Digital ad spends to soar on the back of OTT, e-retail

India's digital ad market is set to soar from ₹6,000 crore in 2016 to ₹69,856 crore by 2026, overtaking traditional media like TV and print.

When Ambika Sharma launched her digital agency Pulp Strategy 15 years ago India’s total digital advertising market was barely ₹3,000 crore. But she placed her bet on the medium, offering brands specialized services in MarTech, content, and digital transformation. “Our growth consistently outpaced that of the industry,” said Sharma. Russhabh Thakkar’s Frodoh World was launched much later in 2019 but like many smaller independent agencies, it, too, has benefited from the exponential rise in digital advertising expenditure, expanding its client list and dabbling in retail media and connected TV advertising.

Digital ad spends to soar on the back of OTT, e-retail

Dentsu and e4m’s Digital Advertising Report 2025 released on Monday, offers a glimpse of the sector’s leap. From ₹6,000 crore in 2016 to ₹69,856 crore expected in 2026 – is how digital ad spend is moving. Correspondingly, its share in overall advertising will jump to 61% in 2026 versus 12% in 2016. The medium will end 2025 with ₹59,200 crore in advertising.

The Dentsu e4m report analyses the segments within digital that are driving its growth leaving traditional media like television and print far behind. So, Google and Meta are not the only valued advertising platforms as retail media and over-the-top (OTT) video streaming platforms draw a big chunk of ad money.

Retail media includes e-commerce marketplaces like Amazon, Flipkart, Nykaa etc, quick commerce platforms like Blinkit and Zepto and social commerce sites like Meesho. Streaming platforms include all the ad-supported OTT services like Amazon MX Player and ad-based tiers on Jio Cinema, Disney Hotstar etc.

At present though social media -- comprising Instagram, Facebook, X (formerly Twitter) and LinkedIn etc. – comprises the largest platform for digital ads making ₹14,480 crore, the online videos market (YouTube and OTT streaming), a close second at ₹13,756 crore, is expected to grow faster.

It’s easy to see why. Streaming platforms now reach nearly 70% internet users in India, the report said. “Dedicated streaming services have longer and more premium video content,” said Abheek Biswas, AVP, Consumer Insights at Dentsu India. The engagement on social versus OTT is different. “Social media enables quick interactions, sharing, and community dialogue. Online video supports more immersive experiences like binge-watching or premium series,” he said.

Not surprisingly, online video is set to grow faster (23.24% CAGR) than social (20.22% CAGR), driven by OTT uptake and the popularity of long-form content. “Social media remains large but faces potential saturation and fierce competition,” Biswas said.

As OTT paid subscriptions plateau, platforms are introducing ad-supported or freemium tiers. The AVoD (Ad-based Video-on-demand) services attract large number of users looking for free, high-quality content and advertisers reach a broad, engaged audience who no longer sit behind paywalls, Biswas said. Unlike user-generated content platforms, OTT services provide controlled, premium contexts for brand presence, the report added.

The ad spends on e-retail platforms (e-comm and q-comm) are on a roll too, growing at 23.4% reaching ₹11,293 crore in 2024. The advantage of the medium is that “retailers have robust shopper data (past purchases, browsing habits) for targeted, personalised ads. This level of precision often outperforms broader social media targeting,” Biswas said. On e-retail platforms advertisers can catch consumers who already have an intent to buy a product since they are browsing a shopping site.

With the rise in digital media, TV and print are on a decline. TV’s ad share dropped from 31% in 2023 to 25% in 2024. “The projected ₹69,000 crore in digital ad spends in two years underlines a decisive shift in consumer behaviour. The growing gap between TV and digital ad spends reflects the rise of on-demand consumption, the dominance of mobile-first experiences, and the increasing measurability of digital platforms,” said Pulp Strategy’s Sharma. Since digital campaigns can be tracked precisely, linking spend directly to conversions, “TV’s broader measurement is less appealing to marketers seeking immediate return on investments,” Biswas added.

But digital media’s struggle with unified measurement remains and the clamour for standardized metrics will grow with spends touching ₹70,000 crore. “Brands often rely on platform-specific analytics (social media insights, e-commerce dashboards) and this siloed approach can lead to data inconsistencies,” Biswas said.

But for Russhabh R Thakkar, CEO, Frodoh World, digital is the way to go: “The future of digital media is data-fueled, AI-optimised, and frictionless, where precision meets personalization, and content finds you before you even search for it.”