By Rishi Agrawal

The world of advertising has evolved over the past decade, driven by the enormous digital footprints that consumers leave behind. Adtech plays a central role here, using a collection of advanced tools such as demand, supply and data management platforms to create targeted digital advertising campaigns. By analyzing browsing history and online behavior, advertisers can now predict what consumers are looking for by targeting, profiling and classifying them. Technology has made it possible to pinpoint these factors with greater precision than ever before, making ad campaigns effective based on what to show, who to show them to, and when to show them. However, determining consumer needs and behavior is not an easy task. It requires sophisticated tools and careful analysis to ensure that ads resonate without crossing privacy boundaries. While these advances have made advertising budgets efficient, there is also the risk of companies going too far. Some may misuse the data, leading to ethical concerns about consumer privacy. This delicate balance between innovation and responsibility is where the future of advertising lies. As digital interactions grow, so does the need to establish clear guidelines that protect consumers while still allowing businesses to innovate and reach their audiences effectively.

IN Indiaadtech is protected by the provisions of the IT Act, 2000, the Advertising Standards Council of India (ASCI) Guidelines, the Consumer Protection Act, 2019 and the Telecom Regulatory Authority of India Guidelines compared with regulations that are still evolving around data protection. However, with the emphasis on consent-based practices due to the DPDP Act, advertisers are rethinking their approaches as current data collection methods will soon become redundant. Privacy policy marketing is becoming increasingly important as consumers become more aware of how their data is being used.

To illustrate how large technology companies and data managers extract data, consider how they use cookies and device IDs. A user can allow a website to track their activity through cookies, knowing that they consent. Yet big data-driven technologies can extend beyond permissions and aggregate behavioral data across devices to generate detailed consumer profiles. In a seemingly innocent conversation with a smart speaker or voice assistant, or generally around our devices with microphones, we can mention a product. Later we come across highly relevant ads for the same item on social media. This phenomenon, driven by massive data processing infrastructure, reflects how companies are blurring the line between seeking explicit consent and using implicit data collection mechanisms.

Globally, regulations such as the EU’s General Data Protection Regulation (GDPR) have already demonstrated the risks and penalties associated with non-compliance. In India’s context, adtech platforms have relied heavily on such “implied” consent, raising serious questions about consumer rights and privacy. As the DPDP Act takes hold, these practices will come under greater scrutiny. Businesses will be forced to rethink how they collect, store and process data, moving away from the “data hoarding” of the past. The consequences of non-compliance are severe, ranging from financial penalties to reputational damage. For example, large tech giants and e-commerce platforms, which rely heavily on personalized advertising, will face the challenge of navigating this new regulatory framework. In Europe, one of the biggest social media giants has already been fined for breaching the GDPR by improperly handling user data. In India, similar compliance can be expected, especially if companies do not follow new norms that emphasize transparency and consent.

While the emphasis on data privacy is a positive development, it also poses significant challenges for companies operating in the ad technology space to build consumer trust in a privacy-conscious market becomes absolutely decisive. With stricter privacy laws, where ad tech companies face restrictions on personalized ads, retargeting and behavioral tracking, which are key drivers of revenue, there is a need for companies to be innovative with their approaches by exploring non-intrusive or contextual advertising. New technology can help achieve this. For example, AI-powered algorithms can process data in a way that maintains consumer anonymity while delivering relevant ads. By leveraging an integrity-first framework, companies can not only ensure compliance but also foster deeper relationships with their customers. For example, major tech companies are experimenting with privacy-focused technology designed to replace third-party cookies, which have traditionally been used to track users’ browsing behavior for personalized advertising. These work on the principle of assigning users to broader categories or topics based on their recent browsing activity, which may include categories such as fitness, trip or technology rather than tracking users across multiple websites. Such technology creates a potential path forward for balancing targeted advertising with privacy concerns.

Balancing the burden of meeting the demands of adtech innovation is no small feat. Adtech companies are under constant pressure to adapt to privacy-driven regulations while delivering cutting-edge solutions that drive business growth. As companies innovate, regulators are focusing on creating a framework where data integrity is protected without stifling technological progress. Through collaboration between businesses and regulators, India can pave the way for a regulatory environment that encourages privacy-focused ad tech innovation while enabling businesses to deliver value to consumers.

The author is CEO and co-founder of Teamlease Regtech. (The views expressed are the author’s own and not necessarily those of financialexpress.com)