Flipkart Executive: "Commerce Advertising is the Future"

"The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself." Sounds impossible? Let's figure how to make this quote from Peter Drucker a reality.

Over the last decade, we have made significant progress in understanding and deconstructing every element of digital advertising. Marketers, today, have a slew of solutions with which to measure and track every aspect of their advertising strategies. However, despite high levels of measurability and a variety of options, I find that there is ongoing confusion about the right digital marketing strategy. Typically, a marketer struggles to optimise between reach, intent, and context. Unable to solve this marketing triad, most advertisers end up with not-so-ideal marketing plans.

In their pursuit to reach out to consumers, marketers often tend to aim for a broader audience, and are able to grab eyeballs and millions of clicks on their ads. But, in the process, marketers reach out to many who are not part of their target audience. And, therefore, not all clicks convert to a successful sale, and unfortunately, bring down the RoI on ad spends.

The second biggest problem in advertising is that people hate advertisements. We all have our own experiences with nagging ads. For instance, website pop-up ads have been used by digital marketers to display new product launches and collect user information for lead generation. Users find a majority of pop-up ads intrusive and out of context, and view them as interruptions in their viewing experience since their webpage access is blocked by an ad irrelevant to them.

So, how does one solve this problem? Finding the relevant audience is the fundamental starting point, which surely sounds like a great strategy. However, the concept of right target audience is constantly evolving. Until the last decade, it was demographics. Now, in order to convert more clicks to actual sale, marketers typically ensure that ads are shown to consumers when they have relevant intent.

Commerce platforms have this intent data at scale, and hence, can enable targetting at a massive scale. Moreover, these platforms can effectively use all the information about a customer's past purchase history and preferences. To understand this better, take an example of a customer who has been buying diapers recently. Let's say this is further augmented by some more baby product purchases. There is a high probability that the customer in focus is a young parent, and relevant brands armed with this valuable insight will be able to target their communication specifically towards this customer for this unique life stage she/he is in.

Once a consumer's purchase intent has been established, the next important part of the marketing triad is to be contextual. Statistics reveal that consumers love engaging with branded content, and conversions have doubled when a brand's endorsement is put behind a product. This understanding is extremely important for marketers to choose amongst various native advertising options. Native ads are not just a format, but an end-to-end experience -- an experience where ads blend seamlessly with the core objective with which a user engages with the medium. Commerce advertising scores really big here. In a store environment, a user is out to engage with various brands and products, and hence, if rightfully delivered, ads become very contextual. We have seen four times the engagement against market benchmarks at Flipkart, and this stands as a testament to the power of commerce advertising. A consumer who sets out to make a transaction, reads about a product, compares it with others, finds out about new trends and technologies, and then eventually makes a purchase - all from within a commerce platform. This provides marketers the unique opportunity to engage with potential buyers across the purchase funnel.

Swipe Technologies, a new entrant in the budget category of smartphones, leveraged Flipkart's website, as well as its mobile application platforms for the launch of Elite Note, its new phone. Ads, targetted at a specific demographic segment, showcased outstanding features of the product along with value proposition. This led to a 286 per cent jump in its product page view. The targetted promotion garnered an engagement rate of 14.6 per cent, which resulted in a sales increase of 136 per cent. By engaging with consumers natively within a commerce platform, brands can not only channelise their messaging better, but their advertising appears to be non-intrusive to customers as it is blended with the platform's browsing experience.

The last leg of the marketing triad is scale. Flipkart recently announced 100 million registered users with the number increasing exponentially. E-commerce companies are committed to take their value offerings to billions of Indians. This means, over the next decade, e-commerce companies will continuously expand their reach and influence. Moreover, it's important to understand the quality of this reach. These are paying customers who have disposable income and a willingness to buy. Hence, when one considers the share of wallets such a reach can influence, it's unparalleled.

Relevant contextual ads are a win-win scenario for both the marketer, as well as the consumer. The consumer gets the information that interests him/her, while the marketer gets to target a consumer whose probability to make a purchase is high, and thus, can influence his/her purchase decision. Commerce advertising is the only platform that marries relevance and context at scale, thereby solving the marketing triad with great ease. This, coupled with strong campaign performance analytics, is making it a top choice among advertisers. It continues to open up marketing opportunities. It would be interesting to see how the brand co-innovates and makes the most of this platform.

(The author is business head, Flipkart Ads Group)