Top 5 App Verticals That Must Use Programmatic Advertising in India

In India's rapidly growing digital landscape, programmatic advertising is emerging as a pivotal strategy for app developers and marketers. It leverages automation and data-driven insights to optimize ad spending and reach the most relevant audiences. As smartphone penetration and internet usage continue to surge, programmatic advertising provides an efficient and scalable way to tap into this vast market. 

Despite its many advantages, the share of programmatic advertising remains low among Indian marketers. According to the Dentsu e4m Digital Advertising Report, programmatic advertising accounted for 42% of the total digital ad spend in India, which translates to approximately $2 billion in 2023.

We’ve recently discussed why Indian marketers must embrace programmatic advertising. (You can read it here). In this blog, we delve into why the top five app verticals in India (by market size) should embrace programmatic advertising to drive growth and enhance user engagement.

                                       Data sourced from Financial Express, Inc42, Business Wire, IBEF. Graph is adjusted to logarithmic scale

1. eCommerce

The Indian eCommerce market is projected to reach approximately over $100 billion by 2024 and is expected to grow at a CAGR of about 27% till end of this year. In 2023, the number of annual online shoppers was estimated to be about 250 million across India. With millions of consumers increasingly relying on online platforms for their shopping needs, programmatic advertising enables eCommerce apps to deliver highly personalized ads to potential buyers, based on their browsing history, purchase behavior, and demographic information. This personalization is crucial in converting casual browsers into loyal customers.

Why Programmatic:

• Precision Targeting: Segmentation based on buying patterns, preferences, seasonalities, and interest-based cohorts offer more precision for advertisers to target customers.
• Real-time Optimization: Techniques like deep-linking and DCO allow you to make real-time adjustments based on user’s action. Using specialized retargeting techniques, advertisers can optimize users who have added items to cart, browsed products, or make repeat purchases..
• Cost Efficiency: Making efficient optimization decisions helps to optimize ad spends and achieve a higher ROI. In peak festive season when customers tend to shop more, advertisers can manage their campaigns for more longevity with more control over budgets, placements, creatives, and campaign duration to not only optimize for ad fatigue but also ROAS.

2. Mobile Gaming

The mobile gaming industry in India is booming, with a diverse audience spanning various age groups and demographics. From RMG to role play games, from skill-based to casual gaming, the Indian gaming ecosystem has grown significantly. In 2022, Indian gamers reportedly spent an average of 8.5 hours per week on mobile gaming apps, which translates to about 1.2 hours per day. The mobile gaming market in India is projected to reach $6 billion by 2028, up from $3.1 billion in 2023, highlighting a robust growth trajectory.

As the gaming audience grows, programmatic advertising is an effective medium to reach the right players at the right time, enhancing user acquisition, transaction size of money-based games, and retention. Having the right ad strategy also helps to boost LTV for gaming apps, which is crucial in a fiercely competitive segment such as this.  

Why Programmatic:

• Dynamic Ad Formats: Gaming apps can use programmatic advertising to deliver interactive and engaging ad formats such as rewarded videos and playable ads, which are highly effective in capturing the attention of gamers.
• User Retention: By targeting ads to specific user segments, gaming companies can attract high-value players and improve retention rates.
• Cross-promotion: Gaming studios can leverage programmatic advertising to cross-promote their other games, maximizing user engagement across their portfolio.

3. FinTech

The FinTech industry in India is booming with the rise of digital payments and online banking. This quick embrace of digital payments has allowed UPI to become the main catalyst behind the digital payments category, responsible for nearly 80% of the total digital payment volumes in India, with transactions reaching over 130 billion in FY 2023-2024. Besides these, there are also insurance apps that make it easy to buy and manage insurance policies further fueling the expansion of the financial services industry. The Indian InsurTech market is expected to grow at a CAGR of 46% from 2021 to 2026. 

For FinTech apps looking to stand out in a crowded market, programmatic advertising offers the tools and capabilities needed to effectively reach and engage target audiences. The strategic use of programmatic advertising is crucial for FinTech apps to maintain relevance, drive user adoption, and achieve sustainable growth in an increasingly competitive and dynamic market.

Why Programmatic:

• Targeted Messaging: FinTech apps can use programmatic advertising to deliver targeted messages that address specific financial needs and pain points of users.
• Brand Safety: Programmatic platforms offer advanced tools to ensure that ads are placed in safe and relevant environments, minimizing ad fraud, protecting the brand's reputation.
• Data-Driven Insights: By leveraging data, FinTech companies can gain valuable insights into user behavior, allowing them to refine their advertising strategies.

4. Health & Fitness

Health and fitness apps continue to be among the top 5 fastest growing app verticals in India. With a crowded market space in the HealthTech sector that encompasses fitness apps, health trackers, physical and mental wellbeing, diagnostic apps, and pharma, it's more important than ever before for marketers to tap into the right users.

Why Programmatic:

• Personalized Campaigns: Health and Fitness apps can deliver personalized campaigns based on users' fitness goals and preferences.
• Higher Conversion Rates: By targeting users who are already interested in health and fitness, these apps can achieve higher conversion rates.
• Real-time Analytics: Programmatic platforms offer real-time analytics, allowing health and fitness apps to optimize their campaigns for better performance.

5. Food Delivery & Hyperlocal

Food delivery and hyperlocal sectors in India have rapidly gained traction in India, catering to consumers' demands for fast delivery of food on-demand and everyday essentials. In the food delivery sector, mobile platforms are making a noticeable impact. Hyperlocal delivery models are thriving as they offer faster service and personalized experiences by focusing on specific geographical areas, going beyond Metro cities and connecting more consumers to local businesses and service. 

Why Programmatic:

• Real-time Targeting: Apps under this segment can target users based on their location and delivery preferences, ensuring that ads are relevant to their immediate needs. Dayparting techniques ensure that your users have the right nudge at the right time of the day, ensuring greater possibility of engagement and conversion.
• Customer Engagement: By delivering personalized ads, food delivery and hyperlocal apps can enhance user engagement and drive repeat purchases.
• Improve Retention Rates: Programmatic advertising allows to efficiently scale the campaigns, retain users, improve engagement by targeting specific times of the day with offers, keeping users motivated to use the app more frequently.

Getting Started with Programmatic Advertising for Your App Vertical

From targeting the right audience segments to selecting impactful creatives, programmatic advertising offers the precision and scalability needed to thrive in today’s competitive app market. While challenges on navigating decisions around optimizing budgets, handling vast data sets, and the right creative optimization, may seem formidable, a well-chosen Demand Side Platform (DSP) can simplify these tasks. As mobile usage continues to rise and digital behaviors evolve, programmatic advertising offers the flexibility and intelligence required to adapt to changing market dynamics. Embracing programmatic advertising enables mobile app marketers to harness the power of technology, making their campaigns more efficient and impactful in driving growth and engagement.

Want to explore real-world case studies and see how brands in your space have found success using mDSP? Explore here and contact us for your customized growth plan!