Industry POV

Advertisers have to shell out more to advertise on Amazon, Flipkart on e-sale days

22 Sep 2017

NEW DELHI: Advertisers on leading e-commerce platforms such as Flipkart and Amazon have to shell out at least twice as much as they did last year for placing commercials on these Web sites during mega promotional events, such as the Big Billion Day and the Great Indian Festival sales.

According to media planners and sellers associated with the Web marketplaces, the advertising inventory is in great demand. “The advertising business has grown two-and-a-half times this year on large e-commerce portals,” said an executive from a media buying agency.

An advertiser would have to spend anywhere between Rs 5 lakh for a smaller ad on a category page and Rs 1.5 crore on a banner, depending on the placement of the commercials, said a media planner buying advertising inventory for top brands. In total, there are more than 1,000 advertisers on Flipkart and Amazon. “Almost the entire inventory is sold,” added the media-planning executive.

At Flipkart, there were about 40-50 advertisers last year, compared with more than 200 this year during the Big Billion Day sale, and the ongoing festive season.

“The return on investment for advertising during the festive season is very high, as the traffic on the Web site during the annual sale event and the festive season has been growing 100% year-on-year and the conversion rate is up by 50%,” according to Prakash Sikaria, senior director, partnerships and monetisation, Flipkart. The company declined to share the advertising revenue it expects from the festive season.

An emailed query sent to Amazon India did not elicit any response until the publication of this report.

E-commerce sites generally charge advertisers on the basis of the number of clicks (impression) an advertisement gets, calculated as cost per thousand impressions (CPM).
During the festive season or sale events, there is an increase in the cost of advertising slots, such as banners on the home page, banners on category pages, and ads on the mobile app.

“In the past two years, sale events have gained momentum, increasing the traffic by four times,” said Mihir Mehta, associate vice president, branding and affiliate marketing, iProspect India, which is a part of the Dentsu Aegis Network.

E-commerce sites are looking at advertising as a significant revenue stream. There are two types of advertisers on such sites - those selling on the site and want to increase their sales, and those not selling on the site, but would harness the traffic on the platform to build their brands.