How smartphone security could shift ad power

Most mobile advertising works best when nobody is looking.

Targeting adjusts in the background. Frequency caps tighten or loosen invisibly. Retargeting pools quietly refresh themselves based on signals users never actively see or approve. Over the years, this ambient optimisation layer has become so normalised that few marketers stop to question how much of mobile performance depends on background access to sensors, permissions and operating system behaviour.

That’s the scale context for why restrictions around background access, permissions, and OS-level behaviour matter: they don’t just tweak privacy posture, they potentially reshape the signal and distribution mechanics that a very large share of India’s performance marketing machine currently runs on.

On the consumption side, India’s smartphone base was estimated at around 690 million users as of late 2025, and internet users were expected to cross 900 million in 2025. This is why “mobile-first” is not a slogan here, it’s the default distribution layer for advertising.

India’s proposed smartphone security rules threaten to disturb that quiet.

Read On: India’s new smartphone rules and the future of mobile advertising

On paper, the changes sound technical. Tighter controls on background access, greater scrutiny of permissions, and more oversight of default software behaviour. In practice, they touch the invisible machinery that keeps mobile advertising efficient, scalable and predictable. And while no one expects the ecosystem to collapse, several industry leaders say the rules could subtly reshape where advertising power sits between platforms, OEMs and the broader adtech stack.

For many practitioners, the first reaction is familiarity rather than alarm.

“We’ve already been through this dance with iOS,” says Gopa Menon, COO and Co-Founder of The Blurr. “Apple tightened the screws with ATT and the industry didn’t collapse. It evolved. If India goes down a similar path with Android, this is a shift, not a crisis.”

Menon says the immediate impact shows up in execution before strategy. “Attribution gets messier. Real-time bidding becomes less precise. Retargeting windows shrink. But a lot of mobile targeting was already moving towards on-device processing and contextual signals anyway. The smart money has been preparing for this.”

Where the pressure becomes more visible, he adds, is on smaller adtech players that rely heavily on background data feeds. “They don’t have the engineering depth to retool quickly. The big platforms will pivot. They always do.”

That imbalance is central to how power ultimately redistributes.

“Platforms don’t lose leverage from privacy regulation,” says Yaron Tomchin, CEO of Mobupps. “They consolidate it.” Drawing on previous cycles like GDPR and Apple’s ATT framework, Tomchin argues that tighter rules tend to squeeze independent adtech first, not dominant ecosystems.

The main issue is that India’s mobile advertising engine is big enough that even “technical” smartphone rules can have downstream consequences for marketing budgets. By FY2025 (April 2024–March 2025), India’s total ad spend was estimated at about ₹1.11 lakh crore, with digital at roughly ₹49,000 crore, already the single largest medium.

And within digital, mobile is doing most of the heavy lifting: industry estimates like Ipsos put mobile platforms at over 78% of total digital media spends in 2025, which implies a mobile ad market in the ballpark of ₹38,000 crore when using the FY25 digital total as the base.

“When third-party access tightens, spend moves toward environments where deterministic targeting still exists,” he says. “Google and Meta own first-party relationships at scale. They adapt their models, strengthen aggregated and predictive optimisation, and advertisers follow because alternatives at that scale are limited.”

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In Tomchin’s view, the real shift is not about control disappearing, but about where it sits. “Independent adtech gets squeezed. Platforms rewrite the playbook. Everyone else adjusts.”

For agencies and brands operating closer to campaign delivery, the change feels less existential and more operational.

“Tighter background access reduces the reliability of passive signals mobile advertising has depended on for years,” says Sini Magon, COO and Global Partner at Grapes Worldwide. “The immediate impact is on attribution accuracy and frequency control rather than reach. Optimisation feedback loops slow down.”

But Magon frames the disruption as a reset rather than a loss. “This pushes the ecosystem towards stronger first-party data strategies, sharper contextual relevance and more agile creative optimisation. Teams that already work with cleaner data and clearer measurement adapt faster. Those still dependent on opaque, short-term signal harvesting struggle.”

At a technical level, the mechanics of optimisation change in ways that are easy to underestimate.

“Mobile optimisation today happens behind the scenes,” says Jacob Joseph, VP of Data Science at CleverTap. “Adjusting when ads appear, how often users are reached, who stays in a retargeting pool, and which creative gets served, based on ambient signals collected outside active app use. Tighter rules make that always-on fine-tuning harder.”

As background access reduces, Joseph says optimisation shifts decisively toward active behaviour. “Decisions get driven by what users do when they’re actually in-app. Sessions, actions, responses and permissioned intent signals take precedence. Retargeting windows shorten. Teams have to be more deliberate about timing, relevance and engagement rather than assuming continuity.”

The changes also reignite debate around OEM-level inventory and default placements, often touted as beneficiaries of tighter OS-level controls.

Read On: Ad by Default: How OEMs became media giants

“There’s a tendency to overstate this,” says Tejas Maha, Associate Director of Media. “OEM inventory gains relative value because of proximity and guaranteed visibility, but performance still depends on engagement. Default placements don’t automatically translate into persuasion.”

Maha adds that advertisers are likely to scrutinise outcomes more aggressively. “Power comes from performance, not proximity. If those placements don’t deliver meaningful engagement, brands will push back faster than before.”

Taken together, the picture that emerges is not one of collapse, but of recalibration.

Mobile advertising does not stop working. It becomes less forgiving. Passive optimisation gives way to intent-led signals. Creative quality, sequencing and timing start doing more of the heavy lifting. Attribution gets noisier, but also more honest.

What changes most is where certainty lives.

As ambient signal capture becomes constrained, certainty increasingly resides inside logged-in platforms and controlled ecosystems rather than across the open app landscape. That may make mobile advertising safer from a governance perspective, but it also concentrates power and pricing.

The smartphone security rules do not present themselves as an advertising reset. They arrive framed as consumer protection and software governance. But beneath that surface, they unsettle assumptions mobile advertising has relied on for years.

Nothing breaks overnight. No budgets vanish. But the invisible scaffolding that once made optimisation effortless becomes harder to lean on. And in that shift, power does not disappear. It simply becomes more enclosed, more expensive, and harder to ignore.