With digital set to hit 70% ad spends, will influencer agencies pivot beyond commissions?

As digital advertising tightens its grip on India’s media mix and moves towards a projected 70 percent share of total ad spends by 2027, influencer marketing agencies are entering a phase of structural recalibration. While demand for creator-led campaigns remains strong, the surge in digital investments is exposing cracks in commission-driven agency models.

The dentsu-e4m Digital Advertising Report 2026 shows that India’s digital media industry grew 19 percent in 2024 to close 2025 at ₹71,621 crore, underlining digital’s dominance over traditional advertising channels.

Within digital, social media commands the largest share at 29 percent, valued at ₹21,057 crore, driven by high engagement, creator-led ecosystems and the rise of social commerce. Online video follows closely with a 28 percent share at ₹20,004 crore, fuelled by short-form video growth, OTT consumption and mobile-first viewing behaviour.

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

This sustained shift in media spends has kept influencer marketing demand buoyant. FMCG remains the largest digital advertiser, accounting for 32 percent of total spends or ₹23,243 crore, driven by high-frequency consumption and continuous digital engagement. E-commerce follows with a 22 percent share at ₹15,836 crore, recording the highest growth in 2025 at 56 percent, led by quick-commerce expansion and intensifying marketplace competition. Tourism, education and automotive also recorded strong growth, benefiting from renewed demand and digital-first service models.

Market power, payments and pressure on smaller players

Large agency networks continue to dictate market behaviour, industry executives say, leaving smaller players reluctant to invoke formal rules for fear of being shut out of future business. With a handful of agencies controlling a significant share of influencer marketing spends, pushing back on delayed payments often risks losing access to a large portion of the market altogether. As a result, the rules that operate on the ground are frequently shaped by dominant players rather than policy frameworks.

Persistent challenges including delayed payments, thin margins, GST ambiguity and lack of working capital support continue to disproportionately hurt smaller agencies, even as brand demand remains strong.

Several influencer marketing agencies in India have now crossed the ₹100 crore revenue mark, at the same time, some agencies have gone invisible, unable to withstand tightening margins and prolonged cash flow cycles.

Experts say the commission-led, campaign-by-campaign model is no longer viable, as creators evolve into full-fledged businesses with IP, products and long-term brand ambitions. Growth, they note, is increasingly tied to system-led operations, ownership of creator outputs and deeper brand partnerships, rather than deal volume.

Why the old agency model is breaking

Across the board, agency leaders agree that the traditional “commission-and-move-on” structure is no longer sustainable.

Ayush Guha, Business Head at Creator18 said, the agencies that remain transaction processors will be left managing barely a fraction of creator value. According to him, "creators are no longer just talent but independent brand entities building D2C products, IP-led content franchises and even financial services offerings. Agencies that fail to structurally align with this diversification risk stagnation, regardless of how fast the market grows."

This stress is already visible in growth benchmarks. Guha argued, that if an agency is not clocking 50 percent-plus annual growth today, the issue lies not with demand but with a broken business model. System-led agencies that own creator IP, production capabilities and consulting relationships are seeing 50–60 percent year-on-year growth, while those dependent on commissions are struggling to cross 30 percent.

Beyond strategy, operational realities are tightening the squeeze. Shudeep Majumdar, Co-founder and CEO of Zefmo, highlighted long-standing structural challenges, including GST ambiguity on creator payments, 60–90-day receivable cycles and the absence of working capital support that traditional media businesses enjoy.

These cash flow pressures, he said, disproportionately affect smaller agencies, limiting their ability to scale even when demand exists.

Jag Chima, Co-founder of IPLIX Media, echoed the concern, noting that while established agencies can plan around delayed payments by maintaining a float, newer players often cannot survive prolonged receivable cycles. Payment delays from large brands, he says, have directly led to shutdowns within the ecosystem, exposing how thin margins remain despite the industry’s perceived glamour.

Consolidation is inevitable, but not a threat

While over 6,000 influencer agencies currently operate in India, industry leaders believe consolidation will unfold through mergers and acquisitions rather than market wipeouts.

Guha pointed out, "global advertising networks such as Publicis, Dentsu and WPP are acquiring influencer agencies not to dominate the space, but because building creator trust and networks internally would take far longer than they can afford." This, he argued, validates independent agencies rather than threatening them.

Viraj Sheth, CEO and Co-Founder of Monk Entertainment, added, "the past decade has shown how quickly agencies can rise and fall when built on thin margins and transactional relationships. According to him, future growth will be driven by deeper brand partnerships, stronger internal talent and consistent delivery of outcomes, not deal volume."

Atin Sharma, Founder and CEO of Aer Media, claimed, "the next phase of competition will be defined by systems and communities rather than influencer access. With brands demanding higher compliance, ROI and scale, he points to the rise of large-format micro and nano influencer campaigns involving tens of thousands of posts. Agencies capable of managing these programmes through performance-linked models and community-led strategies are increasingly pulling ahead."

Shouger Merchant Doshi, Founder and CEO of Rainmaker, who works on influencer marketing, reinforces this shift, "influencer marketing is no longer a standalone vertical but the backbone of modern brand building." For her, agencies that will win in 2026 are those that think beyond campaigns, move fast, stay authentic and compete with legacy networks on measurable impact rather than size.

Chtrbox shows how the model is evolving

Chtrbox offers a clear example of how agencies are restructuring to survive and scale. Last year, the influencer marketing platform became the first company in its category to go public in India, listing on the BSE SME platform after an IPO that was oversubscribed 52 times. The company raised over ₹4,286 lakh, signalling investor confidence in creator economy infrastructure rather than pure talent management.

For the half year ended September 30, 2025, Chtrbox reported revenue from operations of ₹3,598.49 lakh, a 33.4 percent year-on-year increase, while profit after tax rose to ₹470.04 lakh. Founder, CEO and Managing Director Raj Mishra attributed the growth to a platform-led model and deeper client trust, positioning Chtrbox as part of India’s expanding digital-first marketing ecosystem rather than a conventional influencer agency.

The company is now exporting this model globally, announcing expansion into the Middle East with Dubai as its regional hub. The move reflects a broader ambition to build cross-border creator economy infrastructure connecting India with high-growth markets. Mishra, who previously served as Country Head of TikTok India, is personally leading the expansion, focusing on creator networks, platform partnerships and strategic investments.

According to Mishra, the real opportunity lies in connecting creator ecosystems across geographies rather than executing isolated campaigns. By positioning itself as a bridge between markets, Chtrbox is betting on long-term ecosystem ownership over short-term commissions, a strategy that mirrors the broader structural shift reshaping India’s influencer marketing industry.

With digital set to dominate India’s advertising spends over the next few years, the pressure on influencer agencies to professionalise operations is only expected to intensify. As brands demand greater accountability, compliance and return on investment, consolidation within the sector appears inevitable, favouring agencies that can combine creator relationships with strong infrastructure, financial resilience and long-term brand partnerships.