dentsu-e4m report: Indian advertising industry to grow at CAGR of 7.4% by 2027

The most-anticipated dentsu - e4m Digital Advertising Report 2026 was unveiled today, February 2 in Mumbai in the presence of dignitaries and industry heads from the advertising, marketing and media world. According to the report, the India’s advertising industry is expected to touch Rs 1,30,416 crore by end of 2026 and is expected to reach Rs 1,40,001 crore by 2027 at a CAGR (Compound annual growth rate) of 7.41%, after closing 2025 at Rs 1,21,339 crore.

The 10th edition of the report focuses on the forces that shape the next decade of Indian media. With the theme “Next 10: Forces Shaping the Next Decade of Indian Media,” the report examines the shifts redefining how India creates, consumes, and connects. The 2026 outlook is defined by expanding 5G access, maturing adtech capabilities, the advent of commerce-linked ad formats through UPI 2.0, and the mainstreaming of AI-enabled media optimisation.

The dentsu-e4m Digital Advertising Report 2026 was unveiled by Harsha Razdan, CEO - South Asia, dentsu; Abheek Biswas, VP – Consumer Insights - dentsu India; Dr Annurag Batra, Chairman and Editor-in-Chief, BW Businessworld and Founder, exchange4media; Nawal Ahuja, Co-Founder, exchange4media; Priyanka Khaneja Gandhi, Head, Ads Marketing and Creative Solutions, Amazon Ads India; Narayan Devanathan, President & Chief Strategy Officer, South Asia, dentsu; Hemant Kshirsagar, Chief Business Officer, Financial Services & Fintech, CXM, dentsu India; Navin Dhananjaya, Global CXM lead, Dentsu Global Services and others leaders.

“Digital media remains the industry’s primary growth engine, rising 19% in 2025 to reach Rs 71,621 crore and projected to grow at a CAGR of 17%, touching Rs 98,034 crore by 2027, which is equivalent to 70% of total advertising spends. Social and online video dominate this mix, while retail media is emerging as a major disruptor, with e-retail ad spends surging 55.86% in 2025 to Rs 17,601 crore”, the report stated.

The market is increasingly shaped by stronger domestic demand, deeper participation in digital commerce, and policy-led accelerators such as MSME digitalisation and the Make in India initiative. Traditional media retains scale, yet its share continues to decline as audiences and brands shift toward more measurable, digital-first environments.

Digital media - The primary growth engine

Digital media now contributes Rs 71,621 crore, commanding a dominant 59% share of the Indian advertising Industry. This milestone marks a structural shift in how brands engage audiences, reflecting both scale and sophistication in India’s digital ecosystem.

As per the report, digital media will remain India’s top ad channel, backed by policy and infrastructure. DPI, UPI and ONDC growth along with MSME digitalisation and broadband programmes, are deepening participation and enabling more measurable ad journeys. These forces are projected to sustain a 18.6% growth rate through 2026, taking digital media to Rs 84,977 crore by year-end.

The surge is driven by mobile-first use, short-form video, creator-led commerce, and AI-led adtech improving targeting and attribution. Regional content, performance marketing, and embedded digital payments are further expanding digital’s influence across sectors.

Looking ahead, digital media is expected to grow at a CAGR of 17%, reaching Rs 98,034 crore by 2027, and contributing 70% of total Indian advertising spends, marking a definitive shift to a digital-first communication economy.

Click here to download the dentsu-e4m Digital Advertising Report 2026

Growth across verticals

Television remains the largest traditional medium with a 21% share (Rs 25,964 crore), sustaining its relevance through live sports, high-impact entertainment and regional programming. Print follows with 14% (₹16,594 crore), continuing to deliver trust-led visibility in key markets and categories.

The industry’s media mix between digital and traditional media has transformed dramatically from 12:88 in 2016 to 59:41 today, signalling a systemic and long-term rebalancing of advertising strategies and priorities. 

Across verticals, FMCG, e-commerce, telecom and BFSI lead total and digital advertising spends. Digital-first sectors now concentrate heavily on video, social and search, while categories such as real estate and consumer durables maintain a stronger presence on television. The industry is converging toward a more data-driven, automated and commerce-integrated advertising ecosystem.

Now and Beyond

The next decade will redefine how media, technology, culture and commerce converge, creating a more immersive, adaptive and values-driven landscape. Retail media will become a core advertising pillar, enabling full-funnel storytelling powered by behavioural insight. Attention will increasingly guide measurement, while cultural influence shapes long-term relevance.

India’s creative economy will expand through women-led, regional and micro-community voices, reshaping narratives and elevating local culture globally. Purpose, transparency and emotional wellbeing will steer brand expectations, as value bundles, hybrid experiences, AI-enabled personalisation and spatial interfaces create a future where media shifts from viewing to meaningful participation.

To get more insights on the 10th edition of dentsu - e4m Digital Advertising Report, click here to download.