Digital becomes India’s largest ad channel in 2025 to take 70% adex share by 2027: Dentsu Report

India’s advertising industry grew by 8.3% in 2025 to reach Rs 1,21,339 crore, despite broader macroeconomic uncertainty, according to the dentsu Digital Advertising Report 2026.

The report projects the advertising market to grow to Rs 1,30,416 crore by the end of 2026 and further to Rs 1,40,001 crore by 2027, implying a compound annual growth rate of 7.41%. Growth is being supported by stronger domestic consumption, expanding digital commerce and policy-led accelerators, including MSME digitalisation and the Make in India initiative.

The report said traditional media continues to retain scale but is steadily losing share as advertisers shift budgets toward digital-first, performance-led channels. Election-related spending and public-sector communication are expected to support near-term growth across mainstream and regional media.

Digital advertising grew 19% in 2025 to Rs 71,621 crore, accounting for 59% of India’s total advertising spends, the report said. Digital media is projected to grow at a compound annual growth rate of 17%, reaching Rs 98,034 crore by 2027 and accounting for 70% of total ad expenditure.

The report noted digital’s growth is being driven by mobile-first consumption, short-form video, creator-led commerce, AI-powered ad technology and the expansion of India’s Digital Public Infrastructure, including UPI and ONDC.

Television remained the largest traditional medium in 2025, accounting for 21% of advertising spends, or Rs 25,964 crore. Print followed with a 14% share at Rs 16,594 crore. Out-of-home advertising accounted for 4% or Rs 4,724 crore, while radio and cinema held 1% shares at Rs 1,501 crore and Rs 935 crore respectively.

The report said the media mix has shifted sharply over the past decade, with digital’s share rising from 12% in 2016 to 59% by the end of 2025. Digital is projected to account for 70% of ad spends by 2027, while television’s share is expected to fall to 15% and print’s share to 10%.

Out-of-home advertising is the only traditional medium projected to grow, expanding at a CAGR of 3% through 2027, supported by digital OOH networks and urban infrastructure upgrades.

Social media accounted for the largest share of digital ad spends at 29%, or Rs 21,057 crore, followed by online video at 28%, or Rs 20,004 crore. Paid search contributed 23%, or Rs 16,581 crore, while display banners accounted for 16%, or Rs 11,581 crore. Other formats, including classifieds, made up 3%.

Online video is projected to grow at 22.30%, reaching a 29% share by the end of 2026. Social media is expected to grow at 18.77% and maintain a 29% share during the same period. Paid search is projected to grow at 16.54%, stabilising at a 23% share, while display banners are expected to grow at 16.16%.

Advertising spends on e-retail platforms reached Rs 17,601 crore by the end of 2025, accounting for 24.58% of total digital media spends. The segment grew 55.86% year on year, the fastest among all digital channels.

The report said retail media is evolving from a lower-funnel performance channel into a full-funnel advertising ecosystem, integrating storytelling, discovery, transaction and measurement within unified platforms.

Retail media is expected to become a core advertising pillar as commerce and media converge more closely over the next decade.

Programmatic advertising accounted for 42% of digital media spends in 2025, or Rs 30,081 crore, growing 19% over the previous year. It is projected to grow at a compound annual growth rate of 18.77%, reaching Rs 42,435 crore and a 43% share by 2027.

The report attributed the growth to deeper automation, increased use of first-party data, AI-led optimisation and the rise of retail media networks.

FMCG remained the largest advertising category, accounting for 30% of total ad spends, or Rs 36,084 crore. E-commerce followed with an 18% share at Rs 22,132 crore, while automotive contributed 7% or Rs 7,821 crore.

In 2025, e-commerce recorded the strongest growth at 40.8%, followed by telecom at 24.2%. BFSI, automotive and real estate also posted steady growth.

In digital advertising specifically, FMCG accounted for 32% of spending, or Rs 23,243 crore, followed by e-commerce at 22%, or Rs 15,836 crore. The e-commerce sector recorded a 56% increase in digital ad spends, followed by tourism at 54%, education at 50% and automotive at 48%.

The report said the next decade will redefine how media, technology, culture and commerce converge in India. Retail media, attention-based measurement, AI-driven personalisation and culturally rooted storytelling are expected to shape the industry through 2035.

Attention, emotional connection and cultural relevance are expected to replace impressions as key measures of effectiveness, while creativity is expected to play a central role in enabling brands to participate meaningfully in people’s lives.

India’s cultural landscape is being reshaped by regional language audiences, women-led creators, and voices from smaller towns. Regional creators and micro communities are expected to become global exporters of culture as streaming and creator ecosystems expand their reach.

Purpose-driven storytelling will matter only when supported by real commitments and transparent practices. As Gen Z and Alpha prioritise wellbeing and fairness, they will favour grounded, empathetic content, rewarding brands that demonstrate authenticity and accountability.

Subscription fatigue will cause consumers to shift toward consolidated lifestyle bundles that integrate OTT content, news, gaming, and everyday services under transparent pricing or ad-supported models. These unified packages will simplify access, reduce costs, and deliver clearer value across categories, making them increasingly attractive to mainstream users.

AI-human hybrid creativity will become standard, blending human imagination with AI-driven production.