This festive season has seen the emergence of e-commerce as a category boosting a massive upsurge in ad spends. According to a recent article on exchange4media on the festive ad spend on television was estimated to increase by around 20-25% (Festive windfall for broadcasters; ad spends increase by 20-50%). One of the major reasons for this growth in festive ad spends was attributed by television players to the contribution from the ecommerce as a category.
E-commerce TV ad spend bonanza this festive season
According to media reports e-commerce during October contributed around Rs.200 crore in ad spends. While some ecommerce brands increased their ad spends by around 30%, there were others who doubled their ad spends during the festive period.
Speaking about this Kashyap Vadapalli, Chief Marketing Officer, Pepperfry.com said, “Pepperfry launched its first campaign this festive season. It was an integrated brand campaign that featured a series of high impact TVCs supported by a 360-degree media mix consisting of Print, Digital, Outdoor, Radio, Social and On-Ground Activation. Earlier, our concentration was on Digital and the spends for it were increased by 30%.”
Vikram Chopra, Founder & CEO, Fabfurnish.com said the ad spends during this festive season increased by 500%.
Naveen Kukreja, Group Chief Marketing Officer, PolicyBazaar.com said that they had more than doubled their ad spends this festive season from last year.
According to Radhika Ghai Aggarwal, Co-founder and CMO at ShopClues.com, “Our ad spends grew significantly this festive season since we launched our first-ever mass-media campaign, which included an innovative TV commercial supported by radio and digital ads. Till now, we had only used cost-effective media like digital and social for building our brand – with the addition of television, our ad spend more than doubled in the festive season.”
The increase in funding received from private investors by e-commerce players has resulted in a tremendous growth over a short period, further enabling them to spend on marketing themselves aggressively in order to drive further growth in the market.
TV takes the big pie
A major share of their ad spends went towards television. This comes as no surprise as TV gives them the reach that is required for a brand wanting to scale up the brand’s name as well as build some level of trust.
“Our major portion of the ad spends were towards TV. The medium accounted for over 80% of our total ad spends,” said Kukreja.
This was the same with another ecommerce brand Fabfurnish.com as Chopra said, “A major portion of our festive spends went towards TV and that constituted 60% of the total ad spends.”
“TV was the highest at about 40% followed by Outdoor, radio and digital which were at par. Print formed a very small component,” said Vadapalli.
“Our TV campaign took the biggest chunk of our ad spend this season, over 70% of the pie,” said Aggarwal.
This was echoed by a majority of the television channels that said they had received ad spends from large spending categories such as FMCG, auto and mobile phones, but what increased their ad spends significantly was the emergence of ecommerce as a brand category. While some networks such as MSM said they had seen almost 15-20% contribution of ad spends from ecommerce brands during the festive period, there were other TV broadcaster networks that pegged it was around 10-12%.
Rohit Gupta, President, Multi Screen Media in an earlier article had said that though contribution of ad spends came from different brand categories mainly FMCG, mobile, auto and telecom, ecommerce had significantly spent of their network and had added to the revenues.
Similarly, Ashish Sehgal, Chief Revenue Officer, ZEEL while mentioning that categories such as FMCG, auto and mobile maintained their brands spends during this festive period, the contribution from ecommerce, which was pegged by him at 10-12%, added to the increase in revenues for their network during this period. This estimate of ad spends from ecommerce was also echoed by Lavneesh Gupta, COO, Reliance Broadcast Network.
News broadcaster networks felt that traditional brand categories such as FMCG and telecom ad spends during the festive season were below expectations, but new brand categories such as ecommerce in particular had done well for them (Broadcasters' ad revenues up by 20-25 per cent this festive season). Speaking about this Ashok Venkatramani, CEO, MCCS in an earlier article for exchange4media said, “Yes they (ecommerce) have really splurged and that has helped. They have probably been helped by fresh funding.”
Similarly, Ritu Dhawan, Managing Director, India TV reiterated that ecommerce players have been top spenders this festive period and said, “E-commerce is still a sunrise sector in India which is witnessing rapid growth, and big advertising is characteristic of this stage in a business life cycle.”
What does the future ad spend trend look like?
Ad spends from the ecommerce category are expected to touch Rs.1000 crore by the end of the year and is further expected to double in the forthcoming year (Will e-commerce TV ad spends continue to rise beyond the festive season?). From ad spends which touched around Rs.200-300 crore during the entire previous year, this category is regarded as the fastest growing industry that has doubled from a Rs.9,000 crore industry to Rs.18,000 crore today. It is expected to touch Rs.2.1 lakh crore by 2020 according to Technopak. And TV as a medium is expected to a key benefactor from ecommerce brand spends.
Speaking about this Vadapalli said, “Going further we plan to increase our ad spends on TV and in our overall outlay for our next campaign, TV will have the largest component.”
Chopra said that their ad spends on TV are expected to increase by at least three times in the next six months.
Similarly, Kukreja said, “While we are looking at exploring other mediums to build the brand, our share of spends on TV will continue to be higher. They are expected to increase by 25-30% going forward.”
While Aggarwal says, “TV is the most effective medium for mass-reach – it helps in brand-building and in talking to new customers. We will leverage it as and when there is a business need.’
Powered by the festive season, ecommerce brands which are keen to make an impact on the industry are likely to spend more of their marketing budgets on mediums such as television which offer them instant reach.