India’s digital ad market to reach $14.6 billion in 2026 as brands diversify spending

MUMBAI: India’s advertising pie is getting a bigger digital slice. The country’s digital advertising market is projected to grow 10.1 per cent in 2026 to reach $14.56 billion, as brands shift spending towards regional content, connected TV, creator-led campaigns and retail media, according to a report by PayNXT360.

The report estimates that India’s digital advertising market expanded at a compound annual growth rate (CAGR) of 8.6 per cent between 2020 and 2025. Growth is expected to accelerate further, with the market forecast to record a 12 per cent CAGR between 2026 and 2029, reaching $20.46 billion by the end of the forecast period.

The study points to a structural shift in how advertisers allocate budgets. Instead of relying heavily on traditional digital channels, brands are increasingly investing in regional language content, influencer marketing, premium streaming platforms, retail media and AI-powered advertising technologies to improve targeting and measurable returns.

Regional and vernacular content has emerged as one of the biggest growth drivers, fuelled by rising internet adoption across Tier II and Tier III cities. Platforms such as ShareChat, Dailyhunt and Google’s YouTube are seeing stronger advertiser interest as brands tailor campaigns for audiences consuming content in local languages.

Social commerce is also becoming a major advertising channel. Brands are increasingly using creators on Instagram, YouTube Shorts and e-commerce platforms to drive product discovery and sales, while performance-based influencer campaigns continue to gain traction over traditional celebrity endorsements.

Premium video advertising is another fast-growing segment. The report highlights rising investments in connected TV and OTT platforms, with services such as JioCinema and Disney+ Hotstar attracting larger advertising budgets through live sports, entertainment programming and advanced audience targeting capabilities.

Retail media is rapidly emerging as a standalone advertising category. Platforms including Amazon Ads, Flipkart Ads and JioMart are giving brands access to shoppers closer to the point of purchase through sponsored listings and native advertising. Quick commerce players such as Zepto and Blinkit are also building advertising businesses around their growing consumer bases.

The report notes that artificial intelligence, campaign measurement and privacy compliance are becoming increasingly important as advertisers seek better attribution and real-time optimisation. Adtech companies, including InMobi, are expanding partnerships around identity solutions and retail media, while firms such as The Trade Desk continue to deepen their presence in the Indian market.

Competition across the industry is also intensifying. While Google and Meta continue to dominate search and social advertising, domestic platforms are gaining ground through regional content, creator ecosystems and commerce-led advertising formats. At the same time, publishers and media companies such as Times Internet are strengthening their programmatic advertising capabilities.

The report also highlights the growing influence of regulation. India’s Digital Personal Data Protection Act and updated influencer disclosure norms introduced by the Advertising Standards Council of India are expected to reshape advertising practices by encouraging greater transparency, consent-based data usage and stronger measurement standards.

Looking ahead, PayNXT360 expects India’s digital advertising landscape to become increasingly fragmented as marketers spread budgets across multiple platforms instead of relying on a handful of dominant channels. Regional content, AI-powered advertising, retail media and connected TV are likely to remain at the centre of this next phase of growth, as advertisers chase measurable returns in one of the world’s fastest-growing digital markets.