Digital Ads Boost SMBs Growth in India: Primus Partners Report

India’s online advertising market, driven by increased internet access, smartphone usage, and shifting consumer behaviour, has become vital for MSMEs and startups (collectively Small and Medium Businesses (SMBs)). Complementing traditional media, it is projected to grow at a CAGR of 23.49%, with digital ad spending set to reach ₹62,045 crore by 2025. In the light of this, Primus Partners, in collaboration with India SME Forum and Broadband India Forum, have unveiled their empirical report titled, “Leveraging Online Ads for India - Unpacking the Impact of Online Ads on MSMEs and Startups”. The report was released by Shri Jitin Prasada, Hon’ble Union Minister of State for Ministry of Electronics and Information Technology and Ministry of Commerce and Industry, and Shri Anurag Singh Thakur, Hon’ble Member of Parliament. It revealed that 8 out of 10 SMBs find use of online ads more effective than traditional means. With this report, Primus aims to highlight the growing success of online advertising for MSMEs and startups in India.

As online advertising evolves, businesses are embracing innovative strategies to stay competitive in a dynamic market. The report highlights emerging trends in how SMB brands engage with their audiences, with 74% of respondents believing in the effectiveness of personalized ads in achieving their business goals. Additionally, 7 out of 10 SMBs now utilize more than two online advertising platforms to ensure a broader reach and consistent brand presence, catering to diverse user preferences. With the rise of regional language ads and platforms like ShareChat and YouTube, SMBs are tapping into untapped markets in Tier 2 and 3 cities. Meanwhile, the adoption of AI-driven targeting, big data, and short-form video content on platforms like Instagram and OTT services further optimizes ad campaigns, driving higher engagement, ROI, and lead generation.

While embracing these strategies, SMBs also look at various factors while choosing the Online Ad platforms. The report by Primus Partners highlights that 49% SMBs consider to opt platforms offering Return on Investment (RoI), which was followed closely by geographical reach with 47%. SMBs in India prefer moderate ad frequency to balance cost-efficiency and engagement, focusing on seasonal or ad-hoc campaigns during high ROI periods like festivals or sales. High-frequency campaigns are common in sectors like e-commerce, where ongoing customer interaction is crucial.

Commenting on the launch, Ramakrishnan M, Managing Director, Primus Partners, said, “MSMEs and startups, contributing 30% to India’s GDP, play a vital role in the nation’s economic growth. To boost their performance, these businesses can leverage the power of digital advertising, including AI and AI-related tools, which 69% of our surveyed SMBs found effective in achieving their business goals. Our research highlights that harnessing the full potential of online advertising requires policy reforms and industry strategies that address their unique challenges, foster innovation, and reduce barriers, ensuring sustained digital competitiveness.”

He further added, “To enhance SMB access to online advertising, affordable tools and platforms could also be provided through government-industry collaborations, offering subsidized or tiered pricing. Additionally, we feel a multi-stakeholder approach to regulatory frameworks is needed to ensure transparency, consumer protection, and inclusivity, while avoiding burdensome regulations.”

 As India’s online advertising market continues to grow, it presents immense opportunities for MSMEs and startups to enhance their digital presence and drive business success. To fully capitalize on these opportunities, it is crucial that both industry and government work together to remove barriers, provide accessible tools, and foster a supportive regulatory environment. By embracing innovation and optimizing digital advertising strategies, SMBs can not only boost their competitiveness but also contribute significantly to India’s economic growth in the digital era.