Leaner, Smarter, ROI-first: How agencies are adapting as Indian brands trim ad budgets

Early data indicates that India’s ad market is facing early challenges amid shifting advertiser budgets. Television advertising volumes dropped by 10% in the first nine months of 2025 compared to the same period a year ago, according to TAM AdEx data - a decline that industry executives attribute in large part to major fast-moving consumer goods (FMCG) companies tightening their ad wallets.

That pullback isn’t limited to just TV airtime. BARC data shows that TV ad volumes from India’s top 10 advertisers contracted by 14.6% year-on-year, indicating cautious macro-spend across categories like FMCG, telecom, auto and e-commerce.

At the same time, some FMCG brands report shrinking A&P (advertising & promotions) budgets. In Q1 FY26, HUL cut its A&P spend by 1.4% to ₹1,656 crore, while companies like Dabur and Emami also reduced their ad outlays. Yet not all companies are retreating. Marico, for instance, aggressively raised its spend by 25%, underscoring a more polarized, strategic reallocation of marketing dollars.

The data suggests a sharper narrative: rather than a universal slowdown, the market is experiencing a recalibration. Major brands, particularly in FMCG and household categories, are redeploying their ad budgets, prompting agencies to rethink how to deliver high-impact, measurable creative with far less margin for waste.

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Reinventing Creative Under Tighter Budgets

As major advertisers, notably FMCG, auto, e-commerce, and consumer durables, pull back on traditional media spends, agencies are pushing harder on the creativity front, treating budget reductions as design constraints rather than roadblocks. With smaller budgets, there is less room for inefficiency: every shot, every scene, every frame must “earn” its existence.

Ganesh Pareek, Executive Producer & Partner at First December Films, puts it plainly: “Budgets going down doesn’t bother us because we see the work itself as a precision exercise When every frame has to earn its place, when the waste is removed, scale doesn’t suffer at all, it just becomes invisible. The audience should never feel that the budget was small; they should only feel the craft.”

On the agency side, that creative rigor is equally pronounced. Krishna Iyer, Director of Marketing at MullenLowe Lintas Group, shares that the agency has deliberately shifted “from production-heavy executions to idea-heavy ones.” He argues that tight briefs and leaner production models force a return to fundamentals: “When creativity and utility join, expensive execution becomes irrelevant.”

This approach is being reinforced by the broader market context: while brands like HUL have dialled back TV spend, others such as Marico have increased their ad outlays. Such polarization is prompting agencies to build structures that allow fluid, high-impact creativity without unnecessary spend.

Leveraging Data and Targeting Models for Precision

In a climate where every rupee matters, agencies are leaning more heavily on programmatic advertising, AI-powered analytics, and audience-first strategies, not just for efficiency, but for pinpoint accuracy. Programmatic platforms like DV360, The Trade Desk, and Amazon DSP are becoming standard tools. At the same time, data insights on attention, play rate, repeat views, and incrementality are shaping not just media buys but creative decisions.

Bhushan Kadam, SVP at White Rivers Media, highlights how AI and data-driven insights are foundational now: “The use of AI and data-driven insights facilitates continuous refinement of campaigns to target the right audiences effectively while managing costs. Smart tools and targeted approaches help establish genuine connections with diverse audiences.”

Yet, not all in the industry believe that data should override artistic instinct. Pareek argues for balance: “I never see data or ROI as pressure; I see it as a vantage point. Good data absorbed at the right time simply improves the craft.” For Pareek, data shows where the emotional beats land (where people replay, where they pause), but storytelling and structure must come first.

The industry data supports this: given digital’s growing dominance, precision platforms are more valuable than ever. At the same time, despite the gains, some brands remain wary of putting all their eggs in digital, especially those still committed to mass-reach TV and out-of-home channels, so hybrid strategies continue to thrive.

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Restructuring Teams and Creative Collaborations

Cost constraints aren’t only changing what agencies create, but also how they build their teams. With shrinking budgets in traditional categories (like FMCG or real estate), agencies are moving away from bloated production hierarchies toward more agile, hybrid setups.

Iyer of MullenLowe Lintas describes the agency’s model as “ecosystem-first”: “By bringing the right specialists together around a unified strategic framework, this ‘ecosystem-first’ approach keeps us agile and transparent, while unlocking higher value for the brand in a cost-efficient manner.” Rather than owning every piece of the puzzle internally, agencies are orchestrators: combining repeatable in-house execution (social content, editing, optimization) with external creative partners (directors, boutique production houses) for high-leverage work.

Kadam adds that technology plays a major role in streamlining operations: “AI tools and workflow automation are central to how content is created and produced swiftly, eliminating the need for large teams.” This means smaller core teams can maintain quality while keeping overheads lean, aligning perfectly with clients who demand sharp creative that doesn’t cost a fortune.

Redefining ROI and Success in a Leaner Age

Today, advertising success is no longer just about reach. With limited budgets and mounting pressure for accountability, agencies and clients alike are redefining what return on ad spend (ROAS) really means. Traditional metrics like GRPs or reach are being supplanted by more nuanced indicators, attention, incrementality, emotional resonance, and fast-turn dashboards.

According to Iyer, “Uplift in consideration, efficiency in conversions, attention scores, or the ability of an idea to spark cultural momentum at minimal spend, all of these are now core. Our job is to make ROI real-time, simple and tangible, irrespective of campaign size.”

Pareek drives home a different kind of vision: “For us, success is when the audience feels nothing about the budget, only the story. ROI becomes a validation, not a restriction.” His emphasis is on emotional scale, if the craft feels big, the budget becomes irrelevant.

That’s not purely aspirational. Given that digital and programmatic tools allow minute-level feedback and rapid optimization, agencies can now build campaign feedback loops that reconcile long-term brand goals with near-instant performance data. For clients skeptical about spending less, such systems offer transparency and flexibility, ensuring that lean campaigns don’t mean lean impact.

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Implications For Brands and the Industry

The changing dynamics in Indian advertising suggest a few major take-aways for brands, agencies, and even publishers:

• Digital dominance is non-negotiable: With digital accounting for nearly half of all ad spends, and forecasted to drive most future growth, brands that pull back on digital risk falling behind. Crisil’s data shows that already, FMCG is allocating over 50% of its ad budget to digital.
• Creative discipline becomes the currency: Without large production budgets, the premium shifts to ideas, structure, and prep. Agencies that master modular, high-precision creativity can deliver work that punches above its financial weight.
• Team structures must adapt: In-house teams for efficient execution plus curated external talent for high-risk, high-reward creative is the optimal mix, allowing quality without bloating costs.
• Accountability is elevated: Real-time dashboards, incrementality studies, attention metrics, these are now standard, not optional. Clients increasingly demand clarity on what each campaign is doing, and agencies are building the architecture to deliver it.

In a year when many legacy advertisers are cutting back, the ad industry’s response is not retrenchment, it’s reinvention. The growth of digital, the rise of data-first creative, the reconfiguration of teams, and the recalibration of success metrics all point to a future where smarter, leaner campaigns deliver not just cost savings but better storytelling and sharper business logic.

As major categories like FMCG, real estate, auto, and D2C recalibrate their media strategies, agencies are proving they can do more with less, without compromising on craft or ROI. In this new era, creativity is not just surviving on a lean diet; it’s thriving.