Your favourite brands are advertising all over e-commerce portals; Here’s why

As e-commerce platforms continue to register increasing ad revenue, brands have come knocking on their doors this festive season.

E-commerce advertising, a sophisticated mix of creativity and data analytics, has emerged as the cherished linchpin for brands during the country's festive season. The avenue has become a staple tool for performance marketing, heralding a new era of brand engagement and consumer delight.

According to the recent EY FICCI report, e-commerce platforms earned advertising revenue of INR 70 billion, crossing 14% of total digital advertising (12% in 2020). It is expected to reach INR 150 billion by 2025. 

Globally, e-commerce advertising is also seeing an upswing. Amazon, in its latest financial results, revealed that its ad business has registered more than $12 billion in revenue globally for the third quarter, a 25 percent surge year-on-year. 

Against the backdrop of India's kaleidoscopic festivals, brands across the subcontinent have embraced this digital juggernaut, recognising its ability to forge connections with the discerning Indian consumer. And the numbers are a solid indication of this. 

Aruni Panda, vice president of digital, North & East, Carat India, points out that e-commerce advertising, especially during the festive season sees a high frequency of brand participation. He says, “The frequency of brands participating in e-commerce advertising during festival season sales is very high. These sales are seen as a great opportunity for brands of all sizes to reach a large number of potential customers, generate significant sales, and compete with larger brands.”

According to a study by RedSeer Consulting, over 90% of brands in India participate in e-commerce festival season sales. The study also found that the average brand spends over 10% of its annual advertising budget on these sales.

What stands out, about this avenue, is its ability to level the playing field for brands of all sizes. Smaller and medium-sized enterprises, who in the larger scheme of things can’t match bigger enterprises dollar for dollar, find a level playing field in e-commerce advertising to take on the big shots.  

Panda explains, “User ratings and reviews play a significant role in how products get showcased on e-commerce platforms. A relatively smaller brand having more popular products will have better visibility than a less popular product from a bigger brand. These platforms also provide access to a large and ever-increasing digital marketplace to brands that may have a limited geographical presence.”

Kanishka Jain, who is the director of Incredible Indriya, a D2C conglomerate, says that the cost-effective strategies that can be employed in e-commerce advertising play a crucial role in allowing smaller enterprises to shine.

She says, "E-commerce advertising significantly levels the playing field. For instance, our perfume brand, Eze, has been able to reach its target audience with precise targeting and cost-effective strategies through e-commerce. Through platforms like social media and search engines, we can ensure our unique offerings are visible to potential customers, allowing us an equal opportunity to reach the customer during the festive season."

Breaking the clutter

E-commerce platforms today offer different advertising opportunities - from the regular promotion of products to innovative use of packaging and the platform. Furthermore, the metrics-driven nature of e-commerce advertising empowers brands to measure their impact with unprecedented accuracy. Click-through rates, conversion metrics, and consumer engagement analytics form the bedrock upon which marketing strategies are refined and perfected. 

But as is true for other modes of advertising during the festive season, e-commerce advertising also accumulates a clutter of advertising hotchpotch, that could be of detriment to individual campaigns. 

Girish Ramachandra, founder & CEO, of Shopalyst, highlights that the accentuated advertising efforts from brands during the festive season could fall on deaf ears if certain metrics aren’t considered. He says, “Limited attention spans of shoppers has become a perennial problem, and gets further aggravated during festive sales. Brands that employ a data-driven approach to audience targeting and personalisation see higher returns on their ad spends (ROAS). Key metrics that brands monitor include Cost Per Reach and Cost Per Sale.”

The festival season, a time of unparalleled exuberance and gaiety, witnesses a monumental surge in consumer spending. It is during this period that e-commerce advertising emerges as a transformative force, enabling brands to elevate their presence. But, in the age of omnichannel marketing, how do brands synchronise their e-commerce advertising efforts across various platforms and devices during festive seasons?

Ramachandra answers, “Data integration plays a vital role in ensuring brands' synchronisation. The use of customer data and analytics helps to create a clear understanding of customer behavior across different channels, leading to informed insights. By doing so, brands can customize their advertising to individual preferences and behavior, giving a comprehensive view of the customer journey.”

To achieve this, brands use customer segmentation, AI-driven recommendations, and dynamic content delivery. Ramachandra adds, “Personalisation is key here, sending the right message, at the right time, to the right audience, irrespective of the platform or device they're using.”

Challenges

While e-commerce advertising appears to be a solid supplement to brands in their festive campaigns, some challenges can hinder the efficacy of these platforms as well. Shweta Sharma, partner & CBO at Adglobal360, points out that an online marketing place can often alter its interface, where the advertisements can be compromised.

She says, “Every platform has a unique interface and thereby a unique shopper journey. The biggest challenge brands face is their brand imagery and product information being distorted by UI/UX updates at the e-Tailer’s end without any prior intimation to the brand. This further leads to product returns, poor ratings by customers, and increased cost of reverse logistics that hurts the brand significantly.”

To overcome these challenges, brands need a strategy that combines data analytics and human oversight. Sharma adds, “Digital shelf tracking tools like eBuX help mitigate such issues by providing in-store audit reports that enable visibility of the brand’s portfolio across all eTailers. These reports help with gap analysis of the digital shelf which can then be actioned by the brand to ensure a consistent and rich shopper experience across all channels.”

Kushal Budhia, Chief Category Officer at Pepperfry, opines that the struggle for brands in the e-commerce space is to identify the necessary channels for advertising, and then stay consistent with the proposition.

He says, "Brands encounter challenges in customizing their messages to suit the varying formats of different online platforms. The key challenge lies in identifying which channels possess the correct audience alignment for their brand propositions. To overcome these challenges, brands conduct meticulous audience research to determine where their target audience is most active. They then tailor their messages to resonate effectively with the unique characteristics of each platform, while still maintaining a consistent brand."

It is one thing to identify e-commerce platforms as a boon to festive advertising. But what are the creative elements that go into making the stand-out e-comm ads? Vinod Kunj, Founder and CCO at Thought Blurb Communications, says that the festive sales are essentially catalogue and sale advertising. “The messaging is meant to communicate sales advertising. Very few branding ads are floated in this period. This field is usually led by the e-commerce platforms. They create the sale events, and the brands advertise in tandem.”

In most cases, the e-commerce platforms paint their message with a very broad brush across all media and all channels. Kunj adds, “The individual brands are a little more judicious with their media planning. They advertise where their audience is mostly concentrated.”