From mobile usage to language barriers: The problems with YouTube’s AI ads in India

YouTube, probably the most popular streaming platform in the world, has seen exponential growth in its user base over the last few years, especially in India, which is their largest market.

As per Global Media Insight, YouTube boasts of a staggering 491 million users in India, almost double of their second biggest market, the USA, where the number of YouTube users is around 253 million.

In countries like the UK and USA, YouTube has also seen massive growth in connected TV viewing, where it is racing ahead of broadcasters or other content streaming services.

This surge in connected TV viewing is making the company consider shifting to AI-driven ad placements in between videos, which they believe will help brands have a greater return on investment (ROI) on the platform.

This might be possible in countries like the UK and USA since connected TV viewing experience is similar to the traditional way of watching content. But this formula might not work so well in the Indian market. Let us find out why:

1. Mostly mobile-first consumption in India

Not only in India, but across the world, the cellphone dominates (63%) the list of devices consumers use for watching YouTube content.

In India, especially in rural areas, the cellphone becomes the only 'computer' for many families. These families mainly use data packs and do not opt for unlimited WiFi plans that come for a steeper price.

YouTube, if it wants to implement AI-driven ad placement in India, will have to take into consideration the usage pattern of this consumer base and their financial restrictions. Any step that increases their expenditure might lead to a fall in the streaming service's user base.

2. Language barrier a huge issue in India

Language barrier is a huge issue in India, and if AI-placed ads do not take this into consideration, it can be an exercise in vain for the advertisers as well as the platforms.

Language will not only have to be determined geographically, but also based on the preferred language in which the user consumes content. If YouTube targets all Indian users in a similar way,

3. Connect TV ads mainly for premium audiences

As per Google's own report, connected TV streaming is where the premium audience is (7 out of 10 premium users use CTV), and only if this segment is targetted by AI-placed ads, the companies can see an increase in business.

4. AI-driven ads can deter people from YT content

If the average user who only watches YouTube on their phone is targetted with several AI-driven ads which might not take into consideration their data constraints, it ,might negatively affect user satisfaction.

5. Internet issue in rural areas

Not all of India gets similar access to the internet. In some rural areas connectivity is a major issue. In such cases, if an ad takes away time from the user while also using up their data, user experience may take a hit and hamper YouTube's performance.

6. Will AI not target Premium users?

One questions which persists in this case is whether YouTube will be collecting user data of those consumers who use YouTube Premium for AI-driven ads. This will be a futile exercise since YT Premium users are not shown any ads in the first place.

Even CTV consumers are likelier to use YT Premium for a smoother user experience, and thus questions arise whether the AI-driven ads will be able to determine their target audience in the first place.

Besides these points, one notable factor is the lack of independent research on YouTube's ad placement policies. While the company says their AI-based ad-targetting has helped businesses grow, independent verification can lead to wide disparity in results based on sectors, hyperlocal audience usage patterns, and creative execution in targetting users of diverse backgrounds.