E-commerce firms like Flipkart, Amazon and others spend mega on advertisement – By Shambhavi Anand & Pritha Mitra Dasgupta

E-commerce, probably the most happening sector in India, has turned into one of the hottest for the advertisement industry , too.

Spending on advertisements by e commerce companies surpassed that of consumer durables, banking and financial sectors in 2014. They are spending as much as the traditional table-toppers -telecom and auto companies.

TAM Adex data show that the big four e-commerce companies – Amazon, Flipkart, Snapdeal and OLX – alone spent a staggering Rs 600 crore on ads in 2014. Overall, the sector spent Rs 750-800 crore in 2014 and the budget would cross Rs 1,000 crore in 2015, say media planners.

The big spending has come despite the fact that Amazon started advertising in India as late as in May 2014. But that forced rivals, local leader Flipkart and Snapdeal, to beef up their efforts. In 2014, the sector spent Rs 60-70 crore on print ads, as they vied for premium positions, such as front page, jacket and double jacket ads in newspapers.

The sector spent Rs 32-35 crore only on jacket ads – four full pages of advertisement that cover the rest of the newspaper as a jacket.

But, more money has gone to television ads: as much as 50-60% of the total ad spend. While 15-20% of the total was spent on digital, 10-15% went to print media and the rest to radio and out-of-home media. “We expect the spend to go up by 20% in 2015,” said Anand Chakravarty , head of western India operations at media agency Maxus.

E-commerce firms like Flipkart, Amazon and others spend mega on advertisement

 

The media mix of the sector will continue to be driven by television, followed by digital in 2015, he said, as the primary objective of the players is to build reach and ensure high visibility to garner more investment interest.”Digital drives business performance,” he said.

Foreign investors who saw e-commerce as an opportunity to play in the nation’s mammoth $500 billion retail market have bank-rolled top online retailers’ efforts to scale up quickly over the past few years.

This has also increased competition in the online market, where the players are waging a war to win over the consumer. While the companies have of late cut down on discounts to consumers, they are focusing more on brand building, signing up Bollywood celebrities as brand ambassadors and stepping advertisement activities around sporting events.

The e-commerce sector is expected to spend heavily on the Indian Premier League.

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