Tax cuts, inflation, and IPL: What will drive India’s ad spend in 2025?

In an exclusive conversation with Mint, Prasanth Kumar, CEO of GroupM South Asia, unpacks the key trends, growth forecasts, and what lies ahead for advertisers in an increasingly digital-first world.

GroupM has forecast a 7% growth for Indian advertising in 2025. Some might see this as conservative, especially considering past revisions. How do you view this projection?

It's important to understand that 7% is progressive growth and, in no way, a slowdown. In absolute terms, the Indian ad market is still expanding significantly. India continues to be one of the top four growth markets globally, and the marginal gap between global ad growth (7.7%) and India's (7%) is well within expected trends.

Also read: GroupM sees India ad spend rising 7% in 2025 to ₹1.6 tn, digital to dominate

Yes, there were some revisions in the past due to economic fluctuations, startup funding slowdowns, and shifts in spending patterns, but India’s market has also witnessed newer growth drivers like retail media, influencer marketing, and commerce-driven advertising. Digital now makes up nearly ₹99,000 crore, the largest share of total ad spend, fuelled by SMEs, e-commerce, and hyper-personalised marketing.

The digital share of advertising expenditure is expected to hit 60% in 2025. How significant is this shift?

It’s massive. Digital is growing at 11.5%, accounting for nearly ₹10,225 crore of the total ₹10,730 crore incremental ad spend. No other media has the same breadth of advertisers—from large enterprises to SMEs and long-tail digital advertisers. 

Also read: Are advertising agencies dying? Long may the art of persuasion live

Retail media is also a major contributor, continuing its 40% CAGR (compound annual growth rate) since 2019, and quick commerce is adding new advertising opportunities. This transformation means brands must rethink their strategies, balancing brand building with performance-driven advertising across multiple platforms.

The government’s recent income tax changes are expected to leave more money in consumers' hands. How will this impact advertising?

The intent behind the government’s move is to increase disposable income, which should drive higher consumer spending. However, not all of this will directly translate into ad spend immediately. Consumer behaviour will evolve over time—some may save, some may invest in high-end durables, while others will increase discretionary spending. 

The real impact will be visible in Q3 and Q4 of 2025, and we expect a positive boost to advertising, particularly in categories like automobiles, durables, and premium FMCG products.

Inflation remains a concern, especially in key consumption categories. How do you see it impacting advertising?

Inflation is slowing down globally, but certain categories—especially food and essentials—continue to see higher prices. This affects consumer purchasing power and brand pricing strategies.

Some brands have already hiked prices, dampening demand. But if inflationary pressures ease, we may see price corrections, leading to higher consumption and, in turn, increased ad spending in the second half of 2025.

IPL remains a key advertising platform. How do you see its ad revenue evolving?

IPL will remain strong, but growth will likely be moderate rather than exponential. We expect a positive trend, with both TV and digital seeing strong advertiser participation. That said, achieving more than 20% growth is unlikely, given the absence of heavy startup sponsorships that fuelled IPL in 2022. Digital will attract more brands, but whether TV sees growth or stagnates depends on market dynamics.

There’s a renewed focus on brand building. Are you seeing brands shift back from performance-heavy strategies?

It’s never an either-or choice between brand building and performance marketing. The best strategies combine both. Brands that relied only on performance marketing have realised the importance of brand equity, while traditionally brand-focused companies are now investing in data-driven, performance-led advertising. 

Also read: Consumer firms eye govt’s tax largesse with aggressive ad spends to boost sales

It’s about balancing long-term brand value with short-term conversions, and that’s why every touchpoint today is an opportunity for consumer engagement.

Speaking of touchpoints, with so many platforms emerging, how does this complexity impact CMOs?

The CMO’s role is more challenging than ever. Marketing today isn’t just about brand-building—it’s about growth, agility, and being present across every relevant consumer touchpoint. 

Marketers must now prioritise key growth areas—whether that’s premium vs. mass audiences, regional vs. national strategies, or digital vs. traditional. It’s also about speed—being fast enough to capitalise on trends, consumer behaviour shifts, and emerging media formats. 

We’re seeing the role of the CMO evolve into a ‘chief growth officer’, with a stronger focus on business impact, real-time decision-making, and full-funnel marketing strategies. The marketing playbook is no longer static—it’s constantly evolving, and those who adapt the fastest will lead the market.