India’s digital advertising market poised to grow at 19.09% CAGR: Report

India’s marketing technology (MarTech) landscape is undergoing rapid expansion, driven by digital transformation, government initiatives, and the increasing adoption of artificial intelligence. According to the 'Dentsu MarTech India Report 2025,' MarTech has evolved from an auxiliary tool to a critical component of business strategy, enabling organisations to optimise customer journeys, enhance engagement, and improve return on investment. With the Indian digital advertising industry projected to reach ₹59,200 crore by the end of 2025, the role of MarTech continues to expand, particularly in e-commerce, digital retail, and AI-driven marketing solutions.

Growth drivers 

MarTech’s rapid adoption is fuelled by several factors, including government-backed digital initiatives, the rise of AI and automation, and the growing prominence of first-party data strategies in the wake of privacy concerns. The integration of AI-driven tools for customer relationship management (CRM), predictive analytics, and content personalisation is reshaping marketing strategies across industries.

Additionally, India's burgeoning startup ecosystem plays a crucial role in MarTech innovation. Startups specialising in SaaS-based solutions, AI, and data analytics are introducing cost-effective, scalable tools that cater to both domestic and global markets. Emerging technologies such as voice search and vernacular language marketing are also expanding MarTech’s reach into Tier 2 and Tier 3 cities.

Challenges in MarTech Adoption

Despite its growth, the MarTech industry faces challenges, including integration complexities, data privacy regulations, and a shortage of skilled professionals. Many businesses struggle with the interoperability of multiple MarTech tools, leading to inefficiencies. Additionally, regulatory compliance, particularly in light of India’s upcoming Personal Data Protection Bill, remains a priority.

The industry also faces a skills gap, with a limited talent pool proficient in advanced MarTech tools. Businesses are being urged to invest in continuous training and talent development to maximise their MarTech investments.

Key trends & future outlook

• AI and machine learning: Increasingly used for hyper-personalised marketing, automation, and predictive analytics.
• First-party data: Gaining strategic importance as third-party cookies phase out.
• Vernacular and voice marketing: Expanding digital engagement beyond metro cities.
• Integration of programmatic advertising: Driving efficiency in digital media investments.

Commenting on the report launch, Harsha Razdan, CEO, South Asia, dentsu said, “I have always believed that technology is most powerful when it simplifies complexity. Martech is a great example of that - it helps businesses make sense of vast amounts of data and turn it into meaningful customer experiences. Today, it’s not about whether businesses use Martech, but how well they integrate it into decision-making and customer engagement. In India, we’re at that turning point. The companies that get this right will build stronger customer relationships and more resilient businesses. But success isn’t just about having the right tools - it’s about knowing what to focus on. This report is designed to help businesses cut through the noise, focus on what works, and turn Martech into real business impact.”

Narayan Devanathan, President & Chief Strategy Officer, South Asia, dentsu added, “As the dots between media, creative, and customer experience connect more intimately, Martech has become the spine that unites these disciplines – enabling powerful, data-driven connections that drive meaningful outcomes. India's Martech landscape is evolving rapidly, redefining how brands engage with consumers. By viewing Martech as the backbone of their business strategy, brands can unlock smarter solutions that fuel growth and impact. We’re proud to introduce this report as a valuable guide for brands looking to navigate and thrive in this ever-changing market.”

The report highlights that the industry is shifting towards customer experience-driven strategies, with a focus on hyper-personalisation and data-driven insights. While challenges remain, businesses that prioritise innovation, regulatory compliance, and skill development are well-positioned to leverage MarTech for competitive advantage in an increasingly digital marketplace.