Executive summary

The advertising landscape is shifting at breakneck speed. Digital advertising is taking center stage, with rapidly evolving consumer behavior and rising online presence. Digital advertising spends are consistently outpacing traditional spends in both mature advertising markets like the US and emerging markets like India.

The face of digital advertising itself is undergoing rapid transformation. Digital access is becoming increasingly pervasive given the proliferation of channels and formats, leading to consumer attention splitting across platforms. Additionally, consumers are becoming more conscious of their digital media consumption, seeking out content and formats they prefer while actively opting out of irrelevant content and ads.

Within this changing landscape, brands need to adapt their digital advertising approach to meet consumers at the right junctures while maximizing return on investment (ROI). It’s becoming essential for brands to diversify their media spends beyond traditional channels, adopt mobile and platform-first strategies, personalize their marketing, spend more on mid- and bottom-funnel tactics, experiment at scale and speed (via testing and learning [T&L]), and build a consumer first-party data (FPD) flywheel. Publishers also need to rethink consumer retention strategies while improving ad experiences, build multi-source data engines, and enable better data sharing and performance tracking for brands. 

Adtech players, such as demand-side platforms (DSPs), supply-side platforms (SSPs), and ad exchanges, are also evolving with the ever-changing ecosystem and will play an increasingly important role in this landscape. Winners will be those who can become full-stack strategic partners for brands and publishers, led by an ability to drive intelligence across the value chain.

Digital is driving ad growth, with mobile in-app spending at the forefront

The advertising market is attractive, with digital driving growth: Advertising is a large, approximately $1 trillion market globally, consistently outpacing GDP (ad spending rose from 0.6% to about 0.85% of GDP from 2015 to 2024). Digital spends (approximately $690 billion) are outpacing traditional at 15%–20% growth per annum (p.a.) over the past decade, as brands are following consumers who are increasingly shifting online.

Regionally, while North America makes up the majority of advertising spend and shows steady growth, the Asia-Pacific region is poised to grow faster on the backs of emerging countries like India, which are expanding rapidly, fueled by broader consumption growth, demographic tailwinds, and favorable digital trends.

Within digital, mobile in-app ads are expected to be the salient segment: With consumers spending more time on mobiles (globally and in India), mobile devices attract about 70% of digital ad spend, with in-app spend forming the majority of that figure, as it flourishes from increasing “non-voice time” on mobiles, high-engagement video, and new-age ad formats native to user experience.

Consumer and digital advertising landscapes are evolving globally and in India

The digital landscape is changing, with consumers navigating varying paths, using multiple devices to access the Internet for numerous reasons on a multitude of platforms. This digital proliferation and user journey fragmentation mean the touchpoints where brands meet consumers are drastically expanding, leading to both challenges and opportunities.

The role of cookies is transforming as governments (e.g., General Data Protection Regulation [GDPR], California Consumer Privacy Act [CCPA], Digital Personal Data Protection Act [DPDP]) and companies (e.g., Apple’s App Tracking Transparency [ATT]) institute new privacy regulations and consumers consciously make choices to block irrelevant content and ads. Thus, brands need to be agile and evaluate strategies around FPD, ID-less targeting, and the like to target customers on the most relevant platforms, at the right time, ensuring maximum ROI.

Artificial intelligence (AI)/generative AI deployment is becoming vital and enabling effective digital advertising at scale. Brands must chart strategic roadmaps to account for AI and generative AI integrations beyond creative production, be it campaign optimization or audience modeling. Both brands and publishers need to grab this opportunity early to further restructure ad operations for hyper-personalized consumer experiences.

Brands, publishers, and adtech players will need to continue evolving 

As consumer behavior evolves, brands are recognizing the need to transform their digital advertising strategies. Consequently, best-in-class marketers are evolving their strategies around six key tenets:

• Diversify their media mix beyond mega platforms: Allocating increasing spends to broader app ecosystems beyond Google/Meta
• Adopt a mobile and platform-first approach: Tailoring content and creative materials specifically for mobile and core digital platforms, as opposed to copying and pasting from TV or traditional platforms
• Develop a personalization engine: Hyper-personalizing content and advertising for consumers, leveraging FPD and AI/generative AI
• Spend more on mid and bottom funnel marketing: Allocating an increasing share of budget toward mid- and bottom-funnel performance marketing as opposed to indexing heavily on brand awareness and reach
• Experiment at scale and speed: Culling out increasing and dedicated budgets for frequent and fluid T&L programs
• Build a consumer FPD flywheel: Accumulating, enriching, and activating FPD to integrate with digital advertising strategies

Publishers can enable this evolution for marketers by: 

• Offering richer consumer engagement: Improving traffic and retention through platform adaptations (e.g., mobile-first), personalization, AI/machine learning (ML) integrations, and minimally invasive ad experiences
• Building multi-source data engines and enabling data sharing with brands: Building granular first-party databases and enriching them with a multitude of sources to enhance targeting and measurement and enabling data sharing via clean rooms
• Supporting ROI accountability: Enabling full funnel visibility and better targeting through frequent experimentation, event-level data, and analytics capabilities

Adtech players sit at the intersection of brands and publishers and can add immense value to this changing landscape. The winners will be the ones who provide intelligence-led targeting capabilities as well as crucial value-added services, such as cross-channel attribution and incrementality measurement. Best-in-class adtech players are already stepping up, integrating vertically, and investing in such capabilities to remain in the pole position.