Soon, e-tailers expected to improve ad expenditure

By: | Published: September 20, 2017 6:01 AM

While Paytm Mall, owned by Paytm E-commerce, has already announced that will it be spending close to Rs 1,000 crore in marketing, cashbacks and promotion, others such as Flipkart and Amazon, too, have released their marketing campaigns.

While Paytm Mall, owned by Paytm E-commerce, has already announced that will it be spending close to Rs 1,000 crore in marketing, cashbacks and promotion, others such as Flipkart and Amazon, too, have released their marketing campaigns.

E-tailers have shunned big-bang ad spends so far this year, drawing a stark contrast to last year’s numbers. However, with the festive season round the corner, industry watchers claim the tide could well turn. According to data released by MAP (TAM Adex), a paltry Rs 5.4 crore was spent on TV, print and radio advertising by online retailers between January and June. During the same period last year, they spent a whopping Rs 3,037.8 crore. “E-commerce companies are under a lot of pressure to turn profitable, besides the fact that the industry witnessed consolidation in the last one year. As a result, a lot of small players have either gone out of the market or are on their way out. This has resulted in a massive drop in advertising spends. However, with the festive season coming, we expect e-commerce firms to spend on advertising and marketing,” said CVL Srinivas, GroupM’s South Asia CEO.

While Paytm Mall, owned by Paytm E-commerce, has already announced that will it be spending close to Rs 1,000 crore in marketing, cashbacks and promotion, others such as Flipkart and Amazon, too, have released their marketing campaigns. However, both Flipkart and Amazon have refrained from revealing their advertising budgets. “Our campaign ‘Ab mehengaai giregi’ puts out the biggest offers that are not just worth the claim, but also address the daily life woes of every Indian,” said Flipkart CMO Shoumyan Biswas. Meanwhile, industry watchers point out that even as television is expected to walk away with a majority of the advertising spend, followed by print — within these media outlets, advertisers are expected to invest in lesser expensive channels.

“Within these media, e-commerce companies will rely on more cost-effective channels. For example, only a few companies with big budgets will spend on Hindi general entertainment channels (GECs), as it’s the most expensive medium to advertise on television, with the rest advertising on regional GECs, besides Hindi news channels, Hindi movie channels, etc. Even in the case of print, rather than investing more in English national dailies, e-commerce firms will advertise more in regional newspapers,” a senior media analyst said. Between January and June, about Rs 3 crore was spent on TV advertising by e-tailers followed by Rs 2.1 crore on print and a miniscule Rs 21.1 lakh on radio, while over the same period in 2016, e-commerce firms spent Rs 1,609 crore on TV ads, Rs 1,331 crore on print and Rs 97.8 crore on radio.

A 10-second ad spot during prime time on a Hindi GEC such as Star Plus or Zee TV ranges between Rs 80,000 and Rs 1,20,000. In comparison, in Hindi movie channels the cost of a 10-second ad spot varies between Rs 20,000 and Rs 30,000. On the other hand, a jacket advertisement across 24-edition of the Times of India costs anywhere between Rs 4.5 crore and Rs 5 crore. Meanwhile, a full-page ad on the front page of a Hindi daily such as Navbharat Times ranges between Rs 2 crore and Rs 3 crore.

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