Our AdEx-GDP ratio less than US & China, but that’s opportunity: Prasanth Kumar, WPP Media

India’s advertising intensity remains well below that of mature economies, but the gap represents structural upside, not underperformance, said Prasanth Kumar, CEO, South Asia, WPP Media. Kumar was responding to a question from e4m about the wide gap between India and developed economics when it comes to AdEx-to-GDP ratio.

“India’s AdEx-to-GDP ratio is lower compared to developed economies. But that’s the opportunity,” Kumar said while speaking to e4m on Tuesday at the launch of WPP Media’s latest This Year Next Year (TYNY) forecast in Mumbai. 

Kumar attributed the existing gap to the structural composition of India’s economy. “Large contributors to GDP—manufacturing, agriculture, pharma, mining, IT services—do not proportionately contribute to advertising,” he noted. In contrast, developed markets have a higher share of consumer-facing and technology-driven sectors that naturally fuel greater advertising investment.

Currently, advertising expenditure in the UK stands at roughly 1.5% of GDP, the US at 1.4%, and China at 1.1%. India, by contrast, is at approximately 0.5%—less than half of China’s intensity and nearly a third of the UK’s. However, it has grown over the period of time, WPP data shows. The AdEx-to-GDP ratio in 2020 was merely 0.3%. 

WPP projects that once India’s per capita income reaches $4,000 annually, from the current $2,800, advertising intensity could expand to around 1.0% of GDP, effectively doubling from current levels.

“The ratio has grown over time, and it will continue to grow,” he said. “The real opportunity lies in expanding demand—bringing more categories and more businesses into the advertising ecosystem.” 

He emphasised that digital transformation is already reshaping the trajectory. With digital accounting for nearly 68% of total ad spend, India has leapfrogged into a performance-led ecosystem powered by commerce integration, AI and data-driven measurement.

“India today stands at a pivotal crossroads where artificial intelligence, commerce and privacy converge,” Kumar said. “Advancements in AI and shifts in consumer behaviour are redefining how we connect with audiences.”

While global volatility—geopolitical tensions, inflation and cautious investor sentiment—continues to influence brand spending, Kumar maintained that India’s long-term fundamentals remain strong.

If India’s economic expansion continues alongside digital formalisation and category diversification, the AdEx-to-GDP ratio could see structural acceleration over the next decade—transforming what is currently viewed as a gap into a significant growth runway, he noted.