India AdEx to reach Rs 1.30 lakh crore in 2026; digital share seen at 70% by 2027: dentsu

New Delhi: India’s advertising market is projected to rise to Rs 1,30,416 crore by end-2026 and Rs 1,40,001 crore by 2027, growing at a CAGR of 7.41%, according to dentsu’s Digital Advertising Report 2026.

The industry closed 2025 at Rs 1,21,339 crore, registering 8.3% year-on-year growth, despite macro-economic uncertainty, the report said.

Notably, these projections mark a clear upward revision from dentsu’s outlook a year ago. In its previous report, the agency had forecast the Indian advertising industry to grow at 6.5% in 2025, reaching Rs 1,07,664 crore, with growth accelerating to 7.2% in 2026 and a market size of Rs 1,15,460 crore.

The latest estimates indicate that the market has not only outpaced those expectations but has also scaled significantly higher, underlining stronger-than-anticipated momentum in advertiser confidence, digital adoption and performance-led spending.

Digital advertising continues to lead this expansion. With digital already accounting for 59% of total ad spends, it is projected to reach Rs 98,034 crore by end-2027, taking its share to 70% of India’s total advertising spends by 2027, the report added.

Traditional media, in contrast, continues to lose share. Television is projected to decline from 21% in 2025 to 18% in 2026 and 15% in 2027. Print is projected to drop from 14% in 2025 to 12% in 2026 and 10% in 2027.

OOH is the exception in the traditional stack. The report notes OOH is the only traditional format expected to grow, projecting a 3% CAGR and a 4% share by 2027.

It attributed the resilience to the scaling of digital OOH networks, modernised transit infrastructure and rising demand for high-impact urban visibility, factors that make OOH easier to buy, measure and integrate into broader omnichannel plans.

Dentsu attributed the digital surge to sustained adoption of digital-first marketing, deeper integration with commerce, and measurable, performance-led outcomes.

Digital advertising grew 19% in 2025 to reach Rs 71,621 crore, making it the largest advertising medium in India for the first time. The scale of this shift becomes clearer in historical context. In 2016, digital accounted for just 12% of total advertising spends. Within a decade, it has moved to the centre of the media mix, overtaking television and print and reshaping how advertisers allocate budgets.

The momentum behind digital is being reinforced by structural changes across India’s economy. Expanding digital infrastructure, widespread smartphone adoption, affordable data, and the growing reach of India’s Digital Public Infrastructure, including UPI and ONDC, have enabled advertising to move closer to transactions and outcomes.

Policy tailwinds such as MSME digitalisation and the Make in India initiative have further broadened the advertiser base, particularly among small and mid-sized businesses.

Within digital, spending continues to concentrate around a few key formats. Social media remains the largest digital segment, accounting for Rs 21,057 crore, or 29% of digital ad spends, followed closely by online video at Rs 20,004 crore and a 28% share.

Paid search contributes Rs 16,581 crore, while display advertising stands at Rs 11,581 crore. Online video is the fastest-growing format and is projected to overtake social media in share by 2027, reflecting the growing importance of short-form video, OTT platforms and regional-language content.

A significant contributor to digital’s rise is retail media, which has emerged as one of the fastest-growing advertising channels in the country.

Advertising spends on e-retail platforms surged 55.86% in 2025 to reach Rs 17,601 crore, accounting for nearly 25% of total digital ad spends. Marketplaces are increasingly positioning themselves as media ecosystems, offering advertisers closed-loop measurement that links ad exposure directly to purchase behaviour.

Sectoral spending patterns further underline the digital shift. FMCG remains India’s largest advertising category, with spends of Rs 36,084 crore, accounting for 30% of the total market, and a strong focus on digital video and social platforms.

E-commerce, at Rs 22,132 crore, is the second-largest category and the fastest-growing, driven by intense competition, quick commerce expansion and always-on performance marketing. Telecom, BFSI, automotive and real estate are also increasing digital allocations as customer acquisition and engagement move online.

Notably, while the report outlines the rapid rise of digital formats such as social media, online video, search and retail media, it does not position generative AI platforms as a distinct or credible advertising channel within the current media mix.

Despite growing industry discussion around AI-native environments, conversational interfaces and generative discovery tools, advertising investments continue to be concentrated within established, scalable ecosystems. 

The absence of generative AI as a standalone advertising platform in the media share framework suggests that, at present, advertisers view AI primarily as an enabler of planning, targeting and optimisation, rather than as a destination for media spends. 

This is reflected in the report’s emphasis on AI-led media optimisation and automation, rather than on AI surfaces as inventory. 

This gap highlights that while AI is rapidly influencing how advertising is bought and optimised, its role as a direct advertising channel remains nascent, pending greater transparency, clearer metrics and stronger proof of effectiveness.

Commenting on the special edition, Harsha Razdan, CEO, South Asia, dentsu said, “Reaching ten editions of this report gives you perspective. You realise how much has changed, and how much hasn’t. Tools have evolved, the pace has accelerated, and expectations are higher. But the most meaningful shift has been human. People are far more deliberate about what they give their attention to. Innovating to Impact grew out of that learning. It is about doing work that earns its place, respects people’s time, and delivers outcomes that last.”

Narayan Devanathan, President and Chief Strategy Officer, South Asia, dentsu added, “A decade ago, the challenge was understanding rapid change. Today, it is navigating complexity with clarity. The next phase of growth will belong to organisations that can bring creativity, data, media and technology together in ways that work in the real world. This report is designed to help leaders move beyond channels and focus on building relevance, resilience and long-term value.”