Sellers would agree that an online marketplace is a crowded space. To stand out, one can’t afford to stay dormant. A few years ago, just listing yourself on a popular site like Flipkart, Amazon, Snapdeal was enough. But as ecommerce grows exponentially and sellers of all sizes from across the world join the platform, basking in the popularity of ecommerce sites is not an option anymore.
Wondering how to standout then? Well, sponsored ads are one of the best ways to advertise your product and get noticed in the crowd.
As of now two ecommerce leaders, Flipkart and Amazon offer this service. Snapdeal has just entered the advertising platform, so it will take a while to match the other two’s popularity.
Flipkart introduced this service in August, roughly 5 months after they acquired Adiquity. Under Flipkart’s PLA, a seller can create ad campaigns for their products, get them listed as ‘featured products’, which hikes up the chances of sale conversion. It aims at increasing visibility and offer more opportunities to close sales.
Rohit Kulkarni, Senior Manager – New Initiatives, Amazon India shared various sponsored ads services with Indian Online Seller. They launched a few ad products on its online marketplace over the past 5-6 months. The aim was to help sellers and brands improve their visibility and let them take greater control of their online business. These include:
Fresh on the turf, Snapdeal too is looking to introduce ad products for its sellers. As it is newly launched, details are not yet out. But for now, sellers can invest in native ads to increase visibility and sales on the platform.
Marketplaces are tightlipped about the ad rates. Amazon refused to divulge any details beyond their various ad products. And Flipkart chose to remain silent.
Therefore, we needed an expert’s help, who has practical knowledge about the effectiveness of marketplace ads. So we headed straight to Vijin Nair, Category Manager at Browntape Technologies to get some answers.
As expected, Nair gave us very useful information,
“Flipkart allows us to use existing COD balance in the seller’s account for ads. Minimum investment for the first campaign at Flipkart is Rs. 500. While Amazon requests us to make a prepaid payment of Rs. 5000 to initiate the first campaign, which can be used over a period of months to activate campaigns.”
He shared Flipkart has fixed CPX (cost per action) at Rs. 50-75 PC per impression while Amazon has a bidding option so each click will cost as per the bid amount for that particular keyword. According to him, investment on sale is 5-7% for both these campaigns, if effectively executed.
“In Amazon, we paid around Rs. 50,000 CPC (cost per click campaign) and have gained around Rs. 9 lac sales” says Nair.
He also shared some interesting titbit about Amazon and Flipkart’s rivalry.
“Amazon’s product ad campaign aka CPC did get a head start on Flipkarts PLA, but Flipkart learned from their mistake and brought down their pricing to 50pc. Due to this Amazon had no option but force their campaigners to bid the major league keywords at Rs. 50 or more. This gave Flipkart’s PLA a huge lead and sellers’ sales increased too.”
We asked Nair, do these sponsored ads actually work for sellers?
He answered, “Sponsored ads are a great way to improve visibility and sales, if strategically executed. The initial investment in products ads is economical as compared to other sponsored promotions. Therefore, every seller has an equal opportunity. Additionally, the results are very transparent which enables sellers to weigh their next investment.”
Next we asked, are marketplace sponsored ads a better option than Facebook ads? If yes, then how?
“Yes, of course! Agreed, Facebook ads get more visibility but the results are ambiguous. On the other hand, sales per campaign helps us understand the ROI of marketplace ads. In addition, the ability to tailor marketplace ads as per customers’ demand makes it significant than other ads”, Nair affirmed.
What should be the deciding factor for a seller before opting for this service was our next query.
According to Nair, sponsored product ads are the cheapest promotion mode available online, so budget shouldn’t be a hindrance or the biggest deciding factor. What sellers need to focus on is strategizing a successful campaign by understanding their product assortment, fulfillment surety, inventory capacity and other operational factors. “A well strategized campaign with ample stock can never lose”, said Nair confidently.
Is there any harm in making your product service visible to buyers by investing a little money? No, right? For categories such as fashion & accessories, Facebook and other social media platforms might act as a great platform to reach target consumers. But, there are many categories, where the best way to reach target market is directly through marketplaces.
Various figures and research findings leave no doubt that people spend hours browsing ecommerce apps and sites these days. So what can be better than grabbing their attention by popping right on the screen in the middle of a window-shopping or need-based buying session and urge them to buy?
Sellers what do you think? Are marketplace ads a great promotional tool or just non-productive additional expense? Please let us know your views.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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