India’s festive season is just getting underway. Janmashtami and Ganesh Chaturthi fall this month, with Navratri, Dussehra and Diwali following through October and into November, a period that typically accounts for a large share of the country’s annual retail and advertising activity. Diwali alone is estimated to drive 60-65% of India’s annual gifting sales, and last year’s season saw trade cross Rs 6.05 lakh crore, up 25% over 2024, according to data compiled by the Confederation of All India Traders (CAIT).
And advertisers are already gearing up for it as an Amazon Ads survey found that 61% of consumers expect to spend more this Diwali compared with last year. Against that backdrop, we spoke to Kapil Sharma, Director – Amazon Ads India, about how brands, especially SMBs, are approaching this festive season and where AI fits into that planning.
That rise in intent to spend matters most for small and medium businesses (SMBs), which have traditionally had to compete with larger, legacy advertisers during the festive rush. A recent Amazon Ads study of 300 SMBs in India, part of a wider 4,100-respondent survey across 14 countries conducted by Opinium, found that 87% now say AI-powered advertising tools have helped them access channels, audiences or formats that previously felt out of reach, including high-impact formats such as streaming TV.
Three years ago, only 56% of SMBs considered streaming TV a viable channel at all, held back chiefly by cost, high minimum spend requirements and the complexity of planning and buying a campaign. Sharma pointed to AI-based creative tools cutting the time to produce a video ad campaign from eight to ten hours down to around 30 minutes, citing the example of Party Propz, whose AI-generated video creatives delivered a click-through rate 35% higher than the benchmark.
When asked how the festive season would play out for SMBs this year, Sharma said, “We are seeing a lot of excitement among SMBs around the festive season. From our discussions at the roundtable and AdSight, there is a strong interest in understanding and adopting advertising solutions that can help them reach more consumers.” He expects full-funnel marketing to be a bigger theme this year, pointing to the same study’s finding that 91% of Diwali shoppers expect to engage with Amazon across formats spanning shopping, video and voice, rather than treating any single platform purely as a place to transact.
On where AI can move the needle most for SMBs during the festive period, Sharma named two areas. “First is creative development. SMBs can create multiple ad copies with minimal effort, test them quickly and identify what works best before scaling their campaigns,” he said, adding that “the second is campaign setup and optimisation across the funnel. AI enables SMBs to combine brand and performance marketing and use data to continuously optimise their campaigns against their objectives.”
In the rest of the conversation, Sharma also spoke about why, even as AI use has grown, human review still decides nearly every ad that goes out, with the study recording that only 2% of SMBs let AI make advertising decisions without any human check.
Edited Excerpts:
The study finds that 87% of SMBs say AI has opened up advertising opportunities that previously felt out of reach. What has changed in the advertising landscape to make this possible?
As you rightly pointed out, many SMBs are now using AI-based tools to explore advertising solutions that may have been out of reach in the past. For example, with our creative tools, advertisers can create a video ad campaign in around 30 minutes, compared with the eight to 10 hours it could traditionally take.
Take Party Propz, for example. The brand used our video generator to create video creatives in just 30 minutes. Beyond saving time, effort and cost, the campaign also delivered strong consumer engagement, with a click-through rate 35% higher than the benchmark.
If you take a step back, video advertising and streaming TV were traditionally largely the domain of bigger brands because they required significant budgets and involved multiple steps, from finding a media agency and developing the concept to storyboarding, shooting and editing.
AI is changing that. Today, SMBs can create multiple creatives in a much shorter time, test different ideas and quickly understand what works and what needs to be improved. That is the power of these tools. They are making a wider range of advertising opportunities more accessible to smaller businesses.
The study finds that 68% of SMBs feel AI has made them more creative. We understand that tools like Creative Agent can reduce the time and cost of production, but how is AI actually changing the kind of advertising SMBs create? Could you share some examples?
From what we have seen, advertisers are still keeping human creativity and brand identity at the core of their work. AI can help transform a static asset into a video, for example, but the brand still needs to decide how to bring its personality, values and product proposition into that creative.
That human intervention is important because SMBs want to retain what makes their brand distinctive. AI can make the creative process faster and give them more possibilities to explore, but human judgement is still needed to ensure the final output feels authentic to the brand and connects with its consumers.
So, it is not just about using AI to produce more content. It is about using these tools to explore more creative possibilities while keeping the brand at the centre.
AI adoption among Amazon advertisers in India has grown 77% year on year. What are SMBs now doing with AI that they weren’t doing a year ago?
One of the biggest shifts is the growing openness among SMBs to experiment with AI. Our study found that 87% are open to using AI-based tools to try different video effects and creative possibilities, showing a significant increase in willingness to explore these tools compared with previous years.
At the same time, they have more support to help them use AI effectively. Through Amazon Ads, we conduct webinars, workshops and AdSight sessions, along with short videos that show advertisers how to use these tools to achieve their business objectives.
So, it is a combination of greater openness and better education. SMBs are no longer just experimenting with AI to see what happens. They are becoming more confident about using these tools as part of their advertising strategy.
Which categories are seeing the strongest impact from AI-enabled advertising, and where are you seeing that impact most clearly? Is it customer acquisition, awareness or something else?
We are seeing advertisers use AI across different categories and at different stages of the consumer journey. The impact really depends on the objective they are trying to achieve.
For example, our Performance Plus solution uses AI to help brands optimise their campaigns based on their goals, whether that is driving awareness, discovery or purchase.
Take Dogsee, a natural pet care brand in the US. The brand used our AI-based tools to expand its business and saw a 67% uplift in ROAS, along with almost twice the month-on-month sales after adopting the solution.
So, the impact is not limited to one particular stage of the funnel. Whether a brand wants to drive discovery, engage consumers or convert them into customers, AI can help optimise different parts of that journey depending on the strategy and objective.
With all these AI and advertising tools now available to SMBs, how do you see the festive season playing out for them this year?
We are seeing a lot of excitement among SMBs around the festive season. From our discussions at the roundtable and AdSight, there is a strong interest in understanding and adopting advertising solutions that can help them reach more consumers.
One of the solutions we recently launched is the Amazon Ads Creator Program, which gives brands access to more than 5 lakh creators across the country, along with measurement capabilities to evaluate campaign performance.
We also expect SMBs to make greater use of AI-based solutions, including image and video generation and Creative Agent, to create compelling display and video ads that communicate what their brands stand for and how their products meet consumer needs.
Broadly, full-funnel marketing will be a key focus for SMBs this festive season. They are becoming more aware of the tools available to them and are increasingly looking to use multiple advertising solutions to engage consumers across the entire purchase journey.
Festive campaigns often require brands to move quickly across multiple campaigns and audiences. Where can AI make the biggest difference for SMBs during this period?
I see two key areas where AI can make a difference. First is creative development. SMBs can create multiple ad copies with minimal effort, test them quickly and identify what works best before scaling their campaigns.
The second is campaign setup and optimisation across the funnel. AI enables SMBs to combine brand and performance marketing and use data to continuously optimise their campaigns against their objectives.
So, this festive season, AI can help SMBs move faster on both the creative and campaign management sides, while making their advertising more targeted and effective.
There is a lot of discussion around AI-generated advertising looking generic or lacking attention to detail. Have you seen any consumer pushback against AI-generated campaigns, or concerns about the quality of these creatives?
What we have seen is quite the opposite. As I mentioned with Party Propz, its AI-generated video ads delivered a 35% higher CTR than the benchmark, indicating strong consumer engagement.
A key reason is that human control is still very much part of the process. AI can help create the video, but brands and advertisers review the output, refine the narrative, make edits and ensure the creative reflects the brand, product and consumer context.
Our study also highlights this. While SMBs are increasingly using AI, there is still a high level of human review, judgement and intervention in the creative process. Only 2% of respondents said their advertising decisions were fully automated with no human review.
So, AI is helping bring more ideas to life and making the process faster and more accessible, but the creative control still rests with the brand or seller.
The report says 62% of SMBs believe AI helps them find customers faster and protect their budgets. How important will this efficiency be during the festive season?
Efficiency will be critical, particularly when it comes to allocating the right budget. SMBs want to ensure that every rupee they spend is working towards their business objectives and delivering the maximum possible output.
This is where AI-based solutions such as Performance Plus can help. They use data to optimise campaigns and help brands make better use of their budgets, whether the objective is awareness, discovery or conversion.
So, as SMBs increase their advertising activity during the festive season, being able to optimise their campaigns and get the most out of their budgets will remain a key priority.
Is there a particular approach you would recommend to brands planning their festive activations on Amazon Ads? Where should they allocate their budgets to maximise impact?
There is no one-size-fits-all approach. The right advertising strategy depends on the brand’s objective.
For example, a brand launching a new product would need a different strategy from one promoting an existing range. We work with brands to understand these objectives and identify the solutions that can deliver the most efficiency for their campaigns.
Similarly, if a brand is looking to move beyond a niche segment and expand its customer base, it may need a combination of brand and performance marketing to build awareness while also driving business growth.
So, rather than following a fixed template, brands should look at where they are in their growth journey and what they want to achieve, and then build their advertising strategy and budget around those objectives.
Looking beyond this festive season, what do you think AI will fundamentally change about how SMBs advertise and compete in India?
I think the biggest change will be that AI makes advertising more democratic. Regardless of their size, brands and sellers can access sophisticated advertising solutions and compete on a more level playing field.
At the same time, SMBs will continue to remain at the centre of decision-making. AI can improve efficiency, reduce the effort involved in tasks such as creative production, audience identification and campaign optimisation, but the strategy, judgement and control will remain with the brand.
What is particularly significant is that these tools can now help smaller businesses achieve an enterprise-grade outcome. They can create professional-quality creatives, identify the right audiences and optimise campaigns without the scale of resources that were traditionally required.
That gives SMBs greater confidence to compete with larger brands. For me, that is the fundamental shift AI is bringing to advertising.
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