India’s Booming Digital Advertising Market: A Success Story for SMBs

India’s online advertising market is experiencing a remarkable surge, with Small and Medium Businesses (SMBs) increasingly relying on digital platforms to achieve their marketing objectives. According to a report by Primus Partners, around 80% of SMBs surveyed have incorporated digital advertising into their marketing strategies, underscoring the sector’s growing importance.

A notable finding from the report is that 42% of SMBs allocate more than 40% of their marketing budget to online ads, demonstrating the increasing role of digital strategies in business growth. Personalised advertisements have proven particularly effective, with 74% of SMBs affirming their success in helping businesses meet their goals. The high impact of personalised ads is indicative of a broader trend towards tailored marketing that speaks directly to consumer preferences, enhancing engagement and return on investment (ROI).

Multi-Platform Advertising to Maximise Reach

The Primus Partners report highlights that a significant 70% of SMBs use more than two online advertising platforms, showcasing the versatility of businesses in seeking the best opportunities for audience engagement. Among the rising stars in the digital advertising space are platforms like ShareChat and YouTube, which are gaining traction in Tier II and Tier III cities through regional language ads. This shift towards regional content is empowering businesses to connect with local audiences in ways that resonate more deeply than generic national campaigns.

The Role of AI and Big Data in Digital Ads

Another major development in the sector is the use of AI-driven targeting, big data, and short-form video content, particularly on platforms like Instagram and OTT services. These technologies enhance the efficiency and effectiveness of advertising campaigns by delivering more relevant and timely content to the right audiences. The AI-based targeting optimises ad placements, improving engagement rates, driving higher ROI, and generating valuable leads.

Prioritising ROI and Geographical Reach

When it comes to choosing advertising platforms, 49% of SMBs consider ROI their top priority, closely followed by geographical reach at 47%. Many businesses seek to strike a balance between ad frequency and cost efficiency. During peak periods such as festivals, businesses tend to focus on seasonal or ad-hoc campaigns, while sectors like e-commerce favour high-frequency campaigns to sustain customer engagement over time.

Expanding into New Markets

An impressive 69% of SMBs have leveraged digital advertising to expand into new markets. Of those, 40% have grown domestically, while 30% have ventured into international markets, and 30% have successfully expanded both locally and globally. This growth trajectory reflects the flexibility and adaptability of businesses in a rapidly evolving digital landscape.

Projections for India’s Digital Advertising Market

The future looks even brighter for India’s digital advertising sector. The report projects that digital ad spending in India will reach US$ 7.31 billion (Rs. 62,045 crore) by FY25, growing at a robust CAGR of 23.49%. This growth is driven by increasing reliance on digital platforms and the continued evolution of AI and big data technologies to improve ad targeting and performance.

The Need for Policy Support

Despite this growth, Mr. Ramakrishnan M, Managing Director of Primus Partners, emphasised the need for policy reforms and targeted industry strategies to help SMBs fully realise the potential of digital advertising. By offering more support, such as training programs, financial incentives, and access to advanced technologies, India can ensure that SMBs are not only participating in the digital advertising revolution but also thriving in it.

In conclusion, India’s online advertising market is booming, driven by a growing number of SMBs embracing digital platforms, AI technologies, and personalised advertising. As these businesses continue to expand and adapt, the sector’s future looks promising, with a projected growth rate of nearly 24% annually.

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