Programmatic buying surges to 42% share of digital ad spend: What’s behind the growth?

The rise of programmatic advertising in India is reshaping the digital marketing landscape, driven by technological advancements and changing consumer behaviours.

According to the dentsu-e4m Digital Report 2025, programmatic buying contributed 42% (Rs 20,686 crore) to the digital media industry by the end of 2024, reflecting a growth rate of 21% compared to 2023. This trend is expected to continue, with programmatic advertising reaching 44% (Rs 30,405 crore) of the digital ad market by 2026, growing at a compound annual growth rate (CAGR) of 21.24%.

Interestingly, as per the 2024 report, programmatic buying was indeed projected to contribute 42% to the digital media industry by the end of 2024, at a growth rate of 21% when compared to 2023. This data from the 2024 report aligns closely with the projections made in the 2025 Report, indicating a consistent growth trajectory for programmatic advertising in India's digital media landscape, and one with a lot of moving parts.

The surge in programmatic advertising reflects a broader shift in the Indian digital marketing ecosystem. Russhabh R Thakkar, Founder and CEO of Frodoh, notes, “Beyond traditional digital spaces like OTT and video, OEMs and CTV platforms have added diversity to available ad inventories.” This expansion of inventory options has opened up new avenues for advertisers to reach their target audiences more effectively.

Rahul Vengalil, CEO and Co-Founder of tgthr, offers insight into the nuances of programmatic's growth, explaining that it extends beyond just Google and Meta. “Any platform that has loads of PI is now using their own DSPs to start selling ads. Amazon, Flipkart, Paytm, the list goes on,” Vengalil notes. He emphasizes the effectiveness of programmatic when utilized correctly, citing an example of a video campaign delivering over 60% View Through Rate (VTR) on a skippable unit.

“With more and more time spent on understanding the consumers, more and more marketers will start defining the Core TG and Growth TG cohorts a lot more effectively, and then programmatic becomes a great option,” says Vengalil.

Thakkar emphasizes the growing reliance on automation and data-driven targeting, stating, “With video dominating digital consumption, programmatic enables seamless placement across OTT, CTV, and social platforms, making it a key driver of ad budgets.” This seamless integration across platforms allows advertisers to execute unified campaigns while maintaining precise targeting and frequency management.

The potential for further growth in programmatic advertising is significant, with Thakkar projecting that “Over the next two years, 50-55% of digital ad spends are expected to come from programmatic, driven by better cross-device attribution, AI-led optimizations, and advancements in real-time bidding mechanisms.” This forecast underscores the increasing confidence advertisers have in programmatic's ability to deliver measurable outcomes and drive performance.

Sarvesh Bagla, Founder and CEO at Techmagnate, outlines three key factors driving programmatic's lead in India's advertising spends: efficiency in targeting the right audience, real-time adaptability based on consumer data, and cost-effectiveness compared to traditional formats like TV commercials. Bagla also highlights industry-specific adoption trends, with e-commerce, travel, and finance leading the way in precise ad targeting.

As programmatic advertising continues to evolve, it offers advertisers unprecedented opportunities to connect with their audiences in meaningful ways. However, for programmatic to reach its full potential, barriers such as perceived complexity and limited technical know-how must be addressed, particularly for SMBs and traditional sectors. The industry needs to focus on education and simplifying adoption processes to make programmatic advertising viable for every advertiser, regardless of size or sector.

However, the adoption of programmatic advertising is not uniform across all sectors. While e-commerce, BFSI, and tech sectors are fully leveraging programmatic to drive performance and brand visibility, SMBs and B2B players have been slower to adopt. Thakkar attributes this disparity to "perceived complexity, limited technical know-how, and, in some cases, regulatory challenges, especially in healthcare and pharma."

The consistent growth trajectory of programmatic advertising in India's digital media landscape, coupled with the growing prominence of retail media, suggests a dynamic future for digital marketing in the country. As brands increasingly prioritize programmatic for its scalability and ability to deliver measurable outcomes, the sector is poised for continued expansion and innovation in the coming years, reshaping the digital advertising landscape in India.