Indian agencies dread layoffs as AI reshapes global ad industry

Artificial intelligence (AI) is causing an upheaval in the global advertising industry, and the ripples of layoffs and cost cuts are being felt in India as well.

- Soumya Gupta & Devina Sengupta

Clients now bet on digital ads even more.

(ISTOCKPHOTO)

AI tools now enable clients to develop content, and they are outsourcing less and less work to advertising agencies. The industry is in turmoil, forcing two of the Big 5 advertising holding companies-Omnicom and Interpublic Group-to merge globally. That has triggered a wave of job cuts, and local agencies are also bracing for a shake up.

“The Indian advertising market is going through a seismic shift. The creative work is now getting done by clients’ in-house teams. AI tools are used for creating advertisements across platforms as campaigns become hyper-person-alized,” said Rajesh Sethi, partner and leader Media, Entertainment and Sports, PwC India. “By leveraging AI, organisations are becoming more productive and efficient. However, this transformation may influence entry-level roles in the industry and gradually reshape the traditional business models of advertising agencies.”

Digital advertising was already on the rise. Clients are now betting on it even more, given a large youth population, expanding broadband access, and deeper consumption of online content. A PwC report estimates Indian internet advertising to expand from ₹6.25 billion in 2024 to ₹13.06 billion in 2029.

Late last month, NYSE-listed Omnicom and Interpublic Group announced a $13 billion merger. With global revenues exceeding $25 billion, the combined post-merger Omnicom will become the world’s largest advertising network.

In India, London-based WPP remains the largest, comprising media agencies such as Ogilvy, Burson and GroupM, which was rebranded as WPP in May.