AI Overviews Push FMCG Search Costs Up by 20–40%; Brands Shift to AIO + Retail Media

What Happened as AI Overviews Reshape FMCG Search in India?

AI Overviews (AIO), Google’s generative search feature, is creating one of the biggest structural shifts Indian FMCG marketers have faced in a decade. As AIO answers increasingly appear above ads and organic listings, FMCG search costs in India have risen by 20–40%, according to aggregated performance insights from agencies and brand marketers.

The core issue: visibility compression. AIO occupies prime search real estate, forcing brands to raise bids to maintain top-of-page presence — especially for competitive FMCG segments such as skincare, packaged foods, personal care, household cleaning, and nutritional supplements. While global reports covered AIO’s impact, they often lacked India-specific performance insight, especially on how FMCG discovery behavior differs across Hindi, Tamil, and regional search environments.

This article fills that gap with updated analysis tailored for Indian marketers.

 Key Insights: Why FMCG Search Costs Are Increasing in the AIO Era1. AI Overvie

 ws Reduce Above-the-Fold Inventory

With generative answers occupying more space, Google Ads units and organic blue links shift downward. FMCG brands, which rely heavily on search intent, now face higher:

• CPCs (cost-per-click)
  
  
• CPAs (cost-per-acquisition)
  
  
• competition for brand + generic queries
  
  

AIO affects categories with informational queries the most — e.g., “best face wash for oily skin,” “healthy breakfast options,” “baby care products.”

2. FMCG Users Trust AIO Recommendations More Than Expected

AI-generated summaries often list attributes such as “gentle on skin,” “paraben-free,” “high protein,” “safe for kids.”
This pushes users toward AIO-recommended products or attributes rather than purely ad-driven discovery.

Expectation-based behavior is shifting search intent itself.

 3. Brands Are Switching to AIO Optimization (AIO-SEO)

To regain visibility, FMCG marketers are adopting AIO optimization, which includes:

• structured product attributes
  
  
• experience-rich content
  
  
• expert-led citations
  
  
• multi-language structured FAQs
  
  
• entity-driven product positioning
  
  
• safer, compliance-ready claims
  
  

These appear more frequently in AIO answers, improving brand presence without relying solely on paid ads.

 4. FMCG Budgets Shift Toward Retail Media Networks

As search costs rise, brands increasingly redirect budgets to Amazon Ads, BigBasket Ads, Blinkit Ads, Flipkart Ads, and Reliance Retail Media.
Retail media offers:

• closed-loop attribution
  
  
• SKU-level conversion insights
  
  
• better bottom-funnel efficiency
  
  
• higher purchase intent
  
  

For categories like beauty, snacks, beverages, and hygiene products, retail media now delivers more predictable ROAS than traditional search.

5. AI Reshapes Content, Packaging & Product Page Strategy

AIO prefers clean product descriptions, science-backed benefits, and trustworthy citations.
FMCG brands are revamping:

• PDP content
  
  
• packaging callouts
  
  
• health/ingredient messaging
  
  
• expert validation frameworks
  
  

This is particularly impactful for Chennai, Bangalore, Mumbai, and Tier-2 markets where vernacular search is expanding.

 Why This Matters for Indian FMCG Marketers & Businesses

The implications are significant:

• Higher acquisition costs demand better content quality and conversion optimization.
  
  
• Retail media becomes essential, not optional, for FMCG scaling.
  
  
• Creative + content + performance teams must collaborate more closely.
  
  
• Local-language queries require structured multilingual optimization.
  
  
• AI-era compliance frameworks matter to avoid misleading claims within AIO summaries.

 Final Takeaway — AIO Resets the FMCG Search Playbook in India

AI Overviews are redefining how Indian consumers discover FMCG brands. As search costs climb by 20–40%, marketers must balance AIO optimization, retail media investment, and conversion-first design to sustain growth.

2025 favors brands that integrate AIO-SEO, retail media analytics, and structured content. Digilogy helps FMCG companies modernize search strategies, build authority-first content, and deploy full-funnel execution tailored for India’s AI-driven ecosystem.
Elevate your digital strategy with Digilogy—optimize for the AI era with smarter FMCG search and retail media execution.