India's digital ad spends to reach ₹69,856 crore by 2026: Dentsu report

Dentsu India has launched the 9th edition of its annual report, the ‘dentsu Digital Advertising Report 2025,' a deep dive into India’s evolving advertising ecosystem. Themed ‘Looking Through the Kaleidoscope,’ this year’s report shifts the focus from chasing the future to mastering the power of now. Instead of speculating on what’s next, the explores the convergence of technology, creativity, and consumer experience - the forces shaping India’s digital-first revolution.

Primary forces reshaping the ad landscape:

• Retail media’s meteoric rise: E-commerce is no longer just transactional, it's a full-funnel marketing ecosystem. Brands are leveraging hyper-personalised experiences, data-driven engagement, and closed-loop measurement to maximise impact.
• The hybrid marketing revolution: The traditional online-offline divide is vanishing. Integrated, omnichannel strategies are redefining consumer interactions, blending digital precision with physical-world impact.
• AI-Driven personalisation at scale: The age of one-size-fits-all marketing is over. Brands that master AI-powered, real-time consumer engagement will dominate the next era of advertising.

Other insights

• Regional content and hyperlocal storytelling are driving deeper audience connections.
• Influencer-led, community-first marketing is reshaping brand engagement.
• User-generated content is emerging as a trust-building powerhouse.
• Data-driven decision-making is no longer optional, it’s imperative.

Reflecting on the industry’s evolution, Harsha Razdan, CEO, South Asia, dentsu says, “The future isn’t a distant concept, it’s built in real-time, in the decisions we make today. The 2025 report is not just an analysis of industry trends; it’s a call to action. The brands that will lead tomorrow are the ones that see through the noise, connect the dots, and act before the world catches up. This report isn’t just about understanding the market, it’s about mastering it.”

Narayan Devanathan, President & Chief Strategy Officer, South Asia, dentsu adds, “Looking Through the Kaleidoscope’ is an invitation for marketers to go beyond the obvious. Creativity, technology, and media are no longer distinct silos—they are converging to shape consumer experiences like never before. The report equips brands with the insights, foresight, and strategy they need to build deeper, more meaningful connections in this new era.”

Here is a deeper look into the report.

Dominance of digital media

The shift towards digital platforms has been driven by increased internet penetration, evolving consumer preferences, and advancements in artificial intelligence. Social media leads the digital media segment, contributing 29% (Rs 14,480 crore) of total spends, followed closely by online video at 28% (Rs 13,756 crore). E-commerce advertising is also on the rise, comprising 22.93% of all digital ad expenditures, with FMCG and retail brands leveraging paid search and social media to drive engagement.

AI and personalisation

Artificial intelligence is playing an increasingly central role in digital advertising, automating content creation, enhancing audience targeting, and refining predictive commerce strategies. Generative AI is being used to craft hyper-personalised marketing campaigns, allowing brands to tailor their messaging more effectively. This shift underscores the growing demand for real-time, data-driven advertising solutions that maximise consumer engagement.

The rise of retail media and programmatic buying

Retail media is emerging as a significant advertising channel, with ad spends on e-retail platforms growing at a rate of 23.43%. By integrating first-party shopping data, brands can target high-intent consumers with precision. Meanwhile, programmatic advertising continues to gain traction, accounting for 42% (Rs 20,686 crore) of digital media spending in 2024. This figure is expected to grow to 44% by 2026, underscoring the industry's transition towards automated, data-driven ad placements.

Challenges and future outlook

Despite strong growth, the digital advertising sector faces challenges related to data privacy, ad fraud, and the balancing act between AI-driven automation and authentic storytelling. While digital media's share of advertising spend is projected to reach 61% by 2026, traditional channels such as television (28%) and print (17%) remain relevant, particularly for large-scale campaigns and regional outreach.

As the industry evolves, brands that leverage AI, omnichannel marketing, and culturally resonant storytelling will be best positioned to navigate the changing landscape and engage effectively with India’s diverse digital audience.