The E-Commerce Site as An Advertising Channel Is Here

eCommerce website as an advertising channel

eCommerce websites have become exponentially popular worldwide, especially during the global lockdowns spurred on by the worldwide pandemic. Amazon has over 300 million active customers worldwide. Flipkart has more than 200 million users registered onto its platform. Wouldn’t it be amazing if digital marketers could reach out to this growing group of people? Yes, it would – and that’s what’s happening! 

eCommerce Is Consistently Growing

According to Statista, the Indian e-commerce market alone is estimated at $64 billion in 2020 and is projected to touch $200 billion by 2027. Globally, the e-commerce market is set to grow at a CAGR of 16% from 2021 to 2026. This growth is an indicator of changing consumer behavior. There will be new shoppers on these platforms, and existing shoppers will increase their online spending. These platforms have become the new arbiters of brand communication battles.

This poses several questions for brands to address. Foremost among them is how to catch the eye of these consumers on the platform? How to ensure the people patronizing the eCommerce platform make their way to their product pages and pick them over any competing product?

How Are Products Being Advertised?

  • In the Asia Pacific, the Amazon DSP is present in India, Australia, and Japan. The Amazon DSP is a demand-side platform that lets advertisers programmatically purchase video, display, and audio ads both on and off the website.
  • Flipkart launched its commerce-focused DSP. It helps brands meet their ad goals through a self-serve platform. This has an end-to-end campaign management feature.
  • Paytm has a flourishing digital advertising business with three ad formats. Advertisers can use on-platform display ads, product listing ads, and the Paytm DSP.

Thus, similar to other online platforms, ad spend on e-commerce websites is distributed amongst social media, display, video, paid search, classifieds, and others. Major eCommerce platforms have their own DSPs too. One exciting development is that brands can use these to launch a campaign outside the e-commerce platform too. Earlier, if a brand were targeting a user on Amazon – they would only reach her on the platform itself. 

But now – marketers can also target her outside Amazon – watching a show, reading the news, or listening to music. That gives marketers a 360-degree funnel. 

Another new feature is that previously marketers could not see if the user had purchased the product, added it to her cart, or tried a competitor’s product. Now – the eCommerce DSPs give marketers insight into this, too. 

Are eCommerce Platforms Effective As Advertising Channels?

Amazon, Flipkart, Snapdeal, and Paytm have emerged as crucial advertising channels. In the Indian digital ad market, ad spends on e-commerce platforms was projected to have touched Rs 4,700 crore in 2020. It’s expected to grow at a CAGR of 40%. Advertising on e-commerce platforms accounted for 12% of total digital ad spend in 2020, according to a 2021 FICCI-EY report on the M&E sector. 

Marketers are giving positive reviews in working with the eCommerce DSPs. Some say they have achieved a return on ad spend (ROA) about 2-3 times the initial ad investment. A spokesperson from Paytm noted that over 200 advertisers had used their ad platform. They say their DSP provides users with solutions for performance and brand advertising. They have a large consumer base, and in India can help brands from various industries – including finance, FMCG, retail, gaming, auto, and more.

Thus, we can deduce that advertising on these DSPs is proving beneficial for brands and advertisers alike. That’s spurring the growth of ad spend on these platforms.

What Makes eCommerce as an Ad Platform Work?

Many factors drive the success of these platforms. One is that marketers can tap into a group that has a higher intent to purchase. Plus, it’s easier for marketers to create personalized ads that will result in higher conversions. Additionally, the pandemic encouraged people to put more focus on product search. All this is what inspired the major eCommerce platforms to create their own DSPs.

A spokesperson from Snapdeal said that e-commerce advertising is viable because it allows customers to click on ads, know more about the products, gain access to product videos and user reviews, and then transition to purchasing the product with ease. That creates much value in the customer buying journey.

Another point to note is the rise of ‘value commerce’. Today, customers are less impressed by brand awareness and more influenced by functionality, combined with value pricing. That’s great for small-scale sellers and young brands. This allows them to create feasible advertising and sales campaigns – rather than engage in expensive brand-building campaigns. 

Other additional benefits include advertising to non-metro cities – where a large chunk of the spending population resides.

eCommerce Advertising Is Here to Stay

It looks like advertising on eCommerce websites offers immense value. Online retail is no longer limited to major cities as suburbs and non-metros have a growing number of potential customers. Features such as user reviews and rating systems also play a massive role in adopting lesser-known brands. Around 95% of customers read reviews before buying a product. Plus, when customers are on an e-commerce or affiliated platform, the chances are that they’re in the right mental frame to consider purchasing products. 

Brands and digital marketers alike must take this opportunity to learn how to maximize their online efforts best using these platforms. Failing to do so is not an option, as it would mean being left behind.

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