconsistencies in assessing campaign performance and undermines transparency, Das said. Besides, there’s no strong industry body to protect intellectual property, enforce ethical standards, and champion best practices, he added.

Media mergers are a matter of concern too. “The concentration of power can reduce competition, limit the diversity of media options, and restrict brands’ flexibility in choosing the best channels to meet their objectives,” Das said. The Reliance-Disney merger, for instance, gives the network enormous buying power over both advertising and content, especially cricket, added Goyal.

However, going forward, the biggest challenge for advertising is audience and attention fragmentation. “It will become more and more difficult for brands to build recognition and recall,” Goyal said.

rec-icon Recommended Topics
Share this article
Catch every big hit, every wicket with Crickit, a one stop destination for Live Scores, Match Stats, Infographics & much more. Explore now!

Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.
See More
Catch every big hit, every wicket with Crickit, a one stop destination for Live Scores, Match Stats, Infographics & much more. Explore now!

Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.
SHARE THIS ARTICLE ON
SHARE
Story Saved
Live Score
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, February 14, 2025
Start 14 Days Free Trial Subscribe Now
Follow Us On