Unfavourable picture for the Indian AdEx: Inside the latest forecasts for 2025

2025 may not be a promising year for the Indian advertising industry. As is tradition, the second month of the year sees a flurry of reports from advertising giants. Media agencies dentsu, GroupM and Madison have released their forecasts for 2025, and while their projections differ slightly, all agencies agree on one thing: it is going to be a slow year for India.

Madison, for one, predicted that the growth of India’s AdEx has slowed to 9% and declared it the lowest increase since 2017, calling it ‘the new norm’ for the country. The industry is now valued at Rs 1.08 lakh crore. The homegrown media agency pointed out that this is the first time Indian AdEx has grown at a slower rate than Global AdEx.

The report also highlights that H1 2024 grew by 16% due to the ICC T20 World Cup, spending by government institutions, and political parties during the general elections. However, H2 grew by just 1%, resulting in the overall poor performance of 9% for the year.

Looking ahead, GroupM projects 7% growth for India's advertising market in 2025, down from 8.8% in 2024, reaching ₹1,64,137 crore with an incremental ₹10,730 crore.

On the other hand, Dentsu India says that the Indian advertising industry is projected to grow at 6.5%, reaching a market size of Rs 1,07,664 crore in 2025.

Digital remains strong

According to dentsu, Digital and OOH (Out-of-Home) are the only media segments with a positive growth outlook until 2026, reflecting the Indian advertising industry's shift toward platforms offering stronger engagement and flexibility. In contrast, traditional media—Television, Print, Radio, and Cinema—are projected to witness a decline over the same period.

GroupM predicts digital's share will rise to 60% of overall AdEx, with its growth rate pegged at 11.5%. Digital is expected to capture ₹10,225 crore of incremental advertising. Of the ₹10,730 crore in total incremental advertising, digital is expected to capture ₹10,225 crore.

Dentsu reported that social media holds the largest share of ad spend in digital, contributing 29% (Rs 14,480 crore) to the Indian digital media industry. This is closely followed by online video, which accounts for 28% (Rs 13,756 crore) of the ad spend. Paid search contributes 23% (Rs 11,402 crore), while display banners make up 16% (Rs 7,964 crore) of the digital advertising market in India.

Social media is expected to grow at a CAGR of 20.22% over the same period, while paid search is forecasted to grow at 16.85%.

Growth drivers

Experts are calling this a ‘modest’ growth, which will be driven by sporting events such as the Indian Premier League 2025, the ICC Champions Trophy, and the Asia Cup 2025, along with other cricketing events.

Key sectors such as e-commerce, automotive, BFSI, FMCG, and retail will continue to dominate both digital and traditional media. The scale of offers and promotions across retail media, e-commerce, and D2C platforms is expected to be substantial, driving significant consumer engagement. According to Dentsu, the FMCG segment continues to dominate the Indian advertising space, contributing 31% (Rs 31,467 crore), followed by e-commerce and quick-commerce brands that capitalize on impulse buying. The e-commerce segment accounts for 15% (Rs 15,509 crore), while the consumer durables category contributes 7% to the overall advertising industry. This reflects the diverse and dynamic nature of market spending.

GroupM predicted that sectors contributing to 60% of advertising (SME, Realty, Education, BFSI, Tech/Telco) will grow at around 10% in 2025.

After the unveiling of the Union Budget, experts have also expressed optimism for the tourism and travel sector. In 2024, Dentsu reported that the travel and transport sector saw the highest advertising expenditure growth, rising by 33.4% compared to 2023. This growth was driven by the successful ‘Chalo India’ campaign aimed at attracting global tourists, the Maha Kumbh Mela 2025, and various local campaigns promoting India’s diverse landscape and cultural heritage.

Finance Minister Nirmala Sitharaman emphasized tourism as a driver of employment-led growth and unveiled a series of initiatives aimed at bolstering infrastructure, skill development, improving ease of travel, and connectivity to tourist destinations. With this, experts predict buoyancy in the travel sector.

Dentsu also reported growth in other sectors, including telecom (19.8%), consumer durables (19.4%), and government and social organizations (18%).

Despite muted growth in 2025, dentsu India forecasts a 7.2% growth in 2026, expecting an expansion of the market size to ₹1,15,460 crore by year-end.