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Digital Advertising In India & The Surge Of E-Commerce Advertising

25 October 2019

India Goes Digital

Today, one in three Indians is digitally connected, thanks to affordable smartphones that led to a dramatic rise in the adoption of digital media led by multiple platforms like social media, video streaming, e-commerce, news and many more. Advertisers are focusing on building impactful connections with their consumers by leveraging a key insight: how their consumers are spending their digital time. These efforts are being further channelized through the surge of technology, better user-insights and engaging means of communication with consumers across media and platforms. The amalgamation of strong user-intent with deep user-insights has helped build better experiences while delivering ever-growing advertising yields.

Growth of the Indian advertising market

The steady increase in demand for both traditional and digital media has led to the digitization and the evolution of media consumption in the Indian market. As shown below, the Indian advertising market is growing at a tremendous rate, making it one of the fastest-growing ad markets worldwide with high growth potential.

Data source: DAN e-4m-Digital report’19: Advertising growth vs digital advertising growth 2018 – 2021f

Rise of digital advertising in India

We have come a long way in advertising, an industry which started with traditional media like Print, TV, Radio and OOH delivering exciting and memorable content. Today, both traditional and digital media are seeing uptake owing to the diversification of services and the evolution of media platforms. The waterfall graph below showcases the growth of varied media formats that have led to the current beat of the Indian advertising market

KPMG in India Analysis’19

The laudable growth of digital advertising in recent years as the torchbearer has been a progression of increased incomes and affordability of services. Over time, digital media has earned consumer trust by targeting the right audiences with relevant messaging at the right time.

Today, most of the digital adex comes from Social, Search, Display and Video (OTT). Google’s GDN, Facebook advertising (FB, Instagram, associated network), Flipkart, Times network,

YouTube, Hotstar, Amazon are critical players in these domains. The info graphic below exhibits the split of ad expenditure across digital media.

DAN e-4m-Digital report’19

By media budget proportions, adex on eCommerce platforms is as large as display advertising and is also witnessing almost ~100% growth Y-O-Y. Following section details out the factors leading to this tremendous growth.

Rise of E-commerce advertising in India

E-commerce industry outlook – e-commerce market is booming, and this growth will be sustained for the foreseeable future. Today, Flipkart has 20 mn BAU DAU (Business as usual daily active users) With millions of customers coming online every day, e-commerce platforms have the power to build brands, both through awareness and performance constructs. The graph below showcases how growth in internet users and the e-commerce market has been going hand in hand.

IBEF Ecommerce growth report’19

Brand media plans now include an increasing share of e-commerce spends indicating a huge uptake of advertising on e-commerce platforms led by three key pillars:  

Power of ‘Consumer insights’ – The real power of e-commerce platforms comes from the deterministic consumer insights they provide.  

  • Consumer insights help understand the multi-faceted consumer shopping behaviour. These insights help brands device relevant advertising strategies as they now know how customers are interacting across various touchpoints through their journey on the e-commerce platform, what their objectives are, what appeals to them, and at what time. 
  • These touchpoints can generally be classified as browsing products, adding them to wishlist/cart, purchasing them, reconsidering for purchase, etc.  
  • With contextually relevant content, advertisers can nudge consumers towards culminating their shopping journey in a more natural & non-intrusive way: win-win for all!      

Performance measurement – Evolved e-commerce platforms provide performance measurement tools that help in-depth analysis of what worked and what didn’t.  

  • The reporting data gives a full-funnel metric view across the entire advertising hierarchy on the platform itself. Here, full-funnel means data ranging from top of the funnel metrics like served impressions, views and clicks to conversion funnel metrics like add to cart/wish list, product page views and purchase insights 
  • Not just this, as consumers can move across ad formats/widgets and pages while visiting the app/website within a session itself, the reporting considers this by attributing right actions (views or clicks) to only the right formats, thus weaving a thread across consumers entire journey.  
  • The advantages of this reportage are multifold:
    1. Advertisers get an elaborate understanding of how their media expenditures are channelized and what is their ROI
    2. in the past and what hasn’t by analyzing performing vs non-performing targeting cohorts, ad formats, creatives, callouts, products etc.
    3. With real-time recommendations on existing campaigns, advertisers get an opportunity to optimize and enhance performance on the go. 

Abundant Supply – There is abundant supply inventory on e-commerce platforms which gives ample opportunities for relevant advertisements.   

  • Advertisers can run ads on owned and operated (OnO) as well as 3rd party (3P) inventories through managed services, self-serve platforms or programmatic publishers 
  • These ads can be awareness or performance-oriented. Awareness oriented ad products are generally classified as banner ads, stories, user feeds etc. Performance products include product context ads including search-based ads, product listing ads etc. 
  • E-commerce platforms are supporting a plethora of prevalent and novel, native and non-native ad formats like fixed and dynamic banners, interstitials, gifs, podcasts, videos, stories, user feeds, logos, surveys and questionnaires and so on. Advertisers can plug and play with these formats based on their requirements e.g. new product launches, promotional events, pushing old inventory out, etc. 

All in all, e-commerce platforms are providing huge opportunities for advertising digitally. Technologies supporting vernaculars, voice and video on mobile are taking advertising to the next level, and the time for advertisers to join the wagon is now! 

The author is Bhoomika Kumawat, Product Manager at Flipkart

Citations: 

  1. India’s Digital Future | KPMG in India’s Media and Entertainment Report 2019 
  2. Verma, Jagruti, et al. “Report: Value of Digital Advertising Market Slated to Reach $3.52 Billion.” Social Samosa, 16 Jan. 2019 
  3. Chakraverty, Aishwarrya, et al. “37% Of Incremental Ad Spends in 2019 to Go towards Digital Advertising: GroupM TYNY.” Social Samosa, 12 Feb. 2019, 
  4. Enberg, Jasmine. “Global Digital Ad Spending 2019.”  EMarketer, 28 Mar. 2019,