Digital ads to surpass half of total ad market this year: report

The Indian digital advertisements market is poised to expand by 20% this year to $7.1 billion (about Rs59,200 crore), more than half of the overall advertising industry, an e4M-Dentsu report said.

The advertising industry grew by 6.3% annually to Rs1.01 trillion ($12 billion) last year, primarily driven by the general and assembly elections, which triggered a significant surge in ad spending,  the report said.

By the end of next year, the advertising industry is projected to grow at a compound annual rate (CAGR) of 6.87% to Rs1.15 trillion (about $14 billion).

The digital advertising sector, which grew 21% last year to Rs49,251 crore, is expected to grow at a CAGR of 19.09% to Rs69,856 crore ($8.4 billion) by 2026.

By the end of 2024, digital media accounted for the largest share of advertising spend at 49%, followed by television at 28% and print at 17%.

By 2026, digital media is projected to contribute 61% of India’s total advertising spend.

“Over the past year, digital has firmly established itself as the powerhouse of advertising, reshaping everything from media consumption to brand storytelling,” Exchange4media group founder Annurag Batra said in the report.

“Traditional channels like TV and print still hold their ground but the momentum is clearly shifting towards social media, online video and programmatic advertising—all fuelled by data-driven strategies and an ever-growing digital-first audience,” Batra said.

The telecom sector led the way, allocating 66% of its media budget to digital, with e-commerce, pharmaceuticals, and packaged consumer goods segments following closely behind.

Social media and online video led digital media spending, with social media contributing 29% (Rs14,480 crore) and online video close behind at 28% (Rs13,756 crore). Ad spends on e-retail platforms contributed to 22.93% of all digital media spends.

The FMCG and e-commerce sectors are the largest contributors to India’s digital media industry, the report said.

Within digital media, packaged consumer goods firms direct 44% of budget to online video, while e-commerce prioritizes paid search (39%) and social media (31%).

“The rise of hybrid experiences is redefining how we connect in physical and digital spaces. And consumers are no longer passive participants,” Harsha Razdan, chief executive officer for South Asia at Dentsu, said.

“Even in a world powered by algorithms and automation, the human element remains irreplaceable. The best ideas – the ones that truly transform industries – don’t emerge from data alone. They come from a deep understanding of people: their hopes, fears, and desires,” Razdan said, adding: “This is what makes the digital world so powerful.”