What Madison HiveMinds’ 2025 year-end note reveals about digital marketing

India’s digital and marketing landscape showed signs of maturity in 2025, with artificial intelligence moving from experimentation to wider, practical use and consumer demand shifting decisively beyond major cities, as per the analysis shared by Madison HiveMinds.

The year marked a transition from early questions about AI’s potential to a focus on its measurable outcomes. Search behaviour evolved as users moved from keyword-based queries to conversational formats. Industry data showed OpenAI’s ChatGPT usage rising 160%, prompting brands to focus less on keyword rankings and more on establishing brand authority, as AI-led discovery increasingly influences consumer decisions.

Consumer demand continued to broaden geographically. Tier II and Tier III cities accounted for about 80% of online festive sales in 2025, while metro markets remained higher value but no longer dominated volume growth. Analysts said the figures underline a structural shift in India’s digital economy, with smaller cities playing a central role in online consumption.

Quick-commerce platforms like Blinkit and Zepto expanded their reach during the year, becoming a common channel for daily purchases. The growth in ad spends, however, also intensified competition and margin pressure for brands, particularly as advertising costs rose and localised campaigns became more critical.

Brands with the ability to invest in advanced campaign tools and premium placements were better positioned to maintain visibility in the fast-delivery segment.

Several sectors, including fintech, gaming and health, faced rapidly changing regulatory and market conditions in 2025. With real-time data becoming more accessible, companies that could adjust strategies quickly were seen to have an advantage over those reliant on slower decision-making processes.

At the same time, the divide between digital and traditional media continued to narrow. While offline advertising spending declined, online spending grew at double-digit rates, supported by increased consumption of connected TV content.

Looking ahead to 2026, it is expected to be a period of consolidation, with AI embedded more deeply across marketing and commerce functions. Developments such as agent-led AI systems and AI-curated product displays are expected to become more common, increasing the importance of early adoption and integration.

Changes to advertising platforms are also shifting greater control to algorithms, placing increased emphasis on creative content as a key differentiator. AI tools are now being used to link creative elements more directly to profitability measures such as customer lifetime value, rather than relying only on click-through rates.

The growing complexity of the ecosystem is also driving wider adoption of customised technology tools by brands and agencies. Some firms said they are investing in AI-led marketing tools, with certain initiatives receiving backing from Google’s technology fund.

Overall, 2025 marked a recalibration year for digital marketing in India, setting the stage for 2026, when success is expected to depend less on managing individual platforms and more on integrating data, creativity and commerce into a unified consumer journey.