What India’s smartphone security push means for mobile targeting and attribution

India's proposed smartphone security rules are going through consultation-stage discussions, but they're already prompting difficult questions for marketers.

India remains one of the fastest-growing digital ad markets in the world — eMarketer projected 20.2% digital ad growth for 2025, the highest among major economies. But that growth was often built on cheap, signal-rich mobile inventory.

The new proposals — tighter scrutiny of operating-system behavior, limits on background sensor access, and greater control over how apps observe device activity when idle — would affect much of the infrastructure that makes mobile advertising work in India.

While the parts of the proposed rules concerning smartphone manufacturers sharing their source code drew government pushback, marketers told The Current that the other parts meant the direction was clear enough to force a rethink of how spend is planned and measured.

Cheap reach has been hiding the problem

For years, Indian advertisers have benefited from extremely low-cost impressions.

Digital advertising accounts for 59% of total ad spend in India, with mobile making up roughly 78% of that, according to the Dentsu–e4m Digital Advertising Report 2026. Much of that buying is programmatic and relies on device-level identifiers and app-level behavioral signals — from mobile advertising IDs to in-app activity — that enable targeting, frequency capping and attribution.

Yet even though programmatic delivers close to 88% of digital ad impressions in India, it represents only about 45 to 58% of digital budgets, per the Dentsu–e4m report.

That imbalance reflects a market where scale is abundant and CPMs are inexpensive. When reach is cheap, campaigns can afford longer learning periods because low CPMs reduce the cost of trial and error. In higher-cost markets, advertisers cannot afford extended algorithmic learning cycles.

Rahul Vengalil, CEO and co-founder of TGTHR, noted that this dynamic works in India largely because inventory remains inexpensive. In India, the system can absorb that uncertainty, at least for now. "If we were in any other country, we would have seen a remarkable impact,” he said.

Planning moves upstream

When signal quality weakens, campaigns may still deliver conversions, but marketers have less clarity about what actually drove them. AI-led modelling can optimize toward lower customer acquisition costs or higher lead volumes, Vengalil said, but that is not the same as proving incremental impact or long-term brand lift.

The uncertainty is forcing marketers to make decisions much earlier in the process. Shubhranshu Singh, who has led marketing for large automotive and lifestyle brands, said that when inferred intent gets less reliable, you can't just shift budgets at the margin. "Planning has to shift upstream," he said. Brands have to invest more deliberately in signals they actually own, he said: first-party data, customer relationships, content ecosystems.

Redesigning those customer journeys, Singh argued, is far more complex than moving money between channels. Only after you rethink how discovery, evaluation, and conversion work does the budget naturally follow.

A senior FMCG marketer echoed this, saying that what’s disappearing are the "invisible guardrails" — those passive signals that kept relevance and frequency in check. As they erode, internal debates are tilting toward certainty over reach — like commerce platforms and contextual buys.

What comes next

Contextual targeting is drawing renewed attention as signal availability narrows, Vengalil said, largely because it relies less on personal identifiers and more on content and environment. Modeling, meanwhile, is becoming central to campaign optimization — not as a perfect substitute for lost signals, but as a tool for managing uncertainty at scale.

Singh also noted that environments where intent is explicitly declared, such as commerce platforms, are gaining influence because they offer clearer signals tied to specific user actions.

Timing is on the industry’s mind. India's Digital Personal Data Protection Act took partial effect in November 2025 and is set for full implementation by May 2027. It already requires opt-in consent for marketing data processing. The smartphone proposals, if implemented, would stack hardware-level restrictions on top of that, potentially compounding the signal loss from two directions at once.

For marketers, one thing is clear: The foundation of India’s scale — cheap reach and abundant signals — is no longer stable.