8 out of 10 SMBs rely on online ads, 76% find them more effective than traditional methods, reports Primus Partners
72% of SMBs utilise more than 2 online platforms, showing a strategic approach to diversifying their digital presence
94% SMBs achieved a Return on Ad Spend (ROAS) of more than 2x, underscoring the effectiveness of targeted campaigns
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 personalised ads in achieving their business goals. Additionally, 7 out of 10 SMBs now utilise 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 optimises 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 subsidised 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 capitalise 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 optimising digital advertising strategies, SMBs can not only boost their competitiveness but also contribute significantly to India’s economic growth in the digital era.
About the Survey
The primary research for this study gathered insights from a diverse group of SMBs across various sectors such as manufacturing, retail, technology, healthcare, and services. Additionally, in-depth Key Informant Interviews (KIIs) were conducted with SMB founders, legal experts, academia, industry specialists, and advertising executives. These respondents provided valuable perspectives on the adoption, challenges, and effectiveness of online advertising, covering aspects like business growth, customer acquisition, regulatory compliance, and technology’s role in optimising digital campaigns for SMBs. This multi-stakeholder approach offered a comprehensive view of the online advertising landscape for small businesses.
Key Highlights from the survey
Amongst the SMBs surveyed, 80% of the respondents had used online ads in their business
42% of the respondents allocated over 40% of their marketing budget towards online advertisements
Further, 72% of SMBs utilise more than 2 online platforms, showing a strategic approach to diversifying their digital presence
33% run weekly campaigns, while 42% opt for monthly ads, indicating consistent engagement with digital platforms
76% of businesses found online ads more effective than traditional advertising
70% of respondents believed that online advertising helped them optimise marketing budgets and over 80% agreed that online advertising helped improve their brand visibility and helped in brand building
69% of respondents expanded to new markets, with 40% growing domestically, 30% internationally, and another 30% across both
80% stated that their business revenues more than doubled since implementing online advertising
94% achieved a Return on Ad Spend (ROAS) of more than 2x, underscoring the effectiveness of targeted campaigns
58% of the respondents felt that analytics and measurement tools offered in the market were impactful in meeting their business goals
AI-driven campaigns were cited by 74% of respondents as key to precision targeting and cost efficiency
The top three areas where AI made an impact in their online advertising efforts include
Ad creation & design,
Audience targeting, and
Budget optimisation & performance analysis.
49% reported insufficient knowledge of online advertising techniques
43% cited budget constraints as a significant challenge, especially for smaller enterprises
35% cited complying with regulations as another challenges
About Primus Partners Pvt. Ltd.
Primus Partners Pvt. Ltd. is a leading management consulting firm headquartered in New Delhi, with offices across India, UAE and KSA. Specialising in sectors such as technology, public policy, and impact advisory, the firm provides innovative solutions to drive sustainable growth. Through its expertise in Idea Realisation, Primus is a trusted advisor in India’s dynamic economic landscape.
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