Is organic advertising the answer to costly paid search?

The digital advertising landscape is undergoing a seismic shift, with the integration of AI in search and advertising, fundamentally altering how brands approach discoverability. This transformation is not just about rising costs; it's about adapting to changing user behaviors and leveraging new technologies to maintain visibility and engagement in an increasingly competitive digital space.

Google's dominance in the search advertising market, despite recent challenges, remains significant. The tech giant's market share in India was over 95 per cent for search, and the company held 60-70 per cent of digital ad spends in the country. However, Google's global market share had dropped below 90 per cent by January 2025, signalling potential shifts in the search advertising ecosystem.

The rise of AI-powered search overviews and predictive recommendations has led to a notable decline in the effectiveness of traditional paid search advertising. Mihir Mehta, Managing Partner at 0101.Today, points to a recent study by Seer Interactive that revealed a staggering 53.6 per cent drop in click-through rates (CTR) on searches where AI-generated overviews appeared. “Organic search has regained its dominance, now driving 53 per cent of web traffic according to BrightEdge,” Mehta notes.

This shift has forced marketers to re-evaluate their approach, with many turning their attention back to organic search strategies. Venugopal Ganganna, Co-founder and Chief Innovation Officer at LS Digital, observes a 20-30 per cent increase in brands focusing on AI-led SEO and organic content strategies to offset the rising cost of paid acquisition. He predicts that “over the next two years, AI-powered organic strategies could drive a 40 per cent reduction in dependency on pure-play paid advertising for brands with mature digital ecosystems.”

However, the impact of AI on search advertising isn't uniform across all sectors. Sarvesh Bagla, Founder and CEO of Techmagnate, clarifies, “While Paid Search advertising rates have increased over the past year, AI Overview in particular doesn't affect the rates. AI overviews are triggered for information queries only and not for queries with commercial intent.”

Bagla provides insight into the BFSI industry, where search volumes continue to grow year over year.

Bagla illustrates the potential of organic strategies with a case study, explaining, “One of our clients - the biggest NBFC in India with over 40,000 keywords ranking in the top 3, dominates Google search results, drives millions of monthly organic traffic and drives well over Rs 10,000 crore in loan disbursals over 12 months. All this with zero investment in paid search. In comparison, another NBFC client spends close to Rs 100 crore on paid search advertising to disburse only Rs 1,200 crores over 12 months.”

The shift towards organic strategies is particularly pronounced in industries that rely heavily on trust, expertise, and depth of content. Ganganna highlights that “financial services, healthcare, and enterprise technology sectors are leading this transition, actively deploying AI-driven content clusters, NLP-powered knowledge graphs, and predictive search optimization to align with AI-driven search behaviors”.

Rajni Daswani, Director of Digital Marketing at SoCheers, adds, “Organic advertising—through SEO, content marketing, and social media engagement—is the first place a brand should invest in without expecting immediate results.” She notes that “70-80 per cent of users ignore paid ads in search results, emphasising the need for strong organic strategies”.

Daswani also points out that while some industries like healthcare, education, and SaaS are rapidly moving towards organic advertising, others such as e-commerce, travel, and BFSI still rely heavily on paid search due to high competition and purchase-driven user behavior.

The integration of AI in search advertising is creating new opportunities for advertisers to engage users with more relevant content. This could lead to more precise targeting of high-intent audiences, potentially increasing click-through and conversion rates. The personalised nature of AI-generated overviews offers a powerful opportunity for brands to reach audiences in a more tailored way.

However, the introduction of AI-powered ads in search results presents both opportunities and challenges for Indian advertisers. While AI-driven ads allow for more intuitive targeting, the competition for prime ad placements could intensify. Real-time data analytics will be crucial for optimising ad placements and improving targeting in this new landscape.

The digital advertising market in India has seen significant shifts, with digital advertising spend exceeding television spend for the first time in 2023. The search advertising market in India was projected to grow by 10.11 per cent between 2025 and the following year, indicating continued growth despite the challenges.

As we navigate this evolving landscape, it's clear that the future of search marketing lies in a balanced approach. Ganganna emphasises, "The future of search and advertising is not about choosing between organic and paid — it's about leveraging AI to create an intelligent marketing stack that harmonizes both."

While organic strategies are gaining prominence, paid search still has its place, especially in highly competitive sectors. The key for marketers will be to leverage AI not just for content creation and optimisation, but also for predictive audience segmentation and real-time performance modelling to find the right mix of organic and paid investments for sustainable growth in this new era of search.