Tier 2 and 3 cities: The new epicentre of India's CTV-led brand growth

Metros no longer confine India's premium audience. The country's most valuable viewership and purchasing power have quietly shifted to Tier 2 and Tier 3 cities: households that are affluent, digital-first, and increasingly consuming content on connected TV. 

This shift isn't incremental. It's redefining where India's next wave of advertising efficiency will emerge and who actually qualifies as premium.

Over the past two years, India has crossed 60 million connected TV households. However, it's not the sheer number that matters. It's where those screens are lighting up. 

Non-metro regions are driving the fastest adoption, as affordable smart TVs, high-speed data, and regional OTT content converge to create a premium ecosystem at scale.

For years, premium audiences were equated with urban, English-speaking users. This assumption is no longer valid. Roughly 50 to 60 million strong, the audience that drives India's digital economy is spread across these emerging markets. 

Despite making up just 10% of India's 500 to 600 million smartphone users, they are responsible for the majority of significant transactions such as high-value e-commerce, financial products, and automobile purchases.

And increasingly, this same audience is watching content on connected TV. That's the real unlock. CTV is becoming the screen that filters intent from noise. While smartphone campaigns reach billions of impressions, CTV reaches the households that matter most: the ones with disposable income, brand affinity, and time to engage.

The rise of the new premium household

The affordability curve has flipped the script. Smart TVs that once cost Rs 30,000 are now available for under Rs 10,000, putting them within reach of middle- and upper-middle-income households across India's smaller towns. Combined with broadband expansion and aggressive EMI financing, smart TVs have become a default purchase, not a luxury one.

In markets like Rajasthan, Gujarat, or Tamil Nadu, these households mirror metro consumption patterns: they own smartphones, transact online, and stream premium video on connected TVs. The difference lies in efficiency. 

For every Rs 500 CPM spent reaching an affluent metro viewer, a comparable household in a Tier 2 town can be reached for less than half that. 

The quality of the audience doesn't change. Only the cost does. For advertisers, that's a rare equation: high-intent users, high attention, and low wastage.

Regional content: The engine powering CTV

The gravitational pull of CTV in these markets is powered by regional storytelling. Viewers want narratives in their language: shows that sound like their city, reference their festivals, and mirror their realities. Platforms such as Aha, Chaupal, HoiChoi, Manorama Max, Sun NXT, Shemaroo Entertainment, Dangal Play, and Pitaara TV are leading this regional renaissance. 

Together, these platforms account for well over half of India's OTT consumption. If bundled together, they would easily surpass the viewership of the country's single largest OTT service.

This isn't a cultural footnote. It's a business advantage. Regional content drives co-viewing, longer watch times, and higher ad recall, especially on large screens. 

A Tamil web drama in Madurai or a Punjabi comedy in Ludhiana delivers not just views but attention that is sustained across episodes and seasons. For brands, that's the sweet spot: premium storytelling meeting measurable engagement.

Cord cutting: TV has become CTV

In non-metro India, CTV isn't an alternative to television. It's the television. Preloaded streaming interfaces are replacing set-top boxes. Apps like JioHotstar are redefining prime time, bringing cricket, entertainment, and cinema under one connected screen.

This marks a generational leap. Families that once depended on cable schedules now stream together on demand, retaining the communal aspect of TV but gaining the flexibility of digital. For advertisers, that hybrid of shared attention and addressability is gold. It brings back the collective viewing of television with the precision of digital.

Bundles are breaking the barrier

Telecom and device manufacturers have quietly accelerated this shift. By bundling OTT subscriptions with data plans or smart TV purchases, they've reduced friction for new users. 

Today's smart TV buyers likely have already signed up for multiple streaming platforms before even exploring the interface.

This bundling model is expanding India's premium audience faster than organic adoption ever could. It's making top-tier content accessible in towns that were never on the traditional broadcast radar, giving advertisers scale without the clutter.

The advertiser's new reality

For advertisers, this convergence creates an unmatched opportunity and a new responsibility. The opportunity lies in access to a premium, engaged, and addressable audience at scale. The responsibility lies in rethinking media planning and measurement.

CTV is no longer a test channel. It's where the most commercially active audiences live. It offers the storytelling canvas of television, the precision of digital, and the efficiency of regional markets. 

Metrics are evolving: brand lift, geo lift, and exposure-based attribution now replace click-based proxies. Contextual AI is improving relevance, aligning ads to content moments that matter: food brands during meal hours and travel ads during weekend movies.

This is where the next decade of advertising growth in India will unfold: in homes that were previously overlooked, now firmly positioned at the heart of the premium video narrative. Tier 2 and Tier 3 cities aren't chasing metros anymore. They're setting the pace. And the brands that recognise these trends now will define what premium advertising looks like for the next generation.

(Russhabh R. Thakkar is the Founder and CEO at Frodoh, an adtech company based in India, specialising in immersive and interactive digital advertising across Connected TV, digital retail media, and DOOH advertising.)