Daybreak - The click is dead. Long live the answer

Episode Date: April 1, 2026

For a decade, digital advertising ran on one idea: get to the top of Google. Buy the keywords and earn the clicks. That was the game.But AI just changed the rules.ChatGPT and Gemini now have over a billion and a half users between them, growing at nearly 200% year on year. People have stopped searching for links. Instead,nthey're asking questions and expecting answers. And those answers mention three brands, maybe four. For the rest who don't make it to these answers, it's like they don't even exist.What will those brands do? Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

In a Flipkart office somewhere in February this year, somebody decided to sponsor a cricket team from a country that most Indians couldn't even point to on a map. The T20 was on and India was playing against Namibia. Not the type of fixture that usually brings in the masses. And yet, there it was, the Flipkart logo on the Namibian jersey. This is Flipkart that we're talking about, which has zero presence in that country. It looked absurd.

But as it turns out, that was the whole point. Because guess how much that absurdity cost Flipcott? Less than 1% of the nearly 600 crore rupees that Apollo tires spent to put their name on the Indian jersey. To put it straight, Apollo tires sponsored India, but Flipcott sponsored a question. And that question, which is also playing in your head right now, why did Flipkart sponsor Namibia is exactly what millions of people typed into chat GPT, Gemini, perplexity after that match. The AI chatbots, trying to be helpful as they always are,

send them straight to Flipkart's own ad answering that question. The whole thing was engineered from the very beginning. Flipkart walked away with 250 million social media views a 2.5% engagement rate and over 5,000 creators posting about them. And here is what Flipkart had understood. The internet now has a new front door. And it is not Google anymore. For a decade, digital advertising ran on one loop.

Search, click, buy. That click was everything. It was trackable, billable. The entire economy of the internet ran through it. And that loop is now breaking. Google's net advertising revenue in India fell 2% to 2,600 crore rupees in the financial year 2025. In the same year, digital advertising in India as a whole grew 22%. It's not like the money disappeared, though.

It just moved. Where it went, what its funding and what it means for every brand that is still playing by the old rules, that is what we're going to get into today. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Da Sharma, and I don't chase the new cycle. Instead, every day of the week, my colleague Rachel Vargheese and I will come to you with one business story that is worth understanding and worth your time. Today is Thursday, the 2nd of April.

Start with the obvious first. What is different about the way that AI answers questions? Google would give you a page of links, 10, 20, sometimes even more. It was messy. But there was room in that mess. If you were a brand, making to the top 10 was enough to stay alive. LLMs do not give you that page. They just give you an answer.

Three options, four options, if you are lucky. These are synthesized from Reddit threads, LinkedIn posts, YouTube videos, and whatever else that the algorithm decides is quote-unquote authentic. J.P. Mojanty, the founder of Digital R&D Platform Better Labs, described it to my colleague the Ken reporter Supri Tanapam. Mohanthi said people won't just search for the best toothpaste anymore, for example. They will tell Gemini the condition of their teeth and ask what works best for them. The response that they get will feel like advice from someone that knows them well,

and it will mention two to three brands. And you have to be one of those three, or you might as well not exist. This has given rise to a whole new discipline. SEO or search engine optimization built an entire industry. Now there is AEO, which is answer engine optimization and GEO, which is generative engine optimization. The goal is the same. Be findable. But what findable means has completely changed.

Sanditya Shivasov, the founder of AI intelligence platform, Unveiler AI says that AI mentions convert four, five times better than Google search results. And the results also come faster. A Shark Tank funded online lingerie brand competing with players like Zivame came to Shavasava's company recently. Within weeks of fixing their AEO issues and building the right content around their product, they had three times more AI mention and their growth had doubled. The same outcome would have taken four to six.

six months in the SEO era. So what does the right content look like? Clean label food brand, the whole truth, is a useful case study. Its founder runs a YouTube channel. He writes long personal posts on LinkedIn and the brand publishes its own lab tests publicly. None of it looks like advertising and all of it is the kind of quote unquote authentic content that LLMs treat as credible. The brands that did not adapt are a case study of a different kind.

For example, the social learning platform Blue Learn, Savings app Gold Pay, ed tech company Lido Learnings, an advertising veteran who has worked with Lipkart and Maruti Suzuki traces part of their failure to exactly this. Poor visibility in an AI-first world meant that they simply could not generate enough demand. The top three get everything.

The rest get nothing and that is the new math. So what do brands do when one channel starts failing them? Stay tuned to find out. The immediate instinct is to be everywhere at once. Newspaper ads are up by more than 20% over the last three years. Quick commerce platforms, blinkets, Zepto, Swiggy, Instamart earned 3,000 crore rupees in ad revenue last year. alone compared to nothing just a few years ago.

Instagram campaigns are also exploding and companies like Nike, Lenskart and the sole store are pushing hard into offline retail, which is physical stores as a hedge against the unpredictability of the internet. Meanwhile, Google itself is shifting under everybody's feet. Nearly one in six queries in its new AI mode are now voice or image-based, according to its CEO Sundar Pichai. And that compresses the space for visibility even further. The result is that reaching a customer costs significantly more. Customer acquisition costs for D2C brands have jumped 15 to 30% in the last couple of years. Lenskart's ad expenses were up by 40% in the third quarter

of the financial year 2026 compared to the same quarter last year. Mama Earth's ad spend in FY 2025 was up nearly 20% year-on-year. And the return on all this spending is getting murkier. Take Instagram. Manish Solanke, co-founder and CEO of Digital Marketing Agency, the small big idea, is direct about it. The platform, they say, is a great discovery, but people scroll there to kill time.

Conversion stays poor, brands keep paying away for clicks, impressions, influencers, agency fees, but the math does not always work, and stopping feels riskier than continuing. AI is at least making the production site cheaper. Brands can now test 10 to 20 ad variations instead of 3 to 5. Production costs are also down by 20 to 40%. Earlier this year, Perplexity founder, Arvin Srinivas,

announced that Perplexity can now connect directly to Google and meta ads, APIs, potentially cutting more than $200,000 a year in marketing costs by automating the optimization layer entirely. But here's the thing. Cheaper production does not fix the visibility problem. What's actually happening is a consolidation. Fewer brands are breaking through. The middle, which is a decent product, a reasonable budget and steady growth is getting

squeezed out. To be seen now, you either build something. genuinely good with the content and community conversation to back it up, or you spend heavily to look like you have. The interesting thing about Flipcard is that it did neither. What it did do, though, is that it spent very little and engineered a lot of curiosity. And in a world where AI decides what's worth recommending, that might be the most honest blueprint that we have.

Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague, Snitha Sharma,

and edited by Rajiv CN.