Online video to capture 29% share of digital ad spend by 2026: dentsu-e4m report

According to dentsu-e4m Digital Advertising Report 2026, the Indian digital media industry grew 19% in 2024, closing 2025 at ₹71,621 crore, reinforcing digital as the largest advertising medium in the country. Digital is expected to contribute nearly 70% of total advertising spends by 2027, signalling a decisive shift away from traditional media.

Social media currently commands the largest share of digital ad spends at 29%, valued at ₹21,057 crore, driven by high engagement levels, creator-led ecosystems and the rise of social commerce. Online video follows closely with a 28% share at ₹20,004 crore, supported by rapid growth in short-form video, OTT consumption and mobile-first viewing.

Paid search accounts for 23% of digital spends at ₹16,581 crore, reflecting its continued relevance for intent-led and conversion-focused campaigns, while display advertising contributes 16%, largely driven by retargeting and reach-based objectives.

As per the report, online video is projected to grow 22.3% to reach a 29% share by the end of 2026, while social media is expected to grow 18.77% and maintain a similar share. By 2027, online video is expected to overtake social media, indicating a convergence of content consumption and social interaction across platforms.

FMCG remains the largest digital advertiser, accounting for 32% of total spends or ₹23,243 crore, driven by high-frequency consumption and sustained digital engagement. E-commerce follows with a 22% share at ₹15,836 crore and recorded the highest growth in 2025 at 56%, fuelled by quick-commerce expansion and intensified marketplace competition.

Tourism, education and automotive also recorded strong growth, benefiting from renewed demand and digital-first service models. The report attributes rising sectoral spends to increased mobile usage, short-form video adoption and performance-led marketing strategies, supported by government-led digital infrastructure such as UPI, ONDC, broadband expansion and MSME digitalisation.

Programmatic media buying continued to gain ground in 2025, accounting for 42% of total digital ad spends or ₹30,081 crore, up 19% year-on-year. The report said increased reliance on first-party data, AI-led optimisation and retail media networks is accelerating adoption. Programmatic buying is expected to grow at a CAGR of 18.77% to reach ₹42,435 crore by 2027, contributing 43% of total digital spends.