Will tier-2 cities redefine where India's best ads are made?

As 2025 draws to a close, one of the year's quieter revolutions has been unfolding away from the glare of metro spotlights. Production costs in metros have surged by 34% since 2022, with talent acquisition costs up by 28% in the same period, according to the latest Pitch Madison report. Meanwhile, high-speed internet penetration in tier-2 cities has crossed 67%, up from just 41% three years ago, as per the Telecom Regulatory Authority of India's 2024 data. This infrastructure boom, combined with the widespread adoption of remote workflows, has created the conditions for a fundamental shift in where creative work happens in India.

For decades, India's advertising industry has been a tale of the big three: Mumbai, Delhi, and Bangalore. The big ideas, the big budgets, and the big names all congregated in these metros, feeding off each other's energy and infrastructure. But this year has brought a subtle yet significant shift in this geography. Tier-2 cities are no longer content being the back office of Indian creativity. They're staking their claim as legitimate production centres, talent pools, and increasingly, as places where ideas themselves are born.

The question isn't whether this shift is happening anymore. It's about what it means for the quality, character, and future power structure of Indian advertising. Is this decentralisation a cost-cutting exercise dressed up as democratisation? Or is it a genuine reimagining of where creativity can flourish?

The cost versus culture debate

The most obvious driver of this shift is economics. Metro rents, talent costs, and production overheads have made the traditional agency model increasingly unsustainable, particularly for mid-sized brands operating on leaner budgets. Tier-2 cities offer immediate relief on all these fronts. A production studio in Jaipur or Kochi operates at 40 - 50% lower overhead than its Mumbai equivalent, and that differential is hard to ignore when margins are being squeezed across the board.

But is cost efficiency the whole story, or just the surface explanation?

Manish Solanki, COO and Co-Founder at TheSmallBigIdea, a content and social media agency with a strong digital footprint, frames the shift as an ecosystem expansion rather than a disruption. "Three things are driving this shift: evolving work models, expanded talent access, and strategic efficiency," he explains. For Solanki, the maturation of remote collaboration tools has been pivotal. "Remote collaboration tools have matured to the point where creative excellence isn't tied to physical proximity. This has opened up access to strong creative talent that exists across India, professionals who are digitally fluent, culturally grounded, and bring fresh perspectives shaped by diverse regional contexts."

Prantik Dutta, EVP of Studio and Production at Cheil India, one of the country's leading integrated marketing agencies, remains sceptical about whether the shift represents anything more fundamental. "Is that actually happening or just a perception?" he questions. "However, if it is true, then, as per my thinking, this is primarily for cost saving." For Dutta, the creative advantage argument doesn't hold up when you examine what it takes to produce genuinely great work. "I am sure there are talents and creative thinkers in Tier-2 cities, but are they into the right discipline of production settlements?" he asks. "An aspirant with good creative skills looks forward to working in a big creative environment in the metros."

His concern cuts to the heart of a debate that's been simmering in agency corridors throughout 2025. Can tier-2 cities offer more than just cheaper production? Or are they destined to remain the budget option for brands unwilling to pay metro premiums? Dutta's position is that while cost efficiency might justify the shift operationally, it doesn't necessarily translate into creative excellence. The infrastructure, mentorship, and ecosystem that metros provide remain difficult to replicate, regardless of how good the internet connection is.

This scepticism isn't without merit. The advertising industry has always been built on proximity, on the informal knowledge transfer that happens when senior and junior creatives share the same workspace, on the competitive energy that comes from being surrounded by other talented people chasing the same awards and accolades. When you decentralise that model, you risk losing the intangible elements that make great agencies great. As Dutta points out, "The guidance and supervision of senior members will be missing," and that absence has consequences for how talent develops and how standards are maintained.

Yet, there's a compelling counter-argument emerging from those who've embraced the shift. Mitchelle Jansen, Senior Vice President at White Rivers Media, a production and content studio working across formats, argues that cost is just the entry point, not the endgame. "Cost efficiency is the entry point, not the reason people stay," she says. "The real advantage is cultural proximity - creators in Tier-2 cities understand local language, humour, aspiration, and contradiction instinctively. That often leads to work that feels less polished but more honest, which audiences respond to. For many brands chasing relevance, that lived-in authenticity is more valuable than glossy execution."

This cultural proximity argument has gained traction, especially as brands have discovered that Bharat doesn't just consume differently from India; it creates differently too. The rise of regional content on OTT platforms, the explosion of vernacular influencers, and the success of hyper-local brand campaigns have all validated the idea that proximity to the audience can be a creative advantage, not just a logistical convenience. Jansen believes that some of the sharpest insights are now coming from smaller cities where trends are lived before they're labelled, where cultural shifts happen organically rather than being manufactured in brainstorming rooms.

The tension between these two perspectives sits at the heart of the tier-2 debate. It's not a simple either-or proposition. Both Dutta's concerns about quality and Jansen's optimism about cultural authenticity contain uncomfortable truths about where Indian advertising finds itself at the end of this year.

The quality and infrastructure challenge
One of the biggest changes enabling this shift has been technological. Cloud-based workflows, remote collaboration tools, and AI-assisted production have made location increasingly irrelevant for many aspects of creative work. A designer in Indore can access the same tools, the same asset libraries, and the same client briefs as someone in Bandra. A film editor in Chandigarh can work on the same timeline software as their counterpart in Bangalore. The technology gap that once made metros indispensable has largely evaporated.

But technology is only part of the infrastructure equation. What about the ecosystem around it? Dutta raises critical concerns about what gets lost in decentralisation. Beyond the absence of senior supervision, he notes that "the infrastructure, tech support, AI tool, etc. will surely be on the lower side, which will affect the quality." Perhaps most significantly, he argues that the target audience's understanding might become more narrowly defined, losing the "open and 360 degree idea" that comes from diverse metropolitan exposure.

There's also the question of speed versus depth. "As cost efficiency is a key factor of decentralisation, the time and reward to have a better creative production will be restricted," he explains. In an era where content volumes have exploded and turnaround times have compressed, this trade-off between velocity and craft has become increasingly common, regardless of geography.

Yet Jansen offers a counter-narrative. She believes decentralisation actually forces better discipline. "When ideas come from more places, you get more perspectives and fewer clichés," she argues. "Quality improves when agencies stop mistaking uniformity for consistency. Decentralisation forces better curation and sharper creative direction, but the upside is work that feels fresher and more reflective of real India." In her view, the challenge isn't maintaining quality despite decentralisation; it's about building systems that can harness diverse inputs without losing coherence.

Solanki doesn't see tier-2 cities as replacements but as complements. "The real driver isn't about replacing metros, it's about expanding the creative ecosystem. Tier-2 cities complement metro agencies by adding depth, diversity, and new creative voices to the industry." This framing acknowledges that both models have value and that the industry's evolution doesn't require choosing one over the other.

On the question of whether tier-2 cities offer a genuine creative advantage beyond cost savings, Solanki is emphatic. "Both, but the creative advantage is real and practical," he says. "Tier-2 cities combine strong aspirational energy with highly eager, fast-learning talent that's quick to adopt new tools, including AI. With fewer legacy constraints, this talent delivers authentic, high-engagement work. Importantly, they do high-quality work at the right price, making Tier-2 cities not just cost-efficient, but smart, scalable creative hubs." This notion of fewer legacy constraints is particularly relevant when considering how quickly the advertising landscape has transformed in recent years, with AI tools, short-form video, and creator-led content reshaping what creative production even means.

Tushar Khakhar, First Executive at AGENCY09, a digitally-led creative agency working with D2C and tech brands, adds another layer to this quality debate, pointing to the distinct creative sensibility emerging from tier-2 hubs. "Cost efficiency might be the entry point, but what's proving more valuable is the kind of creative energy emerging from these regions," he explains. "There's a distinct local perspective, deep cultural awareness, and a different rhythm to problem-solving that brings freshness to the work, especially when it comes to digital content creation. Many creators from Tier-2 cities are digital-first by default, often self-taught, and driven by experimentation rather than legacy thinking." This digital-native quality is particularly relevant in an era where brands are increasingly prioritising performance-driven content over traditional brand-building exercises.

Khakhar also identifies remote workflows as the primary catalyst for making tier-2 viability possible. "The biggest trigger has been the widespread adoption of remote workflows," he says. "Once teams could collaborate from anywhere, the need to cluster talent in expensive metros started to fade. At the same time, the cost of operations in cities like Mumbai and Delhi has become unsustainable for many growing businesses." For him, tier-2 cities offer something beyond just financial relief. "Tier-2 cities offer better work-life balance and lower overheads, making them ideal for long-term creative investment. What's changed is the confidence that high-quality creative output can be built outside of traditional centres."

The talent transformation
The type of talent emerging from tier-2 cities is noticeably different from the traditional metro-bred creative. According to industry insiders, these are professionals who've grown up with digital tools, who consume global content but understand local contexts deeply, and who often come with entrepreneurial mindsets shaped by having to create opportunities rather than join established structures.

Dutta describes them candidly as "average skilful resources with more speed, which may be a requirement to produce today's content." There's a pragmatic assessment here; these aren't necessarily the auteurs or the award-chasers; they're the workhorses of the content economy, optimised for volume and velocity rather than prestige and perfection. In a market where brands need 50 pieces of content a month rather than five perfect campaigns a year, this skillset has found genuine demand. It's an honest appraisal that acknowledges the reality of what most advertising work has become, a high-volume content engine rather than a craft atelier.

But Jansen sees something more transformative happening. "Talent no longer has to migrate to be visible; high-speed internet, creator platforms, and remote workflows have flattened the playing field," she observes. "Brands are also realising that culture doesn't only live in metros; some of the sharpest insights are coming from smaller cities where trends are lived before they're labelled."

This visibility without migration is creating a new kind of creative professional, one who's choosing to stay rooted in their hometown while building national or even international client bases. These aren't people who couldn't make it to Mumbai; they're people who've decided Mumbai isn't necessary anymore. That's a fundamentally different proposition and one that could reshape talent flows over the next decade.

The creator economy has played a significant role here. Many of the most successful content creators on YouTube, Instagram, and other platforms come from non-metro backgrounds. They've built audiences of millions without ever stepping into an agency office, and increasingly, agencies are either partnering with them or hiring them. This has legitimised tier-2 talent in ways that traditional career paths never could. When a creator from Lucknow has 2 million engaged followers, their proximity to Bandra becomes irrelevant.

The client trust barrier
Beyond infrastructure and talent lies perhaps the most stubborn obstacle to full decentralisation: client confidence. For all the technological enablement and emerging talent, many brands still harbour doubts about entrusting flagship campaigns to non-metro teams. This isn't just about creative capability; it's about perceived risk, established relationships, and the comfort of proximity.

Khakhar acknowledges this reality candidly. "There's still a strong belief among some clients that proximity equals control, especially for high-stakes campaigns," he observes. "Being around the corner helps with quick turnarounds and face-to-face collaboration, which many still value. But that mindset is evolving. As more successful campaigns emerge from decentralised teams, confidence is growing." This gradual shift in client perception might be the slowest-moving piece of the decentralisation puzzle, but it's also the most critical. Without client buy-in, tier-2 hubs remain relegated to execution work rather than strategic creative leadership.

The trust deficit manifests in practical ways. Large pitches still overwhelmingly favour metro agencies. High-budget shoots still default to established production houses in Mumbai or Delhi. Crisis management and rapid-response creative still gravitate toward teams that can be in the client's office within the hour. These patterns are changing, but they're changing incrementally rather than dramatically. What's accelerating the shift, however, is proof of concept. When a tier-2 team delivers a campaign that performs exceptionally well, when a non-metro production house executes flawlessly under pressure, when a remote creative team demonstrates they can iterate as fast as their in-office counterparts, it chips away at the presumption that metros have a monopoly on excellence.

What's at stake for the power structure
Perhaps the most consequential aspect of this shift isn't economic or even creative, it's structural. For decades, India's advertising power structure has been remarkably concentrated. A handful of holding company networks, headquartered in Mumbai and Gurgaon, controlled the vast majority of big-budget work. Creative reputations were made at a small cluster of hot shops. Awards were won by the same names year after year. This concentration created excellence at the top but also created barriers to entry and blind spots in perspective.

Decentralisation threatens this arrangement. When talent doesn't need to be in metros to access opportunities, when production can happen anywhere, when cultural insights come from lived experience rather than research reports, the traditional gatekeepers lose some of their power. Jansen is unequivocal about this. "Yes, and it already is," she says when asked if the shift could permanently reshape India's creative power structure. "Creative power is moving from being location-led to idea-led. Metros will remain important, but they won't be the sole gatekeepers anymore. The future belongs to networks of talent, not pin codes."

Solanki offers a more nuanced view of this structural evolution. "It's less about reshaping and more about expanding what creative excellence looks like in India," he observes. He's careful to acknowledge that metros retain irreplaceable advantages. "Metros will always be vital hubs; they have deep institutional knowledge, senior talent density, and client proximity that's irreplaceable. But Tier-2 cities are adding new dimensions to the industry: vernacular storytelling rooted in lived experience, regional cultural authenticity, and creative approaches informed by markets beyond the top six cities."

For Solanki, the future isn't zero-sum. "It's about a more distributed, inclusive creative ecosystem where great ideas can come from anywhere. A campaign strategy might be developed in Mumbai, executed by a team in Chandigarh, with cultural insights from Kochi, all working seamlessly."

This collaborative model might be the most realistic outcome of the decentralisation trend. Rather than tier-2 cities displacing metros, they're creating a more distributed network where different nodes contribute different strengths. As Solanki puts it, "The next wave of iconic Indian work won't come from Tier-2 instead of metros. It'll come from collaboration between them."

This democratisation, if it truly takes hold, would represent the most significant structural change in Indian advertising since liberalisation. It would mean more diverse voices, more regional perspectives, and potentially more culturally grounded work. It would also mean more competition, more fragmentation, and possibly a dilution of the craft standards that metros have historically maintained.

Dutta's concerns about quality and mentorship are really concerns about what happens when you distribute expertise too thinly. Can you maintain excellence when you don't have senior leaders physically present? Can you develop great creatives without the intense apprenticeship model that metros enable? Can you create iconic work when you're optimising for efficiency? These aren't rhetorical questions; they're practical challenges that will determine whether decentralisation elevates Indian creativity or just makes it cheaper and faster.

The hybrid future
What's emerging at the end of 2025 isn't a complete abandonment of metros or a wholesale embrace of tier-2 cities. It's a more nuanced hybrid model. Large agencies are maintaining their metro headquarters for client servicing, strategic planning, and high-profile pitches, while spinning up satellite studios and production hubs in tier-2 cities for execution and specialised work. Independent production houses are choosing to set up in places like Pune, Ahmedabad, or Thiruvananthapuram, betting that they can attract talent who want big-city opportunities without big-city compromises.

Brands themselves are becoming more comfortable with distributed creative teams. A campaign might be conceptualised in Mumbai, storyboarded in Jaipur, shot in Kerala, edited in Chandigarh, and finished in Bangalore. This modular approach to production allows for optimisation at each stage, tapping into specific local advantages, whether that's cost, talent, locations, or cultural insight.

The real test will come not in the year ahead but in the years that follow. Will tier-2 hubs develop their own creative cultures and identities, or will they remain satellites of metro agencies? Will the talent that stays in these cities create work that wins at Cannes and Campaign, or will awards continue to go to metro shops? Will clients eventually see tier-2 agencies as equal alternatives, or will they remain the budget option for less critical work?

What's undeniable is that the conversation has shifted. Five years ago, the idea of tier-2 cities as creative hubs would have been dismissed as naive. Today, it's a genuine possibility being explored by agencies, embraced by talent, and funded by brands. The infrastructure is there, the talent is emerging, and the economic pressure is real. Whether this becomes a fundamental restructuring of Indian advertising or just a temporary adjustment to cost pressures will depend on whether these new hubs can deliver not just efficiency but genuine creative excellence.

As Jansen frames it, creative power is moving from being location-led to idea-led. If that's true, then India's creative geography is about to get a lot more interesting. The metros aren't going anywhere, but they're no longer the only game in town. And for an industry that's always claimed to value ideas above all else, that's a proposition worth taking seriously as we head into 2026.