The year 2025 has been a period of profound turbulence and transformation for the global advertising industry, with Indian agencies feeling the significant ripple effects. Caught in a powerful crosscurrent of forced consolidation and urgent reinvention, traditional advertising networks are being compelled to scale up in size even as their core functions are being steadily eroded by technology and new market dynamics.
The Perfect Storm: Merger Fallout and Technological Disruption
The $13.5 billion merger between Interpublic Group (IPG) and Omnicom in November 2025 served as a somber exclamation point on a difficult year for the world's major agency networks, reducing the 'Big Six' to five. The newly formed entity, with combined revenues of $25 billion, is now the planet's largest ad network. However, this scale masks a deeper crisis of relevance for it and its peers—WPP, Publicis, Havas, and Dentsu.
The dual threat is clear. On one front, Big Tech companies continue to encroach on traditional advertising territory. On another, a flood of artificial intelligence (AI) applications is automating every facet of the business, from creative concept generation and media buying to cross-platform campaign management. This technological shift is accelerating the decline of the traditional 'TVC-first' agency model, especially after digital ad spending officially overtook television in India in 2024.
The immediate human cost of the IPG-Omnicom consolidation is already looming for India. Layoffs are anticipated across agencies owned by the two merging giants, exacerbated by the discarding of several legendary agency brands like FCB and DDB in the process.
A Tale of Diverging Fortunes and Structural Challenges
Global financial metrics paint a concerning picture. According to marketing research firm COMvergence, billings for top networks have stagnated or fallen. For instance, Dentsu's global billings dropped to $26.7 billion in 2024 from over $29 billion the year before. WPP, the largest network in India, saw its global sales shrink by nearly 6% in Q3 2025, though its Indian operations grew by approximately 7% due to strong performance from WPP Media (formerly GroupM).
Performance is not uniform. French holding companies show more resilience. Publicis Groupe reported a 5.7% revenue growth, fueled by a 6.5% jump in Asia Pacific and heavy investment in technology. Similarly, Havas saw 3.8% sales growth. Their trajectory aligns more closely with consultancies like Accenture Song, whose revenues grew 8% to $20 billion, highlighting where the industry's growth engines are shifting.
Why are legacy networks struggling to keep pace? Industry insiders point to a culture that prioritizes short-term profitability over long-term innovation. A senior executive involved in the Omnicom-IPG merger in India noted that the focus on quarterly EBITDA stifles the patient investment needed for future-focused initiatives. Furthermore, the global holding company structure, designed for worldwide mandates, is now at odds with the market's demand for hyper-localized, nuanced marketing within India itself.
Regulatory Headwinds and the Rise of In-House Teams
As agencies enter 2026, they face two significant regulatory challenges in India. First, the Competition Commission of India (CCI) is investigating major networks for alleged collusion in media buying. The CCI conducted raids in March 2025, seizing documents and questioning executives, with legal challenges from agencies like Madison Communications ongoing.
Second, the formal notification of rules under the Digital Personal Data Protection Act (DPDPA) will force a comprehensive restructuring of how agencies collect, manage, and use consumer data for targeting. This will increase compliance costs and push the industry towards greater reliance on first-party data.
Simultaneously, the very model of outsourcing creative work is being challenged. Brands, from tech startups like Zomato and Swiggy to large conglomerates like Godrej Consumer Products (with its Lighthouse Creative Lab), are building formidable in-house creative capabilities. This trend is diminishing the value proposition of the legendary creative agencies housed within the big networks.
Despite the headwinds, industry leaders like Navin Khemka, President of WPP Media South Asia, see substantial runway for growth in India. He points out that the advertising expenditure-to-GDP ratio in India remains below the global average, suggesting potential for the ad market to double in the next five years. The constant launch of new brands and startups, he argues, will continue to create demand for expert go-to-market strategy and guidance.
The path forward for India's advertising agencies in 2026 is one of adaptation. Success will depend on their ability to shed outdated structures, genuinely embrace technology and data ethics, and rediscover their value in a landscape where clients and machines can do more for themselves than ever before.
