For the last few months, Swiggy, India’s hyperlocal food delivery platform, had been involved in the beta testing of Google’s advertising-focused AI solutions to boost its reach to audiences. One of these solutions was an improved version of Performance Max, which allows e-commerce users to re-engage with existing customers who are inactive.
“We’ve seen Performance Max help new user growth, creating an additional impact within the range of 15 per cent to 25 per cent. The bigger part is bringing down our costs. For different hyperlocals, we’ve seen the costs vary anywhere between 25 per cent and 40 per cent,” said Arjun Choudhary, Vice President of Revenue and Growth at Swiggy, during the launch event of Google’s new tools in July.
Incidentally, Swiggy reported an improvement in EBIT margins and attributed this to momentum in food delivery and the expansion of its quick commerce vertical last month.
At the Google event, not only did the tech major launch several tools such as AI Max Research Campaigns and Demand Chat but it also said it would soon roll out agentic AI capabilities across Google Ads and Google Analytics globally. With these AI assistants, advertisers could set up campaigns that drive higher performance, from onboarding and campaign creation to reporting and troubleshooting.
It’s not just Google. Meta has been rolling out solutions to automate ad creation as well as buy and deploy ads. Traditional advertising agencies that play a huge role in the $963 billion ad market have a reason to be nervous. The new AI solutions being rolled out by the tech majors are so disruptive they could well kill the agency model.
Industry observers are already commenting on how big a change is happening. Take BoFA Securities, the corporate and investment banking division of Bank of America, which noted that Meta’s AI assistant is an “underappreciated opportunity” with the potential to become a central interface for content discovery, commerce, and productivity.
Sanchit Vir Gogia, CEO and Chief Analyst at Greyhound Research, said Meta’s end-to-end advertising vision marks a “structural rupture” in how advertising is executed.
“This shift erodes the agency’s historical domain of media planning and creative scale. However, this is a forced reinvention moment for agencies. The long-term value of creative strategy, brand stewardship, and ethical guardrails remains beyond the reach of today’s AI,” said Gogia, advising agencies to deliver value where AI falls short. These areas include cultural intelligence, creative originality, and campaign governance.
What’s changing
With big tech doubling down on the advertising market, analysts have been debating the future of the creative and marketing agencies.
According to Jay Pattisall, VP, Principal Analyst, Forrester, agencies will bifurcate into enterprise and SMB (small and medium-sized business) providers. Large agency networks have built AI technologies that are comparable to Meta and Google’s tools in some respects and superior in others, he said, giving the example of agency tools that are better at brand governance and cross-platform optimisation. “SMB providers will be more focused on executing for clients using Meta, Google and Amazon’s tools. Since big ad tech’s AI tools will likely produce creatives that lack differentiation, SMB agencies will be charged with building the brand into the campaigns that run on social platforms and through their DSPs (demand-side platforms),” said Pattisall.
Similarly, Manish Solanki, COO and Co-founder, TheSmallBigIdea, said the world is moving in a direction where media buying becomes faster and more automated. This means that resources handling performance marketing might evolve into a more analytical role where the real win will be in creativity and cultural relevance.
“We have to ensure that we move up the value chain — we double down on what AI or platforms can’t do, strong brand thinking and smart creatives. Be the advisor, don’t just execute. Be the brand’s unbiased partner, help them pick the right mix, not just one platform. Work with AI, not against it. If you know how to tell a story, you will stay relevant,” said Solanki, pointing out that AI learns from what’s available in the market while an agency will always be relevant when it comes to originality.
Solanki also estimated that running ads will get cheaper, but breaking through the noise will be tougher. Regional content will grow finally, and there will be scale for Indian languages; but data privacy will be a big issue. Most people here aren’t ready for what’s coming, he opines.
The human touch
Kartik Mehta, Head of Asia and CBO at Channel Factory ad-tech platform, said the maximisation of ad exposure is still in the hands of humans. “It’s just going to enhance and expedite the time that it takes for campaigns to launch or campaigns to be optimised or produce the results that they need on these larger platforms. I would say [AI integration] would be a catalyst to expedite certain areas of work,” said Mehta.
In fact, even Dan Taylor, Vice President, Global Ads, Google, said that advertising agencies will continue to have a huge role to play, despite the advent of AI, due to their understanding of clients. He said agencies will also play a significant part in the data that points AI in the right direction towards achieving a marketer’s outcome.
“AI can generate options based on patterns, but the ‘why’ behind a campaign, the core strategic insight, the emotional resonance that truly connects with an audience, the ethical considerations, the final curatorial judgment, that remains fundamentally human,” said Taylor.
So, for the moment at least, ad agencies are not dying. But they do need to re-invent fast.
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Published on July 11, 2025