India’s adex-to-GDP ratio at 0.5% lags UK, US, China; WPP Media leaders explain the gap

New Delhi: India’s advertising expenditure was about 0.5% of GDP in 2025. In comparison, advertising as a share of GDP is higher in several large markets, with the UK at about 1.5%, the US at about 1.4%, and China at about 1.1%.

A higher adex-to-GDP ratio usually signals that more industries are using advertising to drive demand, scale brands and widen consumer participation.

With India at 0.5% versus these benchmarks, there is room for advertising penetration to rise as more categories join the spend pool.

WPP Media leaders Prasanth Kumar, CEO South Asia, and Ashwin Padmanabhan, COO South Asia, said India’s lower ratio is less about a lack of intent to advertise or lower ad pricing and more about structural factors.

They pointed to the composition of India’s GDP, the concentration of ad spends in a few categories, and the pace at which technology-led marketing is expanding the advertiser base.

“It also means that we have a long way to go in terms of advertising penetration, so there is a lot of room for growth,” Padmanabhan said.

WPP Media India, in its annual TYNY report, has projected India’s advertising market to grow 9.7% in 2026, with total ad revenue estimated at Rs 2,01,891 crore, up Rs 17,844 crore over 2025, as digital-led formats deepen their hold on brand budgets.

Kumar said a large part of India’s GDP comes from sectors that do not advertise in proportion to their economic contribution, which keeps the overall adex-to-GDP ratio lower.

“I think in India’s case, and we often debate this, it is because many of the sectors that contribute significantly to GDP, such as manufacturing, agriculture, pharma, mining and global IT services, contribute a large share to GDP calculations, but they do not contribute much to advertising,” Kumar said.

Kumar said India’s ad market is still heavily concentrated in a few large advertiser groups, which limits how quickly the overall ratio can rise.

“From an advertising spend point of view, SMEs are the biggest contributors today, followed by FMCG, and then commerce. If you look at the top five categories, they account for close to 70% of total adex, and possibly more,” Kumar said.

He said the base beyond the top few categories remains thin, and that is where the ratio improvement has to come from.

“The ‘others’ segment is still a very small number, and we are not seeing enough contribution from the next set of categories. Many of these do not include sectors like pharma and others that contribute strongly to GDP. When more of these sectors start advertising, the ratio will begin to improve,” Kumar said.

He also linked higher advertising intensity in developed markets to faster technology adoption, and said India could see similar effects as adoption deepens.

“In other markets, the pace of growth across categories has been faster because technology adoption has been much higher, especially in China, the UK and the US. We have seen in the US that as technology adoption increases, ad spends go up further. I think we will start seeing that in India,” he said.

Post-2020 digital shift lifted the ratio

Padmanabhan said India’s adex-to-GDP ratio has climbed steadily over decades, but the sharper jump came after the pandemic as digitalisation accelerated.

“As you will see, almost every decade we’ve moved from 0.2 to 0.3, then 0.3 to 0.4, and now we are at 0.5. But the point of inflection really happened post 2020, after Covid,” he said.

“The digitalisation that happened pumped up our advertising as a percentage of GDP to almost 0.4, and then to 0.5,” Padmanabhan added.

He said the next step-up could come as income levels rise and consumption expands, which typically brings more advertisers into the market.

“We think that the next point of growth or inflection will be around when we’ll touch about $4,000 from a per capita GDP perspective. It is about $2,800 right now. When we get about $4,000, I think we will see another jump up from this 0.5% that we are seeing today,” Padmanabhan said.

Lower pricing can skew comparisons, but opportunity remains

Kumar said India’s lower advertising pricing compared to some global markets can affect comparisons, but he framed the low ratio as a growth opportunity.

“Of course, maybe our pricing is lower if you compare the CPMs globally. But also the fact is that because we have a lower GDP-to-ad ratio, it means there’s an opportunity there,” he said.

He argued that growth will depend on advertising being tied more directly to business outcomes and on demand generation expanding beyond the current base.

“And the opportunity essentially has to come from business outcome growth. And that’s where we probably focus a little bit on demand generation. It’s not enough,” Kumar said.

Kumar said the marketing ecosystem has expanded, including influencer and commerce-led channels, but stressed that customer acquisition and reach remain central.

He added that technology, data-driven planning and commerce capabilities will help, but the industry cannot rely on a single lever if it wants to expand the advertiser universe.

“And therefore, how it is utilised by enhanced technology, data-driven, and some of the commerce aspects, but it won’t be only focused on one aspect. And therefore, you will get the growth, because you will still be playing in the same universe. Whereas you want people to come into the universe. So, therefore, you have to do many more things,” he said.

GDP measurement debate and post-2020 category shifts

Kumar said the adex-to-GDP debate should also be read alongside how India’s economy is evolving. He referred to the government’s discussions on revising GDP calculations and said the pandemic accelerated digital adoption and changed how businesses operate.

GST 2.0 seen as early, limited impact so far

On GST 2.0, Kumar said early signs were visible in the latest quarter, but it is too early to quantify the full effect. He added that GST 2.0 has been treated as a positive factor in growth assumptions for the current year because it could nudge higher spending in some categories, even if the overall impact is not expected to be large.

Macro caution continues, but tech-led resilience remains

Kumar placed the advertising outlook against a mixed macro environment, saying recovery continues, but uncertainty remains.

“While post-pandemic recovery continues, we have seen how geopolitical conflicts, tariffs, trade frictions and inflationary pressures are shaping consumer purchasing power," he said.

“Economic volatility, currency swings and investor caution have led many brands to adopt a more measured approach,” Kumar added.

He said resilience is visible through technology and the rapid growth of digital platforms, and argued that the next phase of marketing will be driven by tech-enabled demand generation and omni-channel planning.

“As we look ahead to 2026, marketing’s revolution will be driven by tech-enabled opportunities and multi-faceted demand generation. The real opportunity lies in the hands of modern marketing, which will expand to scale and precision, culture and commerce, and data and privacy compliance measurement, which will also include omni-channel strategies,” Kumar said.

Kumar also said the expanded ecosystem is reshaping how advertising is deployed across content, intelligence, location and commerce.

“Reaching an engaging consumer is never a finished task. I think demand generation continues to rest on deepening consumer penetration and how we effectively leverage the expanded ecosystem. It is absolutely important to look at the aspect of the ecosystem that has expanded and, therefore, how we leverage it. I think the growth engine comes from there,” he said.

“This evolution, powered by enhanced technology applications, is an exciting journey. One that challenges our industry to deliver sharper, more purposeful solutions for brands,” he added.