Rs 70,000 crore by 2026: What’s driving India’s digital ad growth?

The Indian digital advertising industry is witnessing remarkable year-on-year growth as brands increasingly shift focus to cater to mobile-first consumers. This surge is largely driven by rapid advancements in artificial intelligence (AI), data analytics, and programmatic advertising, reshaping how brands engage with audiences.

According to the latest dentsu-e4m report, India's digital ad market is projected to reach ?59,200 crore by the end of 2025, growing at an impressive 20.2% year-on-year. The upward trajectory is expected to continue, with digital media forecasted to account for over 61% of India's total advertising spend by 2026, growing at a compounded annual growth rate (CAGR) of 19.09%, reaching ?69,856 crore.

Continued Momentum

While these figures indicate strong momentum, industry leaders believe this growth will only accelerate.

Harsha Razdan, CEO-South Asia, dentsu, said, "I anticipate even greater growth. Let's see how the economy unfolds this year. Digital is expanding rapidly, and I see no reason for it to slow down."

Abheek Biswas, AVP-Consumer Insights, dentsu, emphasized the industry's long-term potential and stated, "The dentsu-e4m report projects that India's advertising sector will grow at a CAGR of 6.87%, reaching ?1,15,000 crore by the end of 2026. This expansion will be primarily driven by digital advertising, solidifying its role as the future of the industry."

Key drivers

The shift towards digital is largely attributed to evolving consumer behaviour, with audiences increasingly engaging with content through digital platforms.

Amit Pratihari, Managing Director at De Beers Group, shared, "Digital marketing continues to dominate the media landscape, reflecting how consumers interact with content—primarily online and often through a single device. As consumer habits shift, digital marketing spend will naturally keep pace with this trend."

Experts also point to the 2025 budget as a key driver of digital advertising’s expansion.

Mander Natekar, Co-founder & CEO at NeuralGarage, highlighted the significant boost it has provided to the industry.

"While digital advertising is a subset of the larger ecosystem, its impact is particularly pronounced due to India's young and digitally engaged consumer base. A significant portion of ad spending will continue shifting toward digital platforms,” he said.

The trend is reflected in industry reports, which indicate a shift from single-digit to double-digit growth rates in advertising, with digital leading the charge.

Amit Wadhwa, CEO, dentsu, further stated, "It’s encouraging to see innovations like PTT (Programmatic Transaction Technology) and other emerging trends gaining traction. 2025 looks like a promising year for the industry."

Digital Ad-Tech and the Future of Advertising

As digital ad-tech evolves, experts anticipate an even larger share of total ad spending to be allocated to digital platforms in the coming years.

Anita Kotwani, CEO-Media at dentsu said, "Over the next four to five years, digital could account for around 70% of total ad spending."

Shripad Kulkarni also seconded the thought, "Digital is expected to grow by at least 20–25% annually over the next three years, driven by multiple industry shifts, primarily the advancements in AI and the rise of AI-powered agents."

Akhil Almeida, Head of Marketing at Bandhan Life, attributed digital advertising’s rise to its ability to establish direct consumer connections.

"Screens have become the primary medium for consuming information, learning, and decision-making. The link between digital engagement and industry growth suggests that digital marketing will continue its upward trajectory for the foreseeable future,” he added.

The surge in digital adoption has also been fuelled by its flexibility in accommodating diverse media formats.

Shikher Choudhary, Cognitive Neuroscientist & Director at Neurons, explained, "The significant boom in digital advertising is driven by its ease of adoption and ability to integrate various brand strategies and media formats seamlessly."

Emerging sectors such as quick commerce are also accelerating this trend.

Kartik Mehta, Chief Business Officer - Growth Markets at Channel Factory, said, "Traditionally, CPG (Consumer Packaged Goods) brands have led advertising growth. However, quick commerce companies, with their aggressive digital-first approach, are now spearheading the shift."

Can Digital Overtake Traditional Advertising?

Despite conversations surrounding digital media’s rise, experts agree that traditional media still plays a crucial role in India’s advertising landscape.

The dentsu-e4m report further stated that while generative AI, programmatic ads, and automation are streamlining advertising, traditional media such as TV, radio, and print are also regaining prominence.

Brands are increasingly blending digital strategies with conventional methods, adopting a "phygital" (physical + digital) approach to enhance customer experience.

Subarna Nandy, Chief Manager at Axis Max Life Insurance stated, "While digital is undoubtedly the future, a large segment of India still relies on traditional media—whether newspapers, TV, cinema, or radio. These platforms remain integral to daily life, ensuring that advertising continues to flow across them alongside digital channels."

Choudhary echoed this sentiment and concluded, "Print and TV still hold a unique place in consumers’ minds. These channels cater to specific motivations that digital may not fully replicate—at least not yet."