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India’s digital ad market to expand 15% annually with AI adoption
Small and medium-sized enterprises (SMEs) and direct-to-consumer (D2C) brands are playing an increasingly important role in the sector’s growth.
Small and medium-sized enterprises (SMEs) and direct-to-consumer (D2C) brands are playing an increasingly important role in the sector’s growth.
India’s digital advertising market is on course to be one of the fastest-growing worldwide, projected to expand at an annual rate of 15 per cent through 2029. A new report from Bain & Company values the current market at between $16 billion and $18 billion and forecasts that it could rise to $17–$19 billion by the end of the decade.
The growth comes against the backdrop of increasingly pervasive digital media usage. Globally, consumers are engaging with multiple devices and platforms for a wide range of purposes. In the United States, more than 75 per cent of consumers use three or more devices each week. Worldwide, users turn to around 25 unique apps every month for media consumption, while American households report accessing roughly four paid streaming services on a weekly basis.
Within this digital ecosystem, mobile in-app advertising has emerged as a dominant force. As consumers spend more time on mobile devices—both globally and in India—mobiles account for about 70 per cent of digital ad expenditure, with in-app formats making up the majority of this figure.
In India, the expansion of digital advertising is being driven by rising private consumption, high levels of digital adoption and the rapid proliferation of over-the-top (OTT) platforms. The country’s consumers now spend an average of 4.8 hours daily on mobile devices, providing fertile ground for advertisers. Video-led in-app ads are becoming increasingly prominent, while AI-powered search and summary ads are emerging as influential new trends.
Small and medium-sized enterprises (SMEs) and direct-to-consumer (D2C) brands are playing an increasingly important role in the sector’s growth. Their contribution to digital ad spending is projected to rise substantially, with their share expected to reach up to 42 per cent by 2029. This shift highlights the growing influence of challenger and digital-native brands on India’s advertising landscape.
Artificial intelligence is at the centre of these changes, affecting every aspect of the advertising process—from audience targeting and testing to media planning and return-on-investment (ROI) tracking. Brands are diversifying their media budgets, prioritising mobile-first content strategies, and deploying AI alongside first-party data to create hyper-personalised campaigns.
Adtech firms such as InMobi and The Trade Desk are at the forefront of driving maturity in the ecosystem. By enabling integrated adtech partnerships, these firms are helping publishers and brands to refine targeting capabilities and strengthen ROI delivery. Publishers, too, are upgrading their platforms, harnessing AI to sharpen engagement and optimise ad performance.
SPOTLIGHT
The leaders highlighted how AI is emerging as a critical enabler in this shift from marketing’s traditional focus on new customers to a more sustainable model of driving growth from existing accounts.
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