E-commerce sites eye big ad monies through big sale days
Experts advice brands to spend on e-commerce platforms during discount sales.
Published - Jul 19, 2018 9:00 AM Updated: Jul 19, 2018 9:00 AM
High-octane e-commerce discount events such as Amazon’s Prime Day and Flipkart’s Big Shopping Days are quite popular among online shoppers. But for these platforms, the discount days are more than just sale generators. They are a means to earn more ad monies by demonstrating to brands the potential of e-commerce sites for targeted advertising.
E-commerce platforms attract only Rs 600 crore or around 7 per cent of the total digital ad spend in India (Rs 8,202 crore), according to Dentsu Aegis Network (DAN)-e4m Digital Advertising Report 2018.
Why e-commerce sites?
Google was the first to build a sustainable advertising model based on targeted advertising. Now, it is the turn of e-commerce sites, which have only recently opened up their platforms to advertising, to do the same.
E-commerce portals inherently have access to potent data that can make them very relevant and important to brands. “Currently, we advertise on digital based on audiences, clusters, and the impact of the property. E-commerce can add a rich data layer, offering insight into the consumer’s shopping habits. No one else can offer that kind of business intelligence,” explains Vinod Thadani, Chief Digital Officer, Mindshare South Asia.
Discount Days Are Key
Prasad Shejale, CEO and co-founder, Logicserve Digital, says he advices brands to advertise on e-commerce sites during discount events because it is the perfect time for brands to catch consumers with the intent and propensity to buy online. In fact, Shejale says that brands should definitely set aside a special budget for these days.
The other factor that makes discount days a must-advertise period for brands is the high volume of consumers visiting these sites, says Shekhar Mhaskar, EVP Isobar and Head Isobar Commerce.
If not for being present on the sites during this period, “brands will have to spend a lot more over a staggered period of time to reach the same audience. This is one time when all potential customers are at a single place,” he explains. “Many brands that work with Isobar and have a presence on these sites all year round, pump in more money during this period to be at the forefront,” says Mhaskar.
Brands rushing in to buy ad inventory during the period sees a spike in ad rates due to the high demand. According to Shejale, this surge in ad rates (programmatic) is around 10-15%.
Last year, Amazon India witnessed a three-fold surge in shopping by its Prime members on Prime Day. In the US, Amazon had a conversion rate of 18.6 per cent, 50 per cent more than its average of 12.3 per cent. To capitalise on the jump in shopping, some brands end up spending nearly 3-4 times of what they would spend on a normal day during discount periods, says Mhaskar.
He adds that this high spend is justified because the return on investment during the discount period is much higher than normal days.
Brands in the electronics and smartphone categories in particular make sure they have increased visibility during the discount period. But more brands are working with e-commerce sites.
LEGO, which partnered with Amazon to launch 16 SKUs in India this year, sold out more than 1,500 boxes in the first 24 hours.
Amit Kararia, Senior Regional Sales Manager, South Asia, LEGO, feels that opportunities like these are a win-win proposition for both the e-commerce site and brands.
“It serves as an ideal platform to create visibility for brands and products. Increased traffic on the webpage enables brands to connect with the existing consumer base as well as reach out to new potential users. Additional offers and promotional discounts further amplify this outreach,” he says.
Success during the 36-hour Prime Day or the four-day-long Big Shopping Days does not just mean a short-term success for the sites. “The platforms would be able to showcase the performance during these days as its potential throughout the year,” says Mhaskar.
The success of e-commerce sites is already shaping digital strategies. Thadani advices that brands that do not fall in the electronics, smartphone, and wearables categories should also use e-commerce platforms for strategic purposes beyond just Prime Day or Big Shopping Days. “Make e-commerce part of your digital strategy,” he says.
Thadani says that brands must take note of the potential of e-commerce sites irrespective of discount sales. Even though e-commerce sites have joined the party late, they will soon give very stiff competition to the likes of Google and Facebook. Thadani expects the competition from e-commerce platforms to grow stronger over the next couple of years.
Flip side of e-commerce advertising
Digital media buyers use many third-party tools for measurement and verification purposes. As of now, e-commerce portals do not allow any external access to their data, making them walled-gardens. “These portals are now understanding the importance of third-party verification, ad serve etc and that it is in fact a necessity in digital,” says Thadani.
He is confident that soon these portals will open up to measurement, and when that happens more brands will associate with the platforms.
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