Why CTV and retail media are the twin engines of ad growth in 2026

New Delhi: After several years of performance-heavy media planning, the industry has begun reassessing the long-term impact of narrow optimisation strategies. Brands have acknowledged that efficiency-led growth alone has limits, particularly as tightening privacy rules have weakened targeting and attribution models have lost precision.

“Performance and brand building must be balanced. You cannot ignore brand building. The obsession with last-click attribution and short-term ROAS has left many brands with eroded equity and rising acquisition costs. When privacy changes weaken targeting precision, brand salience becomes your strongest performance lever. The brands winning in 2026 will be those where performance feeds brand equity and brand equity reduces cost of acquisition over time. It’s not either-or; it’s a compounding system,” said Chetan Asher, Founder and CEO, Tonic Worldwide, capturing a decisive shift that is expected to shape India’s advertising landscape heading into 2026.

This recalibration has placed Connected TV (CTV) and retail media at the centre of the 2026 advertising conversation. Both formats are being viewed as capable of balancing measurable outcomes with sustained brand impact, making them central to how advertisers are planning for growth in a more complex media environment.

According to WPP Media’s This Year Next Year 2026 forecast, India’s advertising market is projected to grow by 9.7 per cent to Rs 2.0 trillion, supported by digital formats, commerce-linked channels and resilient consumer demand amid broader economic uncertainty. Rather than being driven by post-pandemic recovery, the expansion is anchored in structural shifts, with CTV and retail media emerging as the most significant contributors.

Retail media is projected to contribute close to 15 per cent of total advertising revenue in 2026, while CTV is expected to grow by around 22 per cent, pushing its share of total ad spend beyond 4 per cent. Together, the two formats are increasingly viewed as the industry’s primary growth engines.

Retail media shifts from performance tool to strategic growth layer

Retail media’s rise is underpinned by its direct connection to commerce and first-party data. Platforms such as Amazon and Flipkart have strengthened their positions as major advertising players, while quick-commerce platforms have rapidly scaled ad revenues as competition has intensified across categories.

WPP’s TYNY report identified retail media as the fastest-growing advertising channel in India, forecasting growth of 25 per cent in 2026, following strong expansion in 2025. The channel is no longer perceived solely as a lower-funnel performance lever, but as a strategic layer within the broader media mix.

Abhijit Kumar, Head of Retail Media, Criteo India, described this evolution clearly: “As we head into 2026, retail media is evolving from a performance-led channel into one of the most strategic growth engines in advertising. Compared to 2025, AdEx momentum is set to accelerate as brands move beyond incremental automation and lean into agentic AI to drive smarter acquisition, sharper measurement and full-funnel impact.”

He added, “Retail media is no longer about choosing between performance and brand-building; it is increasingly the connective layer that enables both, given its proximity to real purchase signals and high measurability.”

This dual role has made retail media particularly attractive in an environment where marketers are demanding accountability alongside scale. Categories such as FMCG within quick commerce, fashion and D2C are expected to lead investments, as brands seek measurable impact tied directly to consumer transactions.

Kumar noted that the next phase of growth would depend on “data quality, trust and interoperability”, adding that AI was transforming retail media into “a critical intelligence layer for marketers”.

Why CTV is on the rise despite measurement challenges

While retail media’s appeal rests on measurability, CTV’s momentum is being driven by changing content consumption patterns and advertiser demand for premium digital video environments. Streaming platforms continue to expand, drawing both audiences and ad budgets away from linear television.

WPP projected CTV growth of around 22 per cent in 2026, even as the industry continues to flag unresolved measurement challenges. Unlike more mature digital channels, CTV lacks fully standardised metrics across platforms and devices. Despite this, advertiser confidence continues to build.

Yasin Hamidani, Director, Media Care Brand Solutions, said, “Digital will continue gaining share, especially video, CTV and retail media.” He noted that this shift was influencing full-funnel planning, adding, “Expect more full-funnel planning, with upper-funnel video and CTV feeding search, commerce and retargeting, rather than performance channels operating in isolation.”

CTV’s ability to deliver high-attention, premium environments has offset concerns around fragmented measurement. Hamidani observed that “the biggest shift will be towards high-attention formats across channels”, reflecting advertisers’ growing focus on quality engagement rather than volume alone.

Media planning becomes firmly hybrid

The parallel rise of CTV and retail media reflects a broader shift towards hybrid media strategies. Rather than prioritising either brand-building or performance, advertisers are increasingly aiming to integrate the two.

Vaishal Dalal, Co-founder, Excellent Publicity, said the overall AdEx outlook for 2026 remained optimistic and was expected to build steadily on the momentum seen in 2025. He noted that growth was supported by stable consumer demand, deeper digital penetration and sustained investments from both legacy and digital-first advertisers.

Dalal said brands were expected to take a more balanced route in 2026, adopting “a hybrid approach, blending performance marketing with brand-building rather than favouring one over the other”.

Hamidani reinforced this view, stating, “2026 will be firmly hybrid.” He added, “Brands have realised that performance without brand-building hits a ceiling, while brand-only investments delay returns.”

This thinking aligned closely with Asher’s earlier warning that over-reliance on short-term attribution had eroded brand equity and driven up acquisition costs. In that context, CTV is increasingly positioned as a top-funnel driver of salience, while retail media anchors lower-funnel efficiency.

Growth story lies in categories and regions

Asher highlighted, “Categories like quick commerce, travel, finance and pharma will drive spends. FMCG will also see momentum.”

Dalal added, “Emerging sectors such as quick commerce, D2C brands, OTT platforms, gaming and food delivery are expected to contribute incremental ad investments.”

Regional strategies have also moved to the forefront. Dalal said localisation was no longer a tactical add-on but a core requirement for effectiveness. Hamidani agreed, stating, “Growth is increasingly coming from Tier II and III markets, where language, culture and context drive trust.”

Asher described regional trends as “the biggest unlock”, noting that “over 73 per cent of users consume content in regional languages, and local campaigns deliver two times higher engagement”. CTV and retail media, with their data-led targeting capabilities, are seen as well-suited to this regional and hyper-local expansion.

Challenges do not slow momentum

Despite strong growth expectations, industry leaders flagged persistent challenges. Dalal pointed to fragmentation, brand safety risks, ad fraud and the need for stronger cross-channel measurement frameworks. He also highlighted the importance of first-party data readiness as privacy changes reshape targeting and optimisation.

Hamidani said advertisers faced rising media costs, data reliability issues and attention fragmentation, warning that “fraud, signal loss and over-automation can distort performance if not managed carefully”.

Asher emphasised that the central challenge for marketers lay in “building first-party data infrastructure, managing measurement complexity, and treating brand-building as essential infrastructure rather than an optional expense”.

Hamidani summed up the year’s approach: “In 2026, disciplined planning will matter more than aggressive spending.”