In an effort to increase its revenue generation, Snapdeal has unveiled new version of its advertising platform ‘Snapdeal Ads’. The company claims that it will assist sellers on their platform to target customers based on browsing history and purchases. Geographical location (of the customer)can also be identified in this feature, which will be available on mobile app, mobile website, and desktop website.
Entirely developed in-house, the ads platform is expected to help sellers improve their brand visibility and drive online business. According to a statement issued by Snapdeal, sellers can even participate in auction-based buying of ads inventory, view detailed reports, and simultaneously promote products through a range of different ad campaigns.
Tony Navin, Senior Vice President, Partnerships and Strategic Initiatives, said that the new platform will enable the following:
- Allow sellers to reach their customers in a more precise manner
- Help build targeted campaigns
- Measure impact and return on investment on a real-time basis.
Snapdeal launched the first version of their ad platform in November 2015 to provide native advertisements, following the acquisition of programmatic advertising platform ReduceData in September. The platform was based on pay-per-click advertising technology, and enabled Snapdeal reach over 90 million customers. Globally, Amazon and Alibaba had crossed over $1 billion in revenue from native advertising.
Snapdeal says that the 30,000 plus sellers, who used this platform, have witnessed an average 2X increase in business compared to others. At the launch of the first version, they said that sellers and brands who wish to develop more elaborate campaigns can further customise their advertising plans.
Race for revenue
Like their arch rival Flipkart, Snapdeal also provides product listing ads (PLA). Snapdeal also provides an ad platform exclusively for brands – called ‘Brand Store’. Not to lag behind, Flipkart launched ‘Brand Story Ads’ in March 2016 catering to about 50 brands, including L’Oreal, Micromax, and Intel. Flipkart had then claimed that their monthly revenue from ads is $1 million.
Digital ad spending in India is expected to be worth Rs.6,525 crore in 2016, as per a report by US-based advertising firm GroupM. The curated ad campaigns seem to be the natural course for revenue generation for e-commerce companies which often serve as product discovery platforms too. Chinese e-commerce giant Alibaba generates more than half its sales from ads, according to data by iResearch Consulting Group. Both Snapdeal and Flipkart are following the similar footsteps. From GMV to revenue from ads, the metrics to measure the success are broadening giving room to the profitability avenues. Flipkart is ahead in this race at the moment but the next 6-7 months will bring more clarity and we'll many more questions answered then, hopefully.