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From Paytm to Airtel – how companies are cashing in from ad revenue

It is no secret that big brands that pride themselves in having a huge customer base leave no stone unturned in making sure they fetch revenue from their large reach through any possible source. Well, it would be fair to say advertisement revenue is one such source, with prominent brands ranging from Amazon to Flipkart and Paytm to Airtel monetising it. Airtel was the newest consumer tech company to join the list of those monetising their extensive customer base to generate advertisement revenue. It is not that the idea is very unique in any sense, especially considering the recent event of technology-based companies like GoDaddy, Uber, Booking.com and Byju’s cashing in on sports sponsorship deals in an attempt to penetrate deeper into the country’s smaller towns and regions, but the fact that these consumer tech platforms are able to charge brands only in lieu of their extensive user base creates an incredible benefit to cost ratio. This ability of big brands and consumer tech companies to monetise advertising roots from the inability of affiliate marketing to ensure presence of the brand only on trusted content. What this basically means is that advertising through affiliate marketing at a time when people have gotten incredibly picky and concerned about what they see on the web can be really risky for a brand, keeping in view the fact that with an affiliate, brands don’t know where the ad would be placed. So, at a time when even a misworded tweet can cost you threats of boycott and millions of dollars, putting reputation at stake with the affiliate can be a little too much risk.
On similar lines, the Chief Product Officer of Airtel expressed, “With brand safety being a major issue, companies want platforms that can showcase their products in the right context. One of the big problems that brands face when they give their budgets to an affiliate network is that they don’t know where the ad will be placed, hence, our platform aims to address this issue”. Brand image is a crucial factor to consider these days and companies are growing increasingly careful with it. The main focus of affiliate marketing is to attract viewers to the website and showcase ads, however, being aware of how things go down these days, we know that fake content and those promoting hate get more views than truth and facts, and thus placing budget on affiliate as a source of advertisement can be a threat to brand image. As a result, companies are increasingly choosing retail websites and apps in the coming period in an attempt to stay relevant and safeguard their brand image. In a report released by Criteo, it is suggested that 55 per cent of marketers are likely to increase their advertising budgets on retail websites and apps in 2021.
If the report of GroupM’s This Year Next Year (TYNY) is to be sought credible, spends on digital marketing for 2021 are expected to register a 28 per cent growth, taking the total to as high as Rs 27,000 crore. To showcase some statistics in an attempt to provide quantitative meaning to this increase, consider the fact that Industry estimates suggest that companies typically spend 30-40% of their marketing dollars on digital advertising depending upon the category– of this 10-12% is spent on e-commerce marketplaces. According to sources, some of these platforms are believed to be charging a cost per thousand impressions (CPM) of Rs 80-90 for ad slot. It would be interesting to note that the immense boom that the COVID-19 pandemic brought for the e-commerce industry has also resulted in brands increasing their share of spending on the e-commerce marketplace. “Today, it is not just about the product, it’s about an end-to-end solution for a marketer. Therefore, if a technology partner can help drive all aspects of a marketing funnel from awareness down to conversion — that is where the real opportunity lies. The big advantage with digital, especially larger ad tech players, is the full-funnel solution that they provide,” Taranjeet Singh, managing director, South East Asia and India, Criteo, stated.
Well, don’t think all of this is only for the brand image because the return of investment on these platforms is equally impressive when compared to other traditional methods, or in fact better in some categories like that of apparels and electronics where the return on investment is twice as good as that of other platforms. It is considered substantial because of the extensively large variety that these e-commerce marketplaces and websites offer that the consumer ends up buying stuff that wasn’t even on their list to begin with, a phenomenon that all of us are very aware of. Vishal Jacob, Chief digital officer of Wavemaker India noted that, “Today, advertising on e-commerce platforms gives smaller brands the ability to hijack the consumer on their journey, and take on a larger brand, by investing their marketing dollars on these platforms.” However, it just feels like we are talking way too much about the seller and not about the customer, especially when the market orientation has changed in a way that customers have the power to choose brands and prioritise their needs. Therefore, while the ad tech space has gained momentum in the customer tech companies, the key would be to ensure quality customer experience and making sure that they don’t feel too inundated with the advertisements. It can be achieved by placing a capping limit on the advertisements which would basically ensure that the consumer doesn’t feel too overwhelmed with their presence. Further, it can be made sure that the advertisements are kept native such that it matches the form, function and content of the platform so that the advertisements don’t seem too intrusive. No matter what, we are all in for this new revolution in the industry, sooner or later.

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