Advertising
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2026: The year when retail media becomes the organising principle of digital plans, crossing Rs 30,000 cr
Fraud is one of the major drivers of AI adoption. India faces one of the world’s highest invalid traffic risks.
While retail media reshapes where money flows, AI is redefining how decisions are made.
India’s ad tech ecosystem is undergoing its most consequential structural shift in a decade. What began in 2024 as experimentation has now hardened into default strategy in 2025, with three forces reshaping digital planning: AI at scale, the explosive rise of retail media, and the mainstreaming of connected TV (CTV).
By 2026, industry leaders say these forces will no longer function as isolated channels or tools. They will form the organising architecture of how media is planned, bought, measured and optimised.
“Three shifts define 2025: AI everywhere, retail media’s explosive rise, and CTV going mainstream,” said Prashant Puri, Co-Founder & CEO, AdLift (Liqvd Asia). “Retail media is India’s fastest-growing channel, expanding by over 26 percent and projected to hit 15 percent of total ad revenue by 2026.”
That growth is being underwritten by a massive behavioural shift in Indian audiences. India now has 313 million digital-only viewers and 129 million CTV viewers, according to Puri, pushing programmatic CTV and shoppable video into the core of media plans.
“Programmatic CTV and shoppable video are no longer experimental,” he said. “They are now standard in serious media plans.”
Retail Media Moves to the Centre of Digital Strategy
The fastest change is happening inside performance budgets.
“In India, 2025 marks a clear shift in how performance budgets are being deployed,” said Meher Patel, Founder of Hector. “Retail media has moved from being a supplementary channel to a core part of digital advertising strategies.”
Marketplaces are no longer treated as last-mile conversion endpoints. They now dominate the full customer journey.
“For many advertisers, marketplaces are now central to both customer acquisition and revenue growth, rather than just a conversion endpoint,” Patel said.
Puri believes this shift will crystallise fully in 2026. “Retail media will become the organising principle of digital plans, projected to cross ₹30,000 crore and to hold a 15 percent share by 2026,” he said. “That fundamentally changes how brands structure their marketing investments.”
AI Moves from Assistance to Autonomy
While retail media reshapes where money flows, AI is redefining how decisions are made.
In 2025, AI is no longer running controlled pilots. It is operating the engine room of Indian advertising.
“AI bidding, pacing and budget allocation on Google, Meta and retail media are fully scaled, not pilots,” Puri said. “AI-led optimisation is delivering clear ROAS and efficiency improvements across Indian campaigns.”
However, he cautions that gains are not uniform.
“The impact varies by category, creative strength and data maturity. It’s meaningful, but not uniform across the board,” he said.
AI’s most measurable commercial impact is already visible.
According to Puri, AI-driven optimisation is consistently delivering double-digit ROAS improvements across BFSI, D2C and SaaS. AI creative tools are cutting production time while generating 3 to 4 times engagement lifts and up to 3.2x ROAS in Indian case studies. Indian AI-video platforms, he added, are delivering 3 to 5 times ROAS in performance campaigns.
Fraud is another major driver of AI adoption. India faces one of the world’s highest invalid traffic risks.
“India sees 12 percent of budgets leak to fraud,” Puri said. “AI-powered fraud mitigation can deliver 12 to 14 percent recovery when invalid traffic is removed, which directly boosts margins.”
Where AI Must Stop and Humans Must Lead
Despite automation’s rapid expansion, both executives draw a clear line between machine efficiency and human responsibility.
“AI can take full autonomy in parts of the stack where signals are dense, objectives are clear and the cost of error is low,” Puri said. This includes bidding, pacing, budget allocation, creative rotation, supply-path optimisation, feed optimisation and retail-media targeting.
“These systems now process millions of micro-signals that humans simply cannot match.”
But the boundaries are firm.
“In advanced ad tech, there are still areas where human intervention is non-negotiable,” he said. “Strategy, brand storytelling, cultural nuance, regulatory categories like BFSI or health, long-cycle measurement, experimentation frameworks, and anything involving data governance or privacy risk must remain human-led.”
Patel echoes this view from a governance perspective.
“With India’s data protection framework now in force, ad tech decisions are no longer driven by performance alone, but also by compliance readiness and long-term risk management,” he said.
Human oversight, he added, remains essential for audience strategy, customer data handling, consent decisions and regulatory compliance. “Accountability in these areas cannot be delegated entirely to automated systems.”
2026: From Optimising Ads to Orchestrating Experiences
By 2026, the centre of gravity will move again.
“The biggest shift: AI will move from optimising ads to orchestrating personalised, cross-channel experiences,” Puri said.
CTV’s expansion will force unified planning across TV, open internet and retail media, collapsing the old separation between brand and performance budgets. At the same time, AI-based verification, MMM and incrementality tools will scale rapidly as fraud, signal loss and privacy constraints increase.
Patel believes the next phase of Indian ad tech growth will be defined not just by technology, but by trust and governance.
“As automation increases, so will the need for stronger controls around data usage, measurement quality and fraud prevention,” he said. “The next phase of growth will be shaped as much by trust and governance as by technological capability.”
As 2026 approaches, the picture is becoming clear: retail media will anchor the ecosystem, AI will run its machinery, CTV will unify screens, and humans will remain responsible for the consequences.
Or as Puri summarised it, “Let AI run the machine. Let humans define the direction, the guardrails and the consequences.”
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