India is the most exciting ad market in the world right now

All eyes are on India.

As the world’s most populous nation and now its fastest-growing major economy, India is on the cusp of economic, social and technological growth that could reshape the world, just like China did four decades ago.

Impressive figures detailing India’s changing face abound. For marketers, these are some of the most important: a growing middle class expected to reach 715 million citizens by 2030. A pool of internet users that is now above the 800 million mark. And 700 million people who are already spending their time on video and audio streaming platforms.

These are mind-boggling numbers. But they don’t stop there — nearly half (45%) of the population has yet to gain access to the internet, suggesting we may be just at the beginning of the country’s digital revolution.

India is a market that advertisers simply can’t afford to miss.

As if India’s macroeconomic and social changes weren’t enough, its blend of consumer preferences for hyperlocal content, the tussle of mega media mergers, and intensely passionate sports (read: cricket) fans only add to its standing as arguably the world’s most exciting, rapidly changing, and challenging advertising landscape for brands to navigate.

Social media and messaging apps like Facebook and WhatsApp take up significant chunks of Indians’ time. But it is streaming that takes the crown when it comes to popularity.

Last year, audio and video over-the-top (OTT) channels took over as the top online activity in Indian households, according to a study by Kantar and the Internet and Mobile Association of India.

“India has been steadily adopting on-demand content […] since the Jio movement happened in late 2016,” Sreeraman Thiagarajan, CEO of aawaz.com, tells The Current. Aawaz is a podcast network catering to India’s rich variety of languages.

The Jio movement saw media conglomerate Reliance Jio Infocomm provide 4G access for free to millions of Indians back in 2016, before charging nominal amounts for data in 2017. This catalyzed the exodus from traditional media to digital platforms as it brought millions of Indians online.

The shift went beyond the country’s urban centers, with Kantar reporting that more than half (54%) of the country’s internet users live in rural towns.

This expanded 4G access, as well as the ongoing rollout of fixed wireless access devices, which promise to deliver 5G-fast internet in smaller towns and rural areas, is helping unlock even more addressable audiences for advertisers.

With the middle class set to become a driving force of the economy thanks to its growing disposable income, so will demand increase for quality services like health and personal care, as well as for consumer goods.

Dentsu India estimates that the digital ad industry in the country was worth over $4.95 billion in 2023. By 2025, that figure is forecasted to be $7.55 billion, after compounded growth of 23%.

Global brands are already finding success in India’s rapidly changing media landscape, with PepsiCo a recent example. Aiming to promote a new drink in India’s crowded marketplace, the food and beverage giant managed to reach over 12 million unique users across connected TV (CTV) and OTT, audio, and websites. PepsiCo also achieved a 13% increase in media efficiency with this new programmatic strategy.

The rise of streaming

PepsiCo’s decision to focus on digital instead of traditional linear TV was deliberate, as its target audience aged 18 to 34 typically spends their time on digital devices.

Digital-first consumption habits will likely remain a key trend in India, as ongoing market movements are set to keep audiences glued to their screens. A key reason is JioCinema’s exclusive streaming rights deal to stream sports like the country’s most-watched annual cricket tournament, the Indian Premier League (IPL), amid a mega merger with Disney.

This year, the IPL enjoyed 111 million streamers on the first day alone, reported JioCinema. Meanwhile, Disney+ Hotstar, which owns linear TV rights to the annual cricket tournament, reported a core audience of 44 million.

As for the Reliance–Disney merger, experts believe it will result in a critical consolidation of the highly competitive OTT market. Global brokerage firm Jefferies said that the potential combination will sport the “most lucrative cricketing rights” in India and will have a 40% share of the advertising market. “This opens avenues for better ad inventory monetization and content cost reduction with lower competition,” it said. (India’s antitrust watchbody has concerns about the proposed merger.)

Before this, India’s crowded OTT landscape of 40-plus players had driven down advertisement rates. Experts predict that rates could climb 20% to 25% post-consolidation.

“With traditional TV viewership declining, CTV and OTT platforms have become crucial,” Omnicom Media Group’s (OMG’s) media specialist Bhoopendra Yadav tells The Current.

“The large user base of OTT platforms in India offers significant opportunities for precise targeting. Advertisers can use nonskippable, short-duration ads and leverage analytics to measure performance. The interactive nature of OTT platforms allows for engaging ad formats like shoppable ads and interactive quizzes.”

Audio: volume up

Besides the video streaming boom, audio and music streaming apps have also been enjoying plenty of plays in India.

For one, India is set to become the world’s biggest music streaming market. It currently already surpasses the U.S. in terms of year-over-year volume growth, and in the next 12 months, it may well take over the U.S.’s top spot in terms of total streams.

Audio channels, including podcasts, have been steadily growing in popularity in India, with over 208 million people streaming music in 2022, according to EY.

However, users still prefer streaming music for free and there were just 4 million to 5 million paid music streaming subscriptions in 2022. This number is projected to reach 8 million by 2025. This consumer preference is likely why India’s audio market is currently driven primarily by ad revenue.

Spotify remains a top music streaming service, holding 26% of the market, but local platforms like Reliance’s JioSaavn, Wynk by Airtel, and Gaana are quickly growing in popularity.

Based on data from its 70-million-strong user base, Spotify claims that over 70% of local consumption was for music in Hindi, Punjabi, Tamil, and Telugu. It also found that podcast listening is increasing significantly, with more than 200,000 podcasts created in 2023.

The key to engage audiences in India thus remains hyper-localization, something homegrown platforms have been focusing on to capture their share of this competitive market.

“Advertisers follow where the audience goes,” says aawaz.com's Thiagarajan. “Today, there are more organized players in the audio space who depend on ad-driven and sponsorship-driven revenues, which is made possible only because advertisers believe in the medium.”

OMG’s Yadav adds that audio streaming can enable personalized advertising with its intimate setting for ads and ability to offer dynamic ad insertion based on user preferences. “This channel is ideal for narrative-driven ads and building brand affinity,” he says.

Winds of change

Advertisers hoping to bank on the Indian market can look forward to plenty of opportunities, particularly with online advertising set to become one of the fastest-growing segments of India’s rapidly expanding digital economy.

Yadav suggests doubling down on data-driven strategies and using advanced analytics to understand consumer behavior and optimize ad spend. There should also be greater focus on regional content as consumption for localized videos and audio rises. To enhance audience engagement, advertisers can tailor their strategies even more to cater to linguistic and cultural preferences.

“Consumers are spoilt for choice and that is the big market shift,” says Thiagarajan. “Advertisers must not take [them] for granted and annoy them with ads. Rather, find meaningful ways to tell the brand’s story that resonates with the audience.”

As to how advertisers can navigate India’s ad landscape, it all boils down to this: personalization.

“Programmatic has been around for over a decade now and with the advent of artificial intelligence, advertisers must not just look at targeting the right audience, but also at personalizing the message to the largest possible extent,” says Thiagarajan.

The Current is owned and operated by The Trade Desk Inc.