Walmart-owned Flipkart India's marketplace arm Flipkart Internet reported a 50.35% growth in advertising revenue at Rs 2083.5 crore in FY22 compared to Rs 1385.7 crore in FY21. Sankalp Mehrotra, Vice President of Monetization, Flipkart, believes that e-commerce platforms have just scratched the surface when it comes to ad monetisation.
In an interaction with e4m, Mehrotra spoke about the factors that are driving AdEx growth on e-commerce platforms in India.
The overall e-commerce market is set to grow to $150-170 billion as per our latest Flipkart-Bain whitepaper. The last two years have also seen 75-85 million customers come into the online shopping fold. More and more sellers now keep their stores running 24x7 online. Another key trend shaping the ecosystem is search verticalisation. A significant number of users now begin their product search journeys on Flipkart. The third is multiple ad experiences in search, display, video, targeted sampling, off-platform ads and live commerce – all with full-funnel measurement. Add to that the empowerment we’ve created by building self-serve interfaces that provide complete control to our advertising sellers and brands. Last but not the least, is our ability to provide deep insights that create a virtuous growth loop. The efficacy of advertising on our platform surpasses traditional digital media opportunities. All of the above combine to create a very ripe ecosystem for brands to thrive and grow their business, and that reflects in our growth.
What kind of progress has Flipkart Ads made since its launch?
We started our business in 2015-2016. There is tremendous progress on multiple fronts. We have relevant solutions to fulfil multiple marketing objectives – be it new customer recruitment, cross-selling, upselling, retargeting, and more. We surface the right communication to the right user on all parts of their browsing/purchase journey. Tens of thousands of sellers and brands actively advertise with us every month. We are just getting started - there is a lot of disruptive work underway that will unlock exponential growth for all our partners.
Can you talk about the volume of ads being served by Flipkart Ads?
To give you an idea, we serve billions of relevant ad impressions on a monthly basis. We can sufficiently cover all active e-commerce shoppers multiple times over for each of our advertisers every month. Not just on Flipkart, but off Flipkart too.
Being an online marketplace, is boosting sales the key reason why brands advertise on Flipkart Ads, or is it also about driving awareness and brand building?
Flipkart is the go-to destination for launches across categories. From building awareness to managing journeys deeper in the funnel, we are able to do it all. Let me talk about this further – media can be looked at rather simplistically. On one axis is the reach you provide, and on the second axis is the engagement you can create. On Axis one – we have 400MN+ registered customers – making us one of the largest digital media platforms out there. On Axis two - we create superior engagement through our ability to understand user intent. Given the above, we have seen more and more brands/sellers use us for building awareness, driving consideration, inducing trials, and not just sales.
Which are the key categories that are advertising on the platform and what's the split between corporate and SMB advertisers for Flipkart Ads?
CPG, Electronics, Handsets, Fashion, Durables, and any other category listed on our platform is an advertiser. With the recently launched PPA (Product Performance Ads) offering, we are observing increased adoption from non-endemic categories like BFSI, Auto, Telco and OTT too. A lot of D2C brands have also amped up their marketing efforts with us.
What is your growth forecast for e-commerce advertising in India in the next two to three years?
Digital AdEx will breach 50 per cent of the total AdEx in the coming year or so. Within digital, commerce ads are the fastest-growing segment. This opportunity could be anywhere between 25-30 per cent digital; which is in line with what we observe globally too. E-commerce advertising in India could be 25-30 per cent of the digital AdEx by 2025. For smaller sellers, investments on a platform like ours could be north of 40-50 per cent too.
How are you helping smaller enterprises to advertise on Flipkart Ads since they don't have the resources to work with creative and media buying agencies?
I’ll carry on further from the last point I made about the disproportionate investments from sellers. They are a critical segment and creating growth for them is imperative for the success of a marketplace. To that end, we have launched easy-to-use self-serve interfaces that allow our seller partners to set up their own campaigns without needing any third-party assistance. There are a bunch of programs that we run to make the advertising journey a seamless one.
We have run awareness programs like 'Sahi Shuruat' for first-time advertisers besides offering detailed learning via Flipkart Ads Academy for seller certifications. We provide direct support through chat for immediate query resolutions. We also organise seller-specific AMAs and on-ground events. In terms of ongoing product interventions, we offer auto creatives and automatic vernacular translations, intelligent bidding systems, and multiple upgrades to enhance performance.
Measurement has emerged as a big area of concern for brands when it comes to digital advertising. How does the Flipkart DSP allow brands to measure the success of their campaigns on the platform?
Learning from our on-platform capabilities, PPA (Product performance ads) architecture has been created to allow brands to get bottom-of-the-funnel metrics too; irrespective of the ad being run anywhere on the open internet, or on social media. Brands can see metrics, including page views, cart additions, conversions, revenue generated, etc. We are seeing great performance across verticals and all early partners have increased their investments significantly. In an inflationary market, PPA stands out as an opportunity that can drive better efficiency and higher growth.