DPDP rules trigger structural re-engineering in performance marketing

The government’s newly notified DPDP rules, with some provisions like the Data Protection Board, effective immediately and others taking effect at 12 or 18 months, have set off a wave of checks across India’s performance marketing ecosystem. Early indicators suggest this will be a foundational shift rather than a compliance-level adjustment.

The industry stares at a 60–80% drop in targeting accuracy across behavioural, cross-site and lookalike segments. Besides, retargeting pools may shrink to one-third of their current size, and even this pool could become unusable without explicit consent. The impact of turbulence in the next few quarters could be in the range of Rs 8,000–10,000 crore, experts say.

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Dr. Vikas Katoch, Founder and CEO of Adomantra, a digital marketing company, describes this moment as a multi-stage realignment. “With the rules tightening access to user-level signals, brands and agencies must “revisit each touchpoint at which user data is being collected: lead forms, landing pages, tracking pixels, app permissions, and CRM integrations.”

The short-term effect, he notes, will be a temporary dip in retargeting depth and optimisation efficiency. But he sees clear benefits emerging: “This period will also clean up non-compliant data flows, eliminate redundant trackers, and build consent-backed first-party data systems.”

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Over the medium term, Dr. Katoch expects “structural re-engineering” in performance marketing as contextual advertising, AI-driven predictive audiences, and cohort-based segmentation take centre stage in a world restricting non-consented signals. “Attribution models will continue to evolve, moving from last-click dependency toward multi-touch journeys based on consented data,” he adds.

Lalit Sharma, Founder of Ranking by SEO, a digital marketing firm, warns that the industry may witness “easy and quick disruptions across both retail and wholesale e-commerce advertising, from programmatic adtech, and third-party data ecosystems”. Sharma says India has long needed stronger personal data safeguards, noting that the ecosystem has historically operated with “images, voice, locations and app content being tapped without adequate user knowledge or consent.

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These rules have the real authority to impact performance algorithms by demanding verifiable consent, purpose limitation, user control, right to erasure, data minimization, and algorithmic accountability, Sharma explains.

With penalties touching “three-digit crores,” he believes compliance must now be treated as “a business imperative rather than just a legal one”.

With India’s digital ad spend surpassing Rs 50,000 crore in 2024 and e-Commerce media pocketing nearly one-third of it, the next phase of growth lies in collaborative, privacy-safe measurement ecosystems, where brands, agencies, and platforms pool anonymised data to reconstruct customer journeys with greater accuracy.

“The turbulence of the next few quarters will give way to a more sustainable, transparent, and consent-led performance marketing system. First-party data pipelines will become central to competitive advantage. Attribution will become less dependent on last-click logic and more reflective of real user journeys,” experts noted, adding that publishers will mature into high-integrity sources of authenticated audience pools. And algorithms—trained on cleaner, permissioned data—will ultimately deliver more dependable insights.

Brands deploying CMPs & silver-side tagging

To address the issue, leading brands have initiated full inventory audits across websites, apps, landing pages, and MarTech tools. Consent notices and privacy policies are being rewritten to ensure clarity, specificity, and ease of withdrawal.

“Brands are actively overhauling their consent interfaces, ensuring that analytics and ad tags fire only after explicit user approval. Many have also begun auditing (Customer Relationship Management) CRM systems, removing non-consented profiles, and strengthening data retention practices to align with lawful-purpose requirements. These are not theoretical intentions; large advertisers in India have already started deploying Consent Management Platforms (CMPs), server-side tagging, and consent-based data segmentation,” says Meher Patel, Founder of Hector, a platform for campaign optimization and data analytics for e-commerce and quick commerce.

Agencies are similarly formalising their compliance playbooks. Advertisers uploading customer lists into platforms such as Amazon Marketing Cloud, Meta Custom Audiences, and Google Customer Match must now ensure they have verifiable consent or another lawful basis for processing that data under the DPDP framework, Patel adds.

Contrary to perception, upgrading CRM and consent-management platforms is neither complex nor prohibitively expensive, says Pranjal Srivastava, Co-founder of software firm SmokeTrees Digital. He adds that DPDP compliance may require additional investments of a few lakhs, depending on the size of the business.

Algorithmic Consequences

For many agencies, the immediate reality is an environment with fewer personal data signals powering performance algorithms. Sayak Mukherjee, Founder of Brandwizz, notes that “DPDP will reduce the amount of user data available for targeting, which means smaller retargeting and lookalike audiences”. In the early phase, he says brands will have to rely on “strong creative, broader audience targeting, and their own first-party data instead of detailed behavioural tracking”.

Algorithms, too, will adjust. “Algorithms will receive fewer personal data signals, so they will rely more on in-app behaviour and broader patterns instead of precise tracking across apps and websites,” Mukherjee explains. While he believes platforms like Google and Meta will eventually recalibrate, the shift away from hyper-targeted micro-segmentation is already underway.

In the near term, he expects a fundamental pivot toward consent-led marketing. “The DPDP rules can bring forth an elementary shift in the performance marketing sector from a first-hand data ecosystem to a reliance on third-party data to a consent-led approach,” he says, adding that this may initially lead to “low revenue, initial discontinuation” before settling into a more trust-driven framework. Algorithmic changes will be significant too.

Reset Moment

Experts believe that DPDP is not a setback—”it’s a reset.”

Sharma highlights the future shape of retargeting and AI-led innovation. “Retargeting is likely to be a publisher-defined bunch of teams rather than individual-level monitoring and tracing using third-party cookies limited to consented,” he says.

Sharma further says that reliance on “lookalike audiences” built on expansive third-party data sets will diminish, with artificial intelligence stepping in to offer enhancements such as “Synthetic Data Generation, Implementing XAI Tools, Automated Auditing and Monitoring, Security & Breach Readiness, Training and awareness.”

Mukherjee calls the DPDP rule “much-needed enforcement in India” that will drive “enhanced performance marketing reshaping”.