India’s digital advertising economy is poised for sharp expansion over the next five years even as structural challenges threaten to temper the pace, said Bain & Company’s latest report ‘Advertising in the Digital Age, in India and Around the World’.
The consultancy estimates that India’s digital ad market, valued at $16-18 billion in 2024, will grow at a compound annual rate of about 15% until 2029, reaching $17-19 billion. Overall ad spends are projected to rise from 0.4% of GDP today to about 0.5% by 2029, among the fastest growth rates globally, though still lagging China and Japan on the ad-to-GDP ratio, it said.
“India’s digital advertising market is at an inflection point,” said Prabhav Kashyap, partner at Bain & Company. “The convergence of mobile-led consumption, the rapid rise of video formats, and the integration of AI into every stage of the advertising process is reshaping how brands connect with consumers. Over the next five years, the ability to combine creativity, data, and technology will be the defining factor in who captures the most value.”
Growth drivers
Mobile dominates digital consumption in India, accounting for nearly 70-80% of ad spends — higher than the global average — with consumers spending 4.8 hours a day on their devices in 2023, up from 3.7 hours in 2019. In-app video formats are growing the fastest, and are projected to expand their share by 6-8 percentage points over the next five years. Connected TV (CTV), though still nascent with a less than 5% share in India, is gaining traction as households with smart TVs doubled to 45 million between 2022 and 2024.
Small and medium enterprises (SMEs) and direct-to-consumer brands are also driving the shift, with their share of digital ad spends expected to rise from 37% in 2024 to more than 40% by 2029. Many of these advertisers are mobile-first, ecommerce-heavy, and skewed towards performance marketing.
Strategic shifts for brands
The report identifies six imperatives for advertisers: diversifying beyond mega platforms such as Google and Meta; adopting platform-specific creative strategies; building personalisation engines using first-party data; allocating more to mid- and bottom-funnel campaigns; testing and learning at scale; and investing in first-party data flywheels.
Some Indian brands are already experimenting with these. For instance, FMCG majors are customising city-level campaigns based on air quality and rainfall, while fintechs have shifted entire digital budgets towards IPL streaming.
Challenges ahead
But alongside the optimism, the Bain report also flags risks. “As consumers spread their attention across more devices and platforms, ad fatigue is a very real concern,” said Devika Mittal, associate partner at Bain & Company. “The winners will be those who not only invest in targeting and measurement, but also reimagine creative formats so that ads remain relevant and engaging.”
Privacy regulations, including India’s Digital Personal Data Protection Act, are reshaping how brands collect and use data. With over 75% of users opting out of tracking or rejecting cookies, the report warns that building trust-based first-party data ecosystems will be harder in India than in more mature markets.
Mittal added that adtech players such as InMobi and The Trade Desk are stepping into a more strategic role, moving from back-end pipes to full-stack partners offering AI-driven targeting, clean-room-based data sharing, and cross-channel attribution. But measurement and fraud challenges continue to erode confidence. “The ecosystem has matured significantly, but gaps in third-party verification and ROI tracking are still barriers to mainstream adoption,” she noted.
Execution risks
India’s digital ad market will remain one of the fastest-growing globally, but Bain cautions that execution risks could blunt its growth. Among these is whether OTT platforms can capture CTV ad value before YouTube dominates TV screens, whether advertisers can fund experimentation at scale, and whether consumers will willingly share data to sustain first-party strategies.
“The blind spot in India’s digital advertising industry is assuming growth is guaranteed,” Mittal said. “If creative innovation stalls or consumer trust breaks down, the market could fall short of the rosy projections.”
