Abhinav Mohapatra, New Delhi
With 300 million internet users in 2014 and an estimated 3 billion dollar ecommerce space in 2013, India is set to become the fastest growing ecommerce market in the world. Industry reports claim that by next year, with the rise of mobile and internet users, this market will see a 37 per cent rise to become a 20
billion dollar category. Putting the technical aspects aside, the category is also heavily investing in advertising to maintain a top of mind recall amongst its users. Paradoxical to the belief that ecommerce being digital in nature would only advertise on digital and traditional advertising media would fade, OOH media has seen significant expenditure from this category with several players spending scores of crores on outdoor media activations.
Talking about the rationale behind ecommerce spends on outdoor media advertising, Pramod Bhandula, Executive Chairman, JCDecaux India, says that there are 2 main factors responsible, one being the kind of budgets that the players in the category has and the amount of traction that they get from cities like Delhi, Mumbai or Bangalore. “They want to be present in these markets because they realise that 70 per cent of their buys come from these markets. To put continuity with their presence they have to use outdoor which allows them to talk one to one with their consumers. I am pretty sure that they have already accepted this medium and got encouraging results so they are going to continue with this medium,” he adds.
Unlike telecom which is regulated, there are hundreds of ecommerce players constantly trying to prove their uniqueness and thousands of players locally who want to grow to multiple regions and attain customer loyalty. Even though ecommerce portals have different offerings, most have the same target audience.
Ankur Rastogi, Founder and Chief Strategist, Group AAO, explains that an ecommerce business having a global reach through the internet gets launched in particular markets by promoters and since it is launched in a particular market, the promoters have to make use of the local media, hence, outdoor.
“I think, each and every ecommerce site has a base-station and they only test-market their services from there. It is seen that in the beginning they don’t have a heavy media budget, they look at guerrilla marketing ideas and cheaper alternatives to spread awareness, hence, they go for outdoor advertising,” he adds.
Rastogi further opines that when ecommerce brands grow, they grow to other markets and don’t advertise on TV or print till they have not established a footprint in 5-6 markets. “Till 2 years I think their requirement is only local media, secondly ecommerce ventures unlike many, are very specific. For example there are niche portals that are only delivering food or furniture or luxury products. To name a few, Zomato will only launch if they have a tie-ups with restaurants, they need that time to scale up for ads on television or print. Hence, it is a local market driven phenomenon, once they become large, everyone will visit Zomato. Since it is a very niche area, they have to find eco-system based media. If I am selling office shirts like Zovi I will like to be present in office areas. If I am a dating site I will be near colleges, hence, this is how they use local media,” he appends.
Talking further on the trend of advertising, ecommerce companies used to have brand based campaigns, now they are product based; since, initially they needed to bring traffic to their brand and now since everyone has apps on their mobiles the offering has shifted from brand awareness to categorising the differentiating factor. People now want to look for opportunities in terms of value.
“The real benefit of OOH is that it builds quick awareness, if one wants to show Flipkart, OLX, Quikr, Snapdeal, Amazon etc on a 20 foot billboard or if one wants to focus on any kind of offer, one can put the creative on OOH which is a 24 hour media. It is not a one-time thing, there is a chance that people will keep seeing it and will gain awareness. The nature of ecommerce is that they build it for a particular game and then they move out. Therefore, ‘offer of the day’ or ‘sale of the week’ needs to be tactical, needs to build awareness and bring people to their site. Hence, larger than life communication will generate a lot of traction. People spend less time at home, grab a quick bite and are on the move, which gives a limited timespan for other mediums like Print or Television,” says Nabendu Bhattacharyya, CEO and MD, Milestone Brandcom.
He further comments that in a large city, 70 per cent of the time that people are awake is spent out of home; people do not get time to go to retail outlets but shop from ecommerce websites based on their convenience. “Since they are always on the move, outdoor is the best platform to catch hold of them in a brand friendly mode,” he adds. Talking about spends Bhattacharyya cites that brands like Flipkart or Amazon would spend around Rs 25-30 crore, cumulating other players who advertise on OOH, the total spends on the OOH platform by the category will be somewhere around Rs 200 crore.
An industry post released earlier this year stated that ecommerce and other digital companies are advertising on outdoor to acquire customers and in turn create the brand recall as well as loyalty. Since the companies are repeatedly spending heavily on OOH it means that the medium is helping them in creating the clout that they are expecting and if this trend continues, the outdoor industry in 2015 will see a definite spike in market share.
Kaushik Chakravorty, Co-Founder and Director, Street Talk India, illustrates that all the ecommerce sites are customer centric solutions which have a one-to-one interaction with the consumer digitally. “To be on the top of mind is very important for these brands because it is not only a fight with the retail stores but also a fight with other peers in the category. Essentially the share of voice needs to be very high for these brands. The category itself does not get the loyalty from the customer, wherever the users get a better transaction they move there. The brand obviously wants traction and the only way to connect with the customer is to create as much visibility as possible in every touch point as possible. Hence, outdoor media establishes a high recall and helps counter offline retail; in turn the engagement becomes high,” he adds.
Giving the topic a different perspective, Arghya Chakravarty, CEO, Times OOH says that ecommerce is spending heavily, across all platforms and not only on OOH. “If you look at the category today from an absolute number and marketing spends in terms of growth, they are the largest and fastest, after FMCG brands. We have been able to cash-in well especially in the Airports where they have taken up various formats. They will continue spending since half their investment dollars or a large part of it is, for advertising. We need to cash-in on this boom and provide solutions for them and experiment with them on OOH as we go along,” he appends. Chakravarty further explains that it is difficult to give overall spends of this category on outdoor media but Times group is expecting a share of 10-15 per cent revenue, just from the ecommerce industry advertising on outdoor.
Whether be offers, weekend sales, online shopping festivals, the last 12-14 months have seen a slew of outdoor campaigns by ecommerce brands such as Flipkart, Jabong, Snapdeal, OLX, Quikr, Pepperfry, Urban Ladder, FoodPanda, Amazon, Dineout, Yatra, GOSF, Askme, Commonfloor among many others. It seems that with the entry of new players and ecommerce start-ups popping up all over the country, the use of local media as well as multi-city campaigns will see a definite rise. Through on a constant upturn, how much will the ecommerce category occupy OOH media advertising pie, is yet to be seen. As per the observation of industry veterans, the category will keep spending on OOH as it grows and in the coming 5-6 years consolidate.
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