Flipkart has announced the launch of third party ad services on its shopping portal, making it the first ecommerce portal in India to extend the service. Once live, online sellers will be able to display their products through ads on the flipkart portal.
How does Third Party Ad service work?
Third Party Ad service pushes an advertiser’s ads on websites based on target audience and allows the advertiser to keep track of the performance of the ad in terms of clicks generated, number of times the ad has been published, conversion rates etc. Almost all banner ads, paid search listings etc. are delivered by third party service providers.
Advertisers rely on these service providers due to the main convenience of accountability. The service providers ensure that ads are pushed and tracked according to website traffic and customer profiles, which helps to reach target audience more efficiently.
How will Flipkart operate the ad service?
Ad services are based on customer profiles and browsing history. Flipkart has the customers’ purchase history and customers’ search information. Based on this, it is a convenient and efficient service that Flipkart can provide to retailers. This is a move mainly to increase profit margins of Flipkart.
Success in the West with Amazon
Amazon launched its ‘Product Ads’ service in 2008 in the US and has since allowed third party retailers to advertise their products on Amazon. Once a customer clicks on the ad, he/she is redirected to the retailer’s website. Though not yet launched in India, Amazon US offers sponsored links, display ads and product ads option to third party retailers.
How can online retailers benefit from Flipkart’s Third Party Ad service
Third party ad services work on information like customer profiles and browsing history to publish the right ads in the right order. Flipkart has the browsing history as well as purchase history of customers which can be leveraged on to advertise ads to target audience.
Also, online retailers can leverage on Flipkart’s popularity and credibility to gain the trust of customers. A frequent buyer from Flipkart will especially value Flipkart’s endorsement and probably not think twice about buying from someone whose ad appears on Flipkart.